Indices trade with steep losses; metal shares lose sheen

The key equity benchmarks continued to trade with significant losses in the afternoon trade. The Nifty tumbled below the 23,650 level. Metal shares declined after advancing for the past two consecutive trading sessions.

Investors turned cautious after the first human metapneumovirus (HMPV) case being detected in Bengaluru amid reports of a virus outbreak in China.

At 13:25 IST, the barometer index, the S&P BSE Sensex, tumbled 1,232.61 points or 1.56% to 77,990.50. The Nifty 50 index declined 395.15 points or 1.65% to 23,609.60.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index dropped 2.40% and the S&P BSE Small-Cap index slipped 3.06%.

 

The market breadth was weak. On the BSE, 656 shares rose and 3,432 shares fell. A total of 117 shares were unchanged.

Economy:

The seasonally adjusted HSBC India Services Business Activity Index rose from 58.4 in November to 59.3 in December, highlighting the strongest rate of expansion in four months.

At 59.2 in December, up from 58.6 in November, the HSBC India Composite Output Index signaled the strongest rise for four months. Private sector companies in India posted a faster increase in output at the end of the calendar year. The acceleration was driven by service providers, who recorded a quicker increase in business activity when factory production growth softened.

Ines Lam, economist at HSBC, said: Indias service companies expressed strong optimism in December as business activity growth surged to a four-month high. Forward-looking indicators such as new business and future activity suggested that the strong performance will likely continue in the near future. The easing of input price inflation in the month also supported business sentiment. Strength in the services PMI stands in contrast with the growing signs of a slowdown in the manufacturing industry.

Indias foreign exchange (forex) reserves declined by $4.112 billion to an eight-month low of $640.279 billion during the week ended December 27, according to the latest RBI data.

For the week ending December 27, foreign currency assets, a major component of the reserves, decreased by $4.641 billion to $551.921 billion.

Gold reserves increased by $541 million to $66.268 billion during the week. The special drawing rights (SDRs) were down by $12 million to $17.873 billion, according to the RBI.

Indias reserve position with the IMF was unchanged at $4.217 billion in the reporting week, the apex bank data showed.

Buzzing Index:

The Nifty Metal index slipped 2.84% to 8,482.45. The index added 1.04% in two consecutive trading sessions.

Hindustan Copper (down 5.33%), Welspun Corp (down 5.02%), Tata Steel (down 4.51%), Hindustan Zinc (down 4.31%), National Aluminium Company (down 3.85%), NMDC (down 3.49%), Vedanta (down 3.44%), Adani Enterprises (down 3.42%), Steel Authority of India (down 3.3%) and Hindalco Industries (down 3.03%) declined.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 1.74% to 6.897 as compared with the previous close of 6.779.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.8325, compared with its close of 85.7950 during the previous trading session.

MCX Gold futures for the 5 February 2024 settlement fell 0.37% to Rs 77,033.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.26% to 108.67.

The United States 10-year bond yield added 0.72% to 4.628.

In the commodities market, Brent crude for the November 2024 settlement declined 39 cents or 0.51% to $76.12 a barrel.

Stocks in Spotlight:

Union Bank of India slipped 7.21% after the public lender reported a 2.36% decline in domestic deposits to Rs 11,82,623 crore as of 31 December 2024 as against Rs 12,11,178 crore posted as of 30 September 2024.

Marico declined 2.13% after the company said that the rising trend in input costs is expected to result in a higher-than-anticipated gross margin contraction on a year-on-year basis.

Metropolis Healthcare shares climbed 1.97% after the company announced double-digit revenue growth for Q3FY25, despite it being a seasonally slow period for diagnostics.

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