Five-month downtrend deepens as Market ends February on a gloomy note
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Market Overview This Week
The Indian indices saw a significant downturn this week, with Nifty 50 closing at 22,124.7, down 2.94% from the previous week. Midcap and Smallcap indices also saw steep declines, with Nifty Midcap 150 down 4.98%, Nifty Smallcap 250 falling 5.71%, and Nifty Microcap 250 plunging 6.16%.
Globally, the Dow Jones showed resilience, closing up by 0.95% at 43,845.91, while the Nasdaq 100 faced a decline of 3.47%, closing at 20,909. The broader global sentiment remained mixed, with European indices like the FTSE 100 rising 1.74%, while Asian markets like the Nikkei 225 and Hang Seng experienced losses of 4.18% and 2.29%, respectively.
With India's GDP growth coming in at 6.2%, it remains to be seen whether the weak sentiment stabilizes at these lower levels or continues the downtrend seen over the past five months. Market sentiment remains cautious due to FII outflows and tariff concerns, compounded by global economic uncertainties.
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What happened in India?
India’s GDP is expected to grow by 6.5% in FY25, slightly above the estimated 6.4%. Growth is slowing due to high energy prices and RBI’s tight monetary policy. Dive deeper
India’s fiscal deficit widened to ₹11.7 trillion (74.5% of FY target) in April-Jan. Expenditure grew 6.4%, while receipts rose 6.6%. Dive deeper
RBI injected $10 billion via a forex swap on Feb. 28 to ease liquidity pressure. The three-year swap follows a $5 billion infusion last month amid tightening banking liquidity. Dive deeper
SEBI plans to expand QIB definitions and remove the 200-investor cap for angel funds. The move aims to boost startup funding while ensuring only financially strong investors participate. Dive deeper
RBI’s curbs slowed personal loan growth to 13.7% in December from 15.2% in September. Overall bank credit grew 11.8%, while term deposits surged 14.3%, now 62.1% of total deposits. Dive deeper
India is finalizing a $1 billion solar subsidy plan to cut dependence on China. The policy focuses on wafer and ingot production, awaiting cabinet approval. Dive deeper
The World Bank urged India to accelerate reforms for high-income status by 2047. It called for investment, labour force expansion, and productivity gains. Dive deeper
India’s IT sector is projected to grow 5.1% to $282.6 billion in FY25. Employment rose by 1.26 lakh to 58 lakh, with ER&D firms growing the fastest. Dive deeper
SEBI launched Bond Central, a platform for corporate bonds. It offers risk assessments, bond documents, and comparisons with G-Secs. Dive deeper
Tuhin Kanta Pandey was appointed SEBI chairman, replacing Madhabi Puri Buch. An ex-Finance Secretary, he played a key role in Air India’s privatisation. Dive deeper
Axis Bank may sell a majority stake in Axis Finance for $900M-$1B. The bank is reviewing options but may choose not to proceed with the sale. Dive deeper
Vedanta will invest ₹50,000 crore in Assam and Tripura’s oil and gas sector. The goal is to produce 1 lakh barrels/day and create 1 lakh jobs. Dive deeper
HSBC raised $1 billion via an AT1 dollar bond at 7.5% initial guidance. The proceeds will strengthen its capital base and fund corporate operations. Dive deeper
India imported €49B worth of Russian oil in the third year of the Ukraine war. Russian crude now accounts for 40% of India's imports, with some refined oil exported to Europe. Dive deeper
Delhi Airport’s proposed tariff hike will raise domestic airfares by 1.5-2%. The Yield Per Passenger will increase from ₹145 to ₹370. Dive deeper
Passenger vehicle sales may grow 4-7% in FY26, while two-wheeler sales may rise 6-9%. CV growth will be marginal, with M&HCVs and LCVs growing 0-3% and 3-5%, respectively. Dive deeper
Retail inflation for farm workers and rural labourers eased to 4.61% and 4.73% in January. CPI-AL and CPI-RL fell due to a decline in food prices. Dive deeper
India’s air passenger traffic rose 11% in January, reaching 1.46 crore. IndiGo led with a 65.2% market share, while Air India’s rose to 25.7%. Dive deeper
RBI announced the premature redemption schedule for Sovereign Gold Bonds (April–Sept 2025). Investors can redeem at IBJA’s average gold price. Dive deeper
Bharti Airtel is in talks with Tata Group for a potential merger of Tata Play with Bharti Telemedia. Discussions are ongoing. Dive deeper
Swiggy plans to invest ₹1,000 crore in Scootsy Logistics via a rights issue. The investment will expand its supply chain and distribution network. Dive deeper
Havells India will enter the EV charging market within six months. It aims to serve automakers, charging infra firms, and real estate developers. Dive deeper
Assam secured ₹4.78 lakh crore in investment commitments at its business summit. ₹2.75 lakh crore came from 270 agreements, with ₹78,000 crore for infrastructure. Dive deeper
Paytm partnered with Perplexity to integrate AI-powered search into its app. Users can explore topics in local languages to make informed financial decisions. Dive deeper
UltraTech Cement’s ₹1,800 crore entry into the cables & wires sector triggered a sharp sell-off. Stocks like KEI Industries, Polycab, and Havells fell up to 17%, with analysts citing cost advantages but concerns over distribution challenges. Dive deeper
RVNL won a ₹136-crore contract for Bhusaval-Khandwa’s railway section. The project, aimed at boosting freight capacity, will take 24 months. Dive deeper
India’s gold jewellery exports to the U.S. may drop 50% due to tariff hikes. Manufacturers may shift production to Oman and UAE. Dive deeper
EPFO retained the 8.25% interest rate on EPF deposits for 2024-25. Ministry of Finance approval is pending. Dive deeper
Ola Electric sold 25,000 scooters in February, but only 8,390 were registered. The gap arose due to vendor contract renegotiations, with no change in actual sales. Dive deeper
What happened across the globe?
Brent crude fell to $73 per barrel, marking its biggest monthly drop since September. US economic concerns and a potential Ukraine peace deal weighed on prices, but sanctions on Venezuela and Iran limited losses. Dive deeper
Nvidia’s Q4 profit surged 80% to $22.09 billion, with revenue up 78% to $39.33 billion. Strong AI chip demand and new Blackwell chips drove sales despite data center and geopolitical risks. Dive deeper
US new home sales fell 10.5% in January to 657,000, missing estimates. High mortgage rates and severe weather hurt demand, with sales plunging across most regions except the West. Dive deeper
UK car production fell 17.7% in January to 78,012 units, marking 11 straight months of decline. Plant restructuring and weak demand persist, with industry leaders calling for government support. Dive deeper
The dollar index stayed around 107.3, supported by Trump’s tariffs on Mexico, Canada, and China. Markets priced in potential Fed rate cuts amid economic slowdown fears and rising jobless claims. Dive deeper
Gold fell to $2,850 per ounce, posting its biggest weekly drop since November. A stronger dollar and inflation concerns limited Fed rate cut expectations, while consumer spending unexpectedly declined. Dive deeper
European natural gas futures fell 1.2% to below €45/MWh, after a 9% surge. Gas prices remain 20% below February’s peak, with EU nations considering easing storage mandates ahead of winter. Dive deeper
UK house prices rose 3.9% YoY in February, slightly below January’s 4.1% but above forecasts. Monthly growth hit 0.4%, as housing transactions surged 14% in H2 2024 despite affordability concerns. Dive deeper
Microsoft’s Brad Smith urged the US to ease AI chip export curbs, warning of China’s advantage. The Biden-era rule restricts AI model training exports, raising concerns over global competition. Dive deeper
Calendars
In the coming week, we have the following economic events and corporate actions:
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