Market sell-off deepens as Nifty closes below 23,450

Jan 10, 2025

Welcome to Aftermarket Report, a newsletter where we do a quick daily wrap-up of what happened in the markets—both in India and globally.

Follow Market Alerts by Zerodha on X (Twitter) to get instant summaries of key exchange filings as soon as they happen. These alerts are delivered in real-time by Tijori.

Market Overview

The Nifty opened flat at 23,551.90 and, after remaining steady for a brief period, began to decline. It fell over 200 points from the opening level, hitting the day’s low of 23,344.35 within the first hour, weighed down by broad-based weakness across sectors, including Financials, Autos, Energy, Pharma, and Metals.

From these lows, the market staged a strong intraday recovery of nearly 250 points, driven by gains in TCS and the IT sector, with other sectors also trimming some losses. This recovery pushed the Nifty to the day’s high of 23,596.60 around 11:30 AM. However, a second round of selling resumed later, led by broader market weakness, dragging the Nifty down in line with the overall negative sentiment. The index eventually closed at 23,431.50, down 0.4% for the day.

While TCS emerged as the top gainer, providing crucial support to the Nifty, the overall market sentiment remains fragile. Looking ahead, markets will closely monitor upcoming corporate results, management commentary, and any potential triggers that could help improve the weakening sentiment.

Broader Market Performance:

The broader markets faced an even tougher day compared to the headline indices. On the NSE, 552 stocks advanced, 2,287 declined, and 71 remained unchanged.

Sectoral Performance:

Sectoral performance reflected a negative trend, with all sectors closing in the red except for IT. Nifty IT emerged as the sole gainer, rising 2.01%, driven by an optimistic outlook for the year following positive commentary from TCS management. In contrast, Nifty Media and Nifty Realty were the hardest hit, declining by 3.64% and 3.03%, respectively.

Note: The above numbers for Commodity futures were taken around 4 pm.

Change in OI for the day

The following is the change in OI for Nifty contracts expiring on 16th January:

The maximum Call Open Interest (OI) is observed at 23,800, followed by 23,500. Meanwhile, the maximum Put Open Interest (OI) is at 23,000, followed by 23,500.
Immediate support is identified in the 23,300–23,250 range, while resistance is expected between 23,700 and 23,800.

Note: OI is subject to multiple interpretations but generally, in a falling market if there is an increase in the call OI, it indicates resistance, and in a rising market, if there is an increase in the put OI, it indicates support.

Source: Sensibull

Tijori is an investment research platform, and they have constructed niche indices for various themes and sub-sectors. They help you get a sense of the market performance of narrow slices of the market. You can also track the Promoter buying and other interesting stuff like Capex activity by the companies in the Tijori App’s idea dashboard.

What’s happening in India

India's forex reserves fell by $5.693 billion to $634.585 billion in the week ending January 3, following a $4.112 billion decline the previous week, according to the Reserve Bank of India. The reserves have been on a declining trend due to revaluation and RBI's forex market interventions to manage rupee volatility. This comes after the reserves had peaked at an all-time high of $704.885 billion in late September. Dive deeper

The Centre on Friday released ₹1.73 lakh crore as tax devolution to state governments, significantly higher than the ₹89,086 crore released in December 2024. The finance ministry stated that the increased devolution aims to support states in accelerating capital expenditure and financing development and welfare activities. Dive deeper

Tata Consultancy Services (TCS) reported Q3 FY25 revenue of ₹63,973 crore, a 5.6% YoY growth, with an operating margin of 24.5% and net income of ₹12,380 crore. A strong TCV of US$10.2 billion was achieved, with significant growth in India, and Middle East & Africa. A special dividend of ₹66 per share was also announced. Dive deeper

ONGC has appointed BP Exploration (Alpha) Ltd. as the Technical Services Provider for the Mumbai High field to improve production. The collaboration aims to increase crude oil output by 44% and gas production by 89% over the next decade. This initiative is expected to generate up to USD 10.30 billion in additional revenue for the government. Dive deeper

SpiceJet will unground 10 aircraft, including four Boeing 737 MAX planes, by mid-April 2025, increasing its fleet size to 28. This follows a network expansion with 60 new flights, supporting the airline's recovery and growth. Dive deeper

Mazagon Dock Shipbuilders Limited delivered the sixth Scorpene-class submarine, Vaghsheer, to the Indian Navy on January 9, 2025. The submarine, launched in April 2022, has undergone rigorous tests and is equipped with advanced stealth features and precision weapon capabilities. Dive deeper

Strata has received SEBI approval to launch its Small and Medium Real Estate Investment Trust (SM-REIT), named Strata SM REIT. This new platform will allow retail and institutional investors to invest in high-quality commercial properties in major cities, with plans to launch up to six schemes in 2025-26. Dive deeper

Mahanagar Gas Ltd. (MGL) has received a 26% increase in domestic gas allocation at APM prices from GAIL, effective January 16. This will raise the allocation for compressed natural gas from 37% to 51%. In Q2 FY25, MGL reported a 7.1% revenue growth, but its net profit and EBITDA declined slightly. Shares of MGL closed 1.45% higher at Rs 1,270.65. Dive deeper

Indian Overseas Bank (IOB) is selling ₹11,500 crore of non-performing assets (NPAs) to asset reconstruction companies (ARCs). The sale involves 46 loan accounts, with bids invited for an e-auction scheduled for January 30, 2025, as part of the bank's strategy to enhance asset quality and recovery. Dive deeper

RBI accepted 77% of the notified amount in January’s government security buyback auctions, totaling ₹19,217.5 crore from ₹25,000 crore. The auctions saw aggressive bidding from banks amid tight liquidity, with total bids reaching ₹45,710.2 crore. This buyback aims to reduce the government's debt for the upcoming fiscal year. Dive deeper

Adani Group plans to raise ₹7,148 crore from the sale of up to 20% of its stake in Adani Wilmar, marking the first phase of its exit from the FMCG company. The Offer for Sale (OFS) includes an option to sell an additional 6.5% equity. The proceeds will support Adani’s focus on its core infrastructure businesses. Dive deeper

Godrej Properties has acquired a 24-acre land parcel in Indore, with an estimated saleable area of 6.20 lakh square feet. The project, focusing on premium residential plots, has a revenue potential of ₹500 crore and strengthens the company's presence in the city. Dive deeper

Hindustan Copper Ltd. has appointed South West Mining Ltd. as the Mine Developer cum Operator (MDO) for reopening and expanding Rakha Copper Mine in Jharkhand. The agreement, signed on January 9, 2025, includes developing a new underground mine at Chapri and commissioning a new concentrator plant, with a project cost of ₹2,700 crore. Dive deeper

JSW Steel achieved its highest-ever quarterly consolidated crude steel production of 7.03 million tonnes in Q3 FY25, marking a 4% QoQ and 2% YoY increase. Indian operations contributed 6.82 million tonnes, with a 91% capacity utilization. The company is progressing with its Vijayanagar plant expansion, targeting 17.5 MTPA by Q4 FY25. Dive deeper

PNG Jewellers has entered a multi-year partnership with the World Pickleball League (WPBL) as the Powered By Partner. The league, launching on January 24, 2025, aims to blend sports and entertainment while promoting women’s empowerment. Dive deeper

Syrma SGS Technology Limited has partnered with MSI to manufacture laptops in India, marking a step towards localizing production under the 'Make in India' initiative. The laptops will be assembled at Syrma SGS’s Chennai facility, and the collaboration aims to meet the growing demand for MSI products in India. Dive deeper

BHEL and ONGC have signed an MoU to explore joint projects in renewable energy, including Fuel Cells, Electrolyser, and Battery Energy Storage Systems, supporting India’s National Green Hydrogen Mission. Dive deeper

Delta Corp shares surged 15.4% to ₹130.8 before closing 5% higher after the Supreme Court stayed proceedings on show-cause notices worth ₹1.12 lakh crore issued to online gaming companies by GST authorities, pending a final decision by the apex court. Dive deeper

What’s happening globally

Brent crude oil futures rose over 2% to surpass $78.5 per barrel, driven by a drop in US crude stockpiles and cold weather reducing inventories at Cushing, Oklahoma. Tightening global supply from key exporters like Russia and Iran, along with increased demand for heating fuels, also supported the price rise. Oil is set for its third consecutive weekly gain. Dive deeper

European markets traded flat to lower amid concerns about the UK's debt markets, with attention turning to US jobs data for clues on the Fed's rate path. The Stoxx 50 fell by 0.1%, while the Stoxx 600 remained flat. Ubisoft's shares dropped over 8% after announcing a review of strategic options. Investors also monitored rising UK gilt yields, reflecting concerns over the UK's fiscal policies and weak economic data. Dive deeper

The US is expected to add 160K jobs in December 2024, with the unemployment rate staying at 4.2%. Wages are forecast to rise 0.3%, maintaining 4% annual growth. Total payroll gains for 2024 are expected to reach 2.144 million. Dive deeper

Norway’s annual consumer inflation rate dropped to 2.2% in December 2024, the lowest since December 2020, down from 2.4% in November. This was driven by lower inflation in food, housing, and utilities. The CPI-ATE rose 2.7%, slowing from November’s 3%. For the full year, inflation averaged 3.1%. Dive deeper

China's 10-year government bond yield dropped to 1.62% after the People's Bank of China halted treasury bond purchases due to a supply shortage. This move follows concerns over China’s economic outlook, marked by a property market crisis and deflationary pressures. Economic data showed consumer prices fell to 0.1% in December, while producer prices eased by 2.3%. Dive deeper

Sweden's economy grew 1.4% month-over-month in November 2024, rebounding from a 0.4% decline in October and marking the fastest growth since January 2023. The growth was driven by improvements in both goods and services, with ICT services and manufacturing showing the largest increases. Dive deeper

Switzerland's unemployment rate rose to 2.8% in December 2024, up from 2.6% in November, marking the highest level since July 2021. The number of unemployed persons increased by 9.2 thousand to 130.3 thousand, while youth unemployment also rose to 2.7%. Dive deeper

Japan's household spending fell 0.4% year-on-year in November 2024, the fourth consecutive decline but the mildest. Spending on food, fuel, and furniture dropped, while housing, medical care, and education saw gains. Monthly, personal spending rose 0.4%. Dive deeper

Quarterly results

In this section, we'll dive into all the key highlights from today's intriguing results, covering the most impactful performances and standout moments. The numbers are comparable on a year-on-year (YoY) basis.

Indian Renewable Energy Development Agency (- 6.91%)

Financials:

Revenue: ₹1,698.45 crore, up 35.6% YoY
Net Profit: ₹425.38 crore, up 27% YoY (from ₹335.53 crore in Q3 FY24)
Operating Profit: ₹652 crore, up 51% YoY
Interest Income: ₹1,654.45 crore, up from ₹1,577.05 crore in Q2 FY25
Other Income: ₹30.93 crore, up from ₹9.53 crore in Q2 FY25
Expenses: ₹1,160.78 crore, up from ₹867.06 crore in Q3 FY24

Key Highlights:

Strong growth in revenue and operating profit due to increased interest income.
The company's NPAs have increased, but the NPA percentage has improved slightly.
Increase in debt-to-equity ratio, indicating higher leverage.

Outlook:

IREDA continues to focus on expanding its loan book and maintaining its growth in the renewable energy sector, despite rising leverage and NPA levels.

GTPL Hathway (-10.91%)

Financials:

Revenue: ₹887.27 crore, up 4.27% YoY
EBITDA: ₹113.80 crore, down 12.76% YoY
Net Profit: ₹10.17 crore, down 57.03% YoY (from ₹23.67 crore in Q3 FY24)
EBITDA Margin: 12.7%, down from 15.2% YoY

Key Highlights:

Weak financial performance with a significant decline in net profit and EBITDA.
Modest revenue growth, primarily driven by increased subscriber base across business divisions.

Outlook:

Despite weaker financials, subscriber growth across segments provides some support for future performance.

G M Breweries Limited (-1.50%)

Financials:

Net Sales: ₹165.84 crore, up 5.66% YoY
Net Profit (PAT): ₹21.97 crore, down 2.79% YoY (from ₹22.60 crore in Q3 FY24)
EBITDA: ₹30.95 crore, down 4.09% YoY
EPS: ₹9.61, down from ₹12.37 YoY

Key Highlights:

Revenue growth, despite a decline in net profit and EBITDA.
The decline in profit was primarily driven by higher raw material costs and increased expenses.

Outlook:

GM Breweries continues to show modest growth in sales, although profitability has been under pressure.

Management chatter

In this section, we pick out interesting comments made by the management of major companies and policymakers of the Indian and Global Economy.

Sundararaman Ramamurthy, MD & CEO, BSE

The pipeline for the coming year is not bad in terms of DRHPs with SEBI. Around Rs 1 lakh crore is being planned to be raised from the market. The IPO appears to be a good one and looks to be in a good situation. The mutual fund market is growing nicely and more and more SIPs are coming in. The year also saw the highest amount of redemption on specific days because of the global market conditions and the FPI selling and all were witnessed. - Link

Mark Matthews, Julius Baer

The dollar is a reason why Indian markets are under pressure, but fundamentally, the dollar is extremely overvalued.
On the other hand, interest rates may stay high in the US.
The US market has done very well in the last 2 years, but it’s trading above its long-term PE ratio.
Currently, it’s not wildly expensive, but it’s fairly valued.
Some of the stocks that have gone up significantly may correct.
US tech stocks may perform in line at best.
Hyper-scaler, mega-cap companies may not necessarily be big winners in AI. - Link

Calendars

In the coming days, we have the following major events and corporate actions:

That’s it from us. Do let us know your feedback in the comments and share it with your friends to spread the word.

We’re now on Telegram, follow us for interesting updates on what’s happening in the world of business and finance. Join the conversation on today’s market action here.

Aftermarket Report by Zerodha

Discussion about this post