Sensex drops 700 pts to 76,350; All sectors barring Health in red

Indian benchmark equity indices BSE Sensex and Nifty 50, were trading lower, after opening with slight gains on Tuesday, amid mixed global cues following the inauguration of President Donald Trump.

At 10 AM, the BSE Sensex was lower by 337.99 points, or 0.44 per cent, at 76,735.45, and the Nifty 50 was at 23,303.30, lower by 41.45 points, or 0.18 per cent.

After the opening bell, on the 30-stock BSE Sensex, only eight stocks were trading lower, with losses capped by Zomato (down 8.01 per cent), followed by Bharti Airtel, NTPC, Kotak Mahindra Bank, and Adani Ports & SEZ, while gains were led by UltraTech Cement (up 2.01 per cent), followed by Titan, Nestle India, ITC, and Tata Motors.

On the Nifty 50, 35 stocks were trading higher, with gains led by Apollo Hospital Enterprises (up 2.48 per cent), followed by UltraTech Cement, Wipro, BPCL, and Sun Pharma, while losses were capped by Adani Enterprises (down 0.67 per cent), followed by Trent, ONGC, Kotak Mahindra Bank, and NTPC.

Meanwhile, across sectors, the Nifty Consumer Durables index was the top drag, declining 1.23 per cent, followed by the Realty index (down 0.92 per cent), PSU Bank (down 0.23 per cent), Nifty Bank (down 0.05 per cent) and Private Bank (down 0.04 per cent). In contrast, the Healthcare index was the top gainer, climbing 1.17 per cent, followed by the Pharma, Media, Auto, IT, FMCG, Metal, and Oil indices.

In the broader markets, the Nifty Smallcap 100 was higher by 0.28 per cent and the Nifty Midcap 100 was flat.

While markets in the US were closed on account of Martin Luther Kind Jr. Day holiday on Monday, Donald Trump’s inauguration as the President of the United States of America for his second term was the highlight of the day as investors closely tracked news flow around orders and commentary emanating from the new administration.

Trump used his inauguration speech to announce emergencies on immigration and energy and a more expansionist foreign policy, including a pledge to take back the Panama Canal. Yet there was only a brief mention of tariffs in Trump’s inauguration speech and a following memo merely directed agencies to investigate and remedy persistent trade deficits, according to a Reuters report.

Closer home, Indian equity markets are now facing a situation similar to 2013 when a combination of rising bond yields in the US, an earnings slowdown, and higher inflation in India led to a decline in stock prices during the first half of that year. The correction in stock prices was driven by a selloff by foreign portfolio investors (FPIs). This was accompanied by a falling rupee against major currencies in 2013, much like the trend observed in the past three months.

Most emerging markets (EMs), including India, have experienced volatility ahead of Donald Trump’s second term. However, history suggests that the 12-month return for both US and Indian equities after the presidential inauguration day have been positive.

The average one-year return for the benchmark Nifty 50 and US’ Dow Jones after the previous nine inauguration days, starting with George HW Bush, is around 30 per cent and 16 per cent, respectively, data compiled by BS Research Bureau shows.

In other news, India is projected to account for 16 per cent of global consumption at purchasing power parity (PPP) by 2050, up from 4 per cent in 1997 and 9 per cent in 2023 according to World Data Lab, a McKinsey Global Institute analysis said in a report on “Dependency and Depopulation: Confronting the Consequences of new Demographic Reality” released a few days ago. Only North America, with a 17 per cent share in 2050, will have a higher consumption share. READ MORE

To address the high number of pending applications, a standing committee reviewing the implementation of public-procurement orders, chaired by the secretary to the Department for Promotion of Industry and Internal Trade (DPIIT), has asked nodal ministries to submit their recommendations on registration of bidders from countries sharing land borders with India within 30 days of receiving the application. READ MORE

In other sphere of the world, where over the years, younger Indian politicians, including chief ministers, Union and state ministers, have attended the World Economic Forum’s (WEF’s) annual summit in Davos, Switzerland, to burnish their business and investor-friendly credentials. This year’s annual summit is no different.

That apart, the Reserve Bank of India (RBI) on Monday set up a new standing external advisory committee, which will evaluate applications for universal banks and small finance banks (SFBs). The committee headed by former RBI deputy governor M K Jain as the chairperson, has five members.

Elsewhere, the Ministry of Railways is set to launch freight-cum-passenger trains to enhance its revenue from time-sensitive parcel and small cargo shipments, according to sources familiar with the development.

Separately, the government has approved investment proposals worth Rs 3,516 crore from 24 companies in the third round of applications for the production linked incentive (PLI) scheme for white goods, the Department for Promotion of Industry and Internal Trade (DPIIT) announced on Monday. Of these, the government selected 18 companies—10 manufacturers of AC components and eight LED light manufacturers—with a committed investment of Rs 2,299 crore.

That apart, the Securities and Exchange Board of India (Sebi) on Monday proposed changes to the cut-off timings for determining the net asset value (NAV) in the case of repurchase transactions for mutual fund “overnight schemes.”

In other news, the Securities and Exchange Board of India (Sebi) has approved initial public offerings (IPOs) for six companies, including Hexaware Technologies, Vikran Engineering, PMEA Solar Tech Solutions, Ajax Engineering, All Time Plastics, and Scoda Tubes.

In the previous trading session, Indian markets closed on a positive note, with the 30-share BSE Sensex gaining 454 points or 0.59 per cent to settle at 77,073.44, and the Nifty50 closing at 23,344.75 with gains of 141 points or 0.61 per cent. Among the broader market indices, the Nifty Midcap100 ended up 0.91 per cent at 55,106.20 , and the Nifty Smallcap100 ended with gains of 1.09 per cent at 17,864.65.

The Nifty sectoral indices showed a mixed trend, with the Nifty Private Bank leading gains at 2.38 per cent, followed by Nifty PSU Bank (1.99 per cent) and Nifty Bank (1.67 per cent). Financials, metals, and healthcare also advanced, with Nifty Financial Services up 1.41 per cent and Nifty Metal gaining 1.08 per cent.

IT and realty posted modest gains, while Nifty Auto and Nifty FMCG slipped 0.52 per cent and 0.11 per cent, respectively.

In the mailine section of the primary markets today, the basis of allotment for Stallion India Fluorochemicals Limited IPO will get finalised today, while in the SME section, EMA Partners India Limited IPO will see its last day of subscription and CapitalNumbers Infotech Limited IPO will have Day 2 of its suscription window. The basis of allotment for Landmark Immigration Consultants Limited IPO in the SME section will also get finalised today.

Meanwhile, markets in the Asia-Pacific region were mixed, as investors await greater clarity on policies that US President Donald Trump will unveil.

Australia’s S&P/ASX 200 advanced 0.44 per cent. In Japan, the benchmark Nikkei 225 was down 0.08 per cent, and the Topix was lower by 0.15 per cent.

South Korea’s Kospi edged lower by 0.32 per cent and the Kosdaq declined 0.81 per cent.

Hong Kong’s Hang Seng was flat, while mainland China’s CSI 300 was behind by 0.31 per cent.

Elsewhere, the dollar nursed broad losses on Tuesday after US President Donald Trump stopped short of imposing new tariffs and reports suggested any new taxes would be imposed in a “measured” way, a major relief for trade-exposed currencies.

Yields on 10-year Treasuries fell 6 basis points to 4.56 per cent as investors had been worried a rapid imposition of tariffs would risk rekindling inflation.

Trump used his inauguration speech to announce emergencies on immigration and energy and a more expansionist foreign policy, including a pledge to take back the Panama Canal.

Yet there was only a brief mention of tariffs in Trump’s inauguration speech and a following memo merely directed agencies to investigate and remedy persistent trade deficits.

The reaction in markets was swift, with the dollar index falling 1.2 per cent on Monday in the sharpest daily loss since late 2023. The index last stood at 108.010, just above support around 107.70.

The lack of concrete tariff measures turned investors a little more dovish on the US rate outlook. Futures added about 4 basis points of extra Federal Reserve easing this year, putting rates at 3.90 per cent by December.

The probability of a quarter-point cut as early as May edged up to around 50 per cent, from 31 per cent a week earlier.

Trump’s support for crypto currencies helped bitcoin hit a record high on Monday at $109,071.86, before easing back to $102,000 in Asia on Tuesday.

US oil prices were down by more than $1 a barrel in early Asian trading on Tuesday from Friday’s close after President Donald

Trump took office and announced a plan to maximise US oil and gas production by declaring a national emergency.

The most actively traded WTI crude March contract fell by $1.02 to $76.37 a barrel by 2356 GMT on Monday.