Benchmarks decline for 3rd day; VIX tumbles 4.78%; financial services shares drop

The key domestic indices ended with minor losses on Thursday, declining for the third consecutive day following losses in other Asian markets. Investor sentiment weakened amid uncertainty over U.S. tariff policies and their potential inflationary impact. The Nifty closed below the 22,950 mark. Trading was volatile due to the weekly Nifty 50 F&O series expiry today.

Financial Services, Bank, and IT shares declined while metal, PSU Bank and oil & gas shares advanced.

As per provisional closing data, the barometer index, the S&P BSE Sensex, slipped 203.22 points or 0.27% to 75,735.96. The Nifty 50 index shed 19.75 points or 0.09% to 22,913.15. In the past three trading session, the Sensex and Nifty declined 0.34% and 0.2% respectively.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index advanced 1.18% and the S&P BSE Small-Cap index gained 1.32%.

The market breadth was strong. On the BSE, 2,668 shares rose and 1,274 shares fell. A total of 111 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, declined 4.78% to 14. 68.

Politics:

Rekha Gupta will be sworn in as the new Chief Minister of Delhi today at Ramlila Maidan. The oath will be administered by Lieutenant Governor Vinai Kumar Saxena, with Prime Minister Narendra Modi, Home Minister Amit Shah, Defence Minister Rajnath Singh, and other dignitaries in attendance.

Gupta, who won from the Shalimar Bagh seat, began her political career in 1992 with ABVP at Delhi University and later served as the General Secretary of BJP Mahila Morcha in Delhi. She secured victory over three-time AAP MLA Bandana Kumari by 29,595 votes. Her selection as CM came 10 days after the BJP's landslide win in the Delhi Assembly elections, where the party secured 48 out of 70 seats, ending AAPs decade-long rule. The BJP has yet to announce its ministerial lineup.

Outgoing CM Atishi and AAP leader Arvind Kejriwal have extended their best wishes. Rekha Gupta will be Delhis fourth woman CM after Sushma Swaraj, Sheila Dikshit, and Atishi.

Stocks in Spotlight:

Mahindra & Mahindra added 3.01% after the firm has entered into strategic partnership with US-based Anduril Industries, a leader in autonomous systems, to co-develop cutting-edge security and surveillance technologies.

Larsen & Toubro shed 0.24%. The company announced that its minerals & metals (M&M) business vertical of L&T secured large order from Hindalco for setting up an 850 KTPA (kilo tonne per annum) greenfield alumina refinery plant in Odisha.

Garden Reach Shipbuilders & Engineers (GRSE) shed 0.38%. The company has signed a contract worth Rs 123.07 crore with the Ministry of External Affairs, Government of India, for the refit of the Mauritius Coast Guard ship, CGS Barracuda.

Bharat Forge rose 0.74%. The company announced that its 100% subsidiary, Kalyani Strategic Systems (KSSL), has signed a Letter of Intent (LOI) with AM General, USA for the supply of made-in-India advanced artillery cannons to the United States.

ITCONS E-Solutions was locked in the upper circuit of 5% after the firm secured a new work order from Wipro to provide manpower services on a contractual basis for the period of one year.

Thomas Cook (India) surged 11.74% after the company and its group company SOTC Travel, has signed a strategic 24-month partnership with Korea Tourism Organization (KTO) to create a special projects in the India market.

Intellect Design Arena added 1.10% after the company announced the signing of a multi-year deal with leading London Market Brokerage firm worth Rs 200 crore.

Krishna Institute of Medical Sciences (KIMS) rose 0.97%. The company announced the signing of an operations and management agreement (O&M) with Splendid Hospitals, Hyderabad, Telangana.

Avantel jumped 14.85% after the company announced that it has bagged a new order from NewSpace India for supply, installation and commissioning of devices for Xponders.

Global Markets:

US Dow Jones index futures were down 49 points, suggesting a weak opening for US equities.

Most European markets advanced on Thursday as investors monitor earnings reports from a raft of major European companies.

Earnings from corporates including Accor, Renault, Mercedes-Benz, Leonardo and Airbus were also in focus as the trade session kicked off.

Asian stocks ended lower on Thursday as investors assessed U.S. President Donald Trumps proposed tariffs on autos, chips, and pharmaceutical imports, along with the possibility of the Federal Reserve keeping interest rates higher for longer.

Trump, who said the duties could be implemented as soon as April 2, did not specify whether they will be targeted at imports from certain countries or be broad-based.

The minutes from the Feds January meeting showed policymakers remained hesitant about lowering interest rates amid persistent inflation and economic uncertainty. Officials also discussed the possibility of pausing or slowing the balance-sheet runoffknown as quantitative tightening (QT)until the ongoing debt-ceiling issue is resolved.

Trump announced plans to impose a 25% tariff on automobile, pharmaceutical, and semiconductor imports, a move that could escalate global trade tensions. These tariffsultimately shouldered by U.S. importershave raised fears of further inflationary pressure in the short term.

The Peoples Bank of China held the 1-year loan prime rate unchanged at 3.1%, and the 5-year LPR at 3.6%. The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.

The Hong Kong consumer price inflation increased to 2% in January 2025 as against 1.4% in December 2024 and 1.7% in January 2024. Orders for Taiwanese exports fell by 3% year-on-year to $48.4 billion in January 2025, slipping from a 20.8% growth in December 2024.

Despite cautious signals from the Fed, U.S. indices managed mild gains on Wednesday. The S&P 500 inched up 0.2% to a record high of 6,144.09 points, while the NASDAQ Composite added 0.1%, closing at 20,057.25 points. The Dow Jones Industrial Average also rose 0.2%, settling at 44,627.46 points.

The Fed minutes reiterated concerns about stubborn inflation and policy uncertainty, suggesting that rate cuts are unlikely in the near term.

Palantir Technologies tumbled more than 4% in after-hours trading, extending an 11% loss from Wednesdays session. Other defense stocks, including Lockheed Martin and RTX Corp, also saw mild aftermarket declines following reports that Defense Secretary Peter Hegseth had instructed Pentagon leaders to prepare for annual budget cuts of at least 8% over the next five years.

Fresh U.S. economic data released Wednesday showed a slowdown in housing starts for January, as both single-family and multifamily home construction pulled back. Housing starts slumped 9.8% month-over-month to an annualized 1.366 million, down from Decembers 10-month high of 1.515 million.

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