Broader mkt underperforms; metal shares tumble

The key equity indices traded with major losses in the mid-morning trade, following weak cues from Asian markets. This decline was driven by heightened concerns over a potential broader trade war, particularly after US President Donald Trump imposed tariffs on Canada, Mexico, and China. The Nifty traded below the 23,300 level. Metal shares extended losses for the two consecutive trading sessions.

At 11:30 IST, the barometer index, the S&P BSE Sensex, tumbled 540.61 points or 0.70% to 76,966.06. The Nifty 50 index declined 192.20 points or 0.86% to 23,285.95.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 1.01% and the S&P BSE Small-Cap index lost 1.52%.

The market breadth was weak. On the BSE, 1,129 shares rose and 2,623 shares fell. A total of 183 shares were unchanged.

Economy:

India's forex reserves increased $5.574 billion to $629.557 billion in the week ended January 24, the Reserve Bank of India said on Friday (January 31). In the previous reporting week, the overall kitty had dropped $1.888 billion to $623.983 billion.

For the week ended January 24, foreign currency assets, a major component of the reserves, increased from $4.758 billion to $537.891 billion, as per the RBI data.

Gold reserves increased $704 million to $69.651 billion during the week. The Special Drawing Rights (SDRs) were up $79 million to $17.861 billion, the apex bank said.

India's reserve position with the IMF was up $33 million to $4.154 billion in the reporting week, the apex bank data showed.

Meanwhile, the budget announcement of zero tax for earnings up to Rs 12 lakh per annum and the rejig of tax slabs across the board should prompt more than 90% of individual taxpayers to embrace the new tax regime as compared to the about 75% as of now, CBDT Chairman Ravi Agrawal said on Sunday.

Agrawal said the government's and the Income-Tax Department's philosophy and approach is to ensure a "non-intrusive" tax administration in the country through an enhanced usage of artificial intelligence (AI) apart from the regular human intelligence gathering mechanism. The CBDT chief said the tax processes available to a "common" taxpayer for reporting their income were not "very complex," giving examples of the simplified ITR-1, pre-filled income tax returns, automatic computation of tax deducted at source (TDS), etc. available to them.

Buzzing Index:

The Nifty Metal index lost 2.16% to 8,119.25. The index tumbled 3.33% in two consecutive trading sessions.

Jindal Stainless (down 4.86%), National Aluminum Company (down 4.15%), APL Apollo Tubes (down 4.06%), Steel Authority of India (down 3.97%), NMDC (down 3.96%), Vedanta (down 3.85%), Hindustan Zinc (down 3.27%), Welspun Corp (down 2.74%), Hindustan Copper (down 2.58%), and Tata Steel (down 2.36%) declined.

On the other hand, Jindal Steel & Power (up 1.53%) and Ratnamani Metals & Tubes (up 0.05%) added.

Stocks in Spotlight:

Bajaj Auto declined 2.25%. The two-wheeler major reported a 7% increase in total auto sales to 3,81,040 units in January 2025 as against 3,56,010 units in January 2024.

Hero MotoCorp declined 2.53%. The company reported a 2.14% increase in total sales, reaching 442,873 units in January 2025, compared to 433,598 units in January 2024.

Global Markets:

The US Dow Jones index futures were currently down by 677 points, signaling a potential weak opening for US equities in the upcoming trading session.

Asian stocks tumbled on Monday, and US equity futures pointed sharply lower after US President Donald Trump's tariffs on Canada, Mexico, and China triggered fears of a broad trade war and hit global growth.

Meanwhile, China's Caixin manufacturing PMI grew 50.1 in January, below the prior months reading of 50.5.

The Trump administration announced new tariffs on imports from Mexico, Canada, and China, starting Saturday. These tariffs are partly in response to illegal fentanyl distribution. Potential tariffs include 25% on Mexican and Canadian imports, 10% on Chinese goods, and future tariffs on chips, oil, gas (possibly by February 18th), steel, aluminum, and copper. Trump insists these tariffs are unavoidable and will generate substantial revenue, even hinting at possible European tariffs. He contrasted the USs historical reliance on tariffs with its current dependence on income tax. All three countries decried the tariffs and vowed retaliation.

The news caused US stock market declines on Friday. At the close in NYSE, the Dow Jones Industrial Average fell 0.75%, while the S&P 500 index declined 0.5%, and the NASDAQ Composite index declined 0.28%.

Apple shares closed lower as the broader market selloff erased earlier gains. The company expects sales growth in the low- to mid-single digits for its fiscal second quarter, easing concerns about flagship handset sales, which slightly missed estimates in the holiday season. CEO Tim Cook remains optimistic, citing Apple Intelligence (AI features) as a driver of future sales.

Exxon Mobil stock fell 2.5%, despite exceeding fourth-quarter profit expectations. Higher oil and gas production helped offset lower crude prices and weaker refining margins.

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