Shares may recover on positive global signals

GIFT Nifty:

The Nifty 50 is projected to open higher, following a 66-point rise in the GIFT Nifty February 2025 futures contract.

Economy:

Indias retail inflation, based on the Consumer Price Index (CPI), eased to a five-month low of 4.31% in January 2025, mainly due to lower food prices, according to official data released on Wednesday. CPI-based retail inflation was 5.22% in December, and 5.1% in January 2024.

Indias industrial production growth, measured by the Index of Industrial Production (IIP) eased to 3.2% in December, down from a 6-month high of 5.2% in the previous month, according to data released by Ministry of Statistics & Programme Implementation (MoSPI). The slowdown was largely due to weaker manufacturing activity, which grew 3% in December compared to 5.5% in November.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 4,969.30 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 5,929.24 crore in the Indian equity market on 12 February 2025, provisional data showed.

According to NSDL data, FPIs have sold shares worth Rs 16129.90 crore (so far) in the secondary market during February 2025. This follows their sale of shares worth Rs 81903.72 crore in January 2024.

Global Markets:

Asian stocks saw a mixed performance on Thursday. A surge in Chinese tech stocks, driven by enthusiasm for artificial intelligence, and news of potential deals in Japan's technology sector provided positive momentum. However, concerns about high U.S. inflation tempered gains.

Market sentiment was also boosted by reports of potential peace talks between Russia and Ukraine, raising hopes for an end to the protracted conflict. This news contributed to a drop in oil prices.

It was reported that both the Russian and Ukrainian presidents expressed a desire to resolve the conflict in separate phone calls, and that steps were being taken to initiate peace talks. This development followed reports that Ukraine would no longer pursue NATO membership, a key point of contention for Russia.

U.S. stocks fell overnight after stronger-than-anticipated consumer price index (CPI) data was released. The inflation figures lessened expectations of near-term interest rate cuts.

At the NYSE close, the Dow Jones Industrial Average decreased by 0.50%, the S&P 500 index fell by 0.27%, and the NASDAQ Composite index showed a slight gain of 0.03%.

The CPI increased by 0.5% month-over-month, while the core CPI rose by 0.4%. These results fueled concerns about persistent inflationary pressures. Analysts pointed to the "upside surprise" in the CPI report, noting that it contradicted earlier forecasts of moderating inflation.

Overall market sentiment remained cautious due to ongoing trade tensions, including recently implemented tariffs on commodity imports and the potential for retaliatory tariffs.

Individual stock performance saw CVS Health Corp. rallying by nearly 15%, and Gilead Sciences Inc. increasing by 7.5%.

Domestic Market:

The domestic equity benchmarks closed lower on Wednesday, marking their sixth straight day of losses. Several factors contributed to the decline, including concerns over recently announced US tariffs, a weakening rupee, disappointing domestic corporate earnings, and continued FII outflows. The Nifty index closed below the 23,050 level. Real estate, energy, and auto stocks declined, while shares in public sector banks and metal companies saw gains.

The S&P BSE Sensex declined 122.52 points or 0.16% to 76,171.08. The Nifty 50 index lost 26.55 points or 0.12% to 23,045.25. In six consecutive trading sessions, the Sensex and Nifty lost 3.07% and 2.92%, respectively.

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