The domestic equity benchmarks experienced modest losses this week, primarily driven by several key factors. The major union budget event led by Finance Minister Nirmala Sitharaman impacted investor confidence. Further, on the monetary policy front, the Reserve Bank of India (RBI) made a significant move by slashing interest rates for the first time in nearly five years, as expected, in an effort to revive economic growth. Additionally, concerns over trade tariffs raised by President Donald Trump further pressured market sentiment. These developments combined to create a cautious market environment this week.
In the week ended on Friday, 07 February 2025, the S&P BSE Sensex declined 359.62 points or 0.46% to settle at 77,860.19. The Nifty 50 index lost 51.55 points or 0.22% to settle at 23,559.95. The BSE Mid-Cap index shed 0.10% to close at 43,050.27. The BSE Small-Cap index rose 0.41% to end at 50,164.22.
Weekly Index Movement:
The key equity indices remained volatile on Budget Day, Saturday. The S&P BSE Sensex added 5.39 points or 0.01% to 77,505.96. The Nifty 50 index lost 26.25 points or 0.11% to 23,482.15.
The domestic equity benchmarks closed modestly lower on Monday. The S&P BSE Sensex declined 319.22 points or 0.41% to 77,186.74. The Nifty 50 index lost 121.10 points or 0.52% to 23,361.05.
The domestic equity benchmarks soared on Tuesday. The S&P BSE Sensex soared 1,397.07 points or 1.81% to 78,583.81. The Nifty 50 index rallied 378.20 points or 1.62% to 23,739.25.
The key equity benchmarks closed lower on Wednesday. The S&P BSE Sensex tumbled 312.53 points or 0.40% to 78,271.28. The Nifty 50 index fell 42.95 points or 0.18% to 23,696.30.
The domestic equity benchmarks declined for the second consecutive day on Thursday. The S&P BSE Sensex slipped 213.12 points or 0.27% to 78,058.16. The Nifty 50 index lost 92.25 points or 0.39% to 23,603.35.
The key equity benchmarks ended with limited losses on Friday. The S&P BSE Sensex declined 197.97 points or 0.25% to 77,860.19. The Nifty 50 index lost 43.40 points or 0.18% to 23,559.95.
Union Budget 2025: Tax Relief, Infrastructure Push, and Focus on Key Sectors
Finance Minister Nirmala Sitharaman delivered the Union Budget 2025, outlining a comprehensive vision for India's economic growth and inclusive development. The budget emphasizes key sectors like education, technology, manufacturing, healthcare, access to credit, and agriculture, while prioritizing fiscal responsibility. A major highlight is significant tax relief for the middle class.
In a move that will likely resonate with taxpayers, Sitharaman announced that individuals with an income of up to Rs 12 lakh will now be exempt from income tax under the new tax regime. This measure aims to provide substantial financial relief to the middle class. The new tax slabs under this regime are as follows: Rs 4 to 8 lakh at 5%, Rs 8 to 12 lakh at 10%, Rs 12 to 16 lakh at 15%, Rs 16 to 20 lakh at 20%, Rs 20 to 24 lakh at 25%, and Rs 24 lakh and above at 30%.
The Finance Minister reiterated the government's commitment to fiscal consolidation, aiming to maintain a downward trajectory for the fiscal deficit and reduce central government debt as a percentage of GDP. The budget projects total receipts for 2024-25 at Rs 31.47 lakh crore and total expenditure at Rs 47.16 lakh crore. The fiscal deficit target for FY25 is set at 4.8%, with a further reduction to 4.4% planned for FY26.
A new Income Tax bill, focused on trust-based and streamlined compliance, will be introduced next week. Several measures aim to streamline tax processes, including faceless assessments, faster tax returns, and five Vivad Se Vishwas schemes for expedited dispute resolution. To attract foreign investment, the FDI limit in the insurance sector has been increased from 74% to 100%. Mergers and acquisitions will be facilitated through quicker approvals and expanded regulations, improving the ease of doing business.
The Union Budget 2025-26 allocated Rs 6,81,210.27 crore to the Ministry of Defence (MoD). This represents a 9.53% increase from the Budgetary Estimate of FY 2024-25 and constitutes 13.45% of the total Union Budget (the highest allocation among ministries). Of the total allocation, Rs 1,80,000 crore (26.43%) is earmarked for capital outlay on defence services, a 4.65% increase from the Budgetary Estimate of FY 2024-25. Within this, Rs 1,48,722.80 crore is designated for capital acquisition (the modernization budget), while the remaining Rs 31,277.20 crore will fund research & development and infrastructure development.
Technology will be a major focus, with the establishment of three Centers of Excellence for Artificial Intelligence (AI) with a Rs 500 crore outlay, focusing on AI in education. A National Manufacturing Mission will support clean technology production, including domestic manufacturing of electric vehicle (EV) batteries and solar panels. Five new national skilling centers will be established, and existing IITs will expand infrastructure to accommodate 6,500 more students. Atal Tinkering Labs will be introduced in government schools to foster innovation.
Infrastructure development receives a boost through the PM Gatishakti initiative, which will provide the private sector with access to crucial data and maps for improved logistics and infrastructure planning. Tourism, a significant employment generator, will be promoted through collaboration with states to develop 22 top tourism destinations. Energy security is prioritized, with a plan to develop 100 gigawatts of nuclear energy by 2047. Basic Customs Duty (BCD) exemption on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals will ensure the availability of these materials for manufacturing.
Healthcare will be strengthened by establishing daycare cancer centers in all district hospitals within three years. Medical tourism will be promoted through public-private partnerships and easier visa norms. Access to credit for micro, small enterprises, startups, and exporters will be significantly expanded. The credit guarantee cover for micro and small enterprises will double to Rs 10 crore, unlocking substantial additional credit. Startups will see their cover rise to Rs 20 crore. Exporter MSMEs will be eligible for term loans up to Rs 20 crore, and micro-enterprises on the Udyam portal will receive customized credit cards with a Rs 5 lakh limit.
Entrepreneurship will be supported by a New Fund of Funds for Startups, with an additional Rs 10,000 crore, doubling the existing allocation. A Food Processing Institute will be established in Bihar, and a new Manufacturing Mission will support "Make in India." A special scheme will offer term loans to 5 lakh women-led businesses. Agriculture receives substantial support through the PM Dhan Dhanya Krishi Yojana, aimed at enhancing productivity in 100 districts. The Developing Agri Districts Programme will improve irrigation and credit access for 1.7 crore farmers. NAFED and NCCF will directly procure pulses from farmers to ensure self-reliance. A Makhana Board will be set up in Bihar, and a National Mission on High-Yielding Seeds will boost farm productivity.
Sitharaman emphasized investment as one of the major engine of growth, highlighting transformative reforms across various sectors. The budget prioritized GYAN (Garib, Youth, Annadata, and Nari), energy security, economic resilience, and export promotion. Agriculture, MSMEs, and exports are positioned as other key drivers of India's economic expansion. The 2025-26 budget aims to build household confidence and empower the middle class. Sitharaman highlighted India's rapid economic growth and growing global confidence in its potential, emphasizing the next five years as crucial for achieving "Sabka Vikas" (inclusive development).
Meanwhile, the Budget session of Parliament commenced on January 31 with President Droupadi Murmu’s address and will be conducted in two parts. The first part will run until February 13, while the second will be held from March 10 to April 4.
Economy:
India’s fiscal deficit for the first nine months of the current fiscal year stood at Rs 9.14 lakh crore, or 56.7% on the annual estimates, data released by the Controller General of Accounts (CGA) showed on Friday, according to media reports. The fiscal deficit widened from 55% in the comparable year- earlier period. Total receipts for the period stood at Rs 23.18 lakh crore, while overall government expenditure in April to December was at Rs 32.32 lakh crore.
The combined index of Eight Core Industries (ICI) increased by 4% (provisional) in December 2024 as compared to the index in December 2023. The production of coal, electricity, steel, cement, refinery products, fertilizers, and crude oil recorded positive growth in December 2024.
The final growth rate of Index of Eight Core Industries for September 2024 increased by 2.4%. The cumulative growth rate of ICI during April to December 2024–25 is 4.2% (provisional) as compared to the corresponding period of last year.
Meanwhile, In January, the seasonally adjusted HSBC India Services PMI Business Activity Index stood at 56.5, indicating a sharp rate of expansion in business activity compared to the previous month. However, the headline figure declined from 59.3 in December to its lowest level since November 2022. This drop suggests a slowdown in the pace of growth within the sector.
The HSBC India Composite Output Index dropped from 59.2 in December to a 14-month low of 57.7. Despite the decline, the latest figure remained above the long-run series average, indicating that the economy is still experiencing a robust upturn.
Further, The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) Friday cut the repo rate—the rate at which the RBI lends to other banks—by 25 basis points to 6.25% after keeping it unchanged for two years.
This is the first rate cut initiated by the RBI in five years, the last one being in May 2020. RBI, however, continues with the neutral monetary policy stance and remains unambiguously focused on a durable alignment of inflation with the target while supporting growth.
The decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2% while supporting growth, the central bank noted. This was the first RBI policy under the new Governor Sanjay Malhotra and also the first RBI MPC meeting after the Union Budget 2025-2026 was presented on February 1.
Stocks in Spotlight:
Mahindra & Mahindra (M&M) rallied 6.88%. The company reported 19.06% jump in standalone net profit to Rs 2,964.31 crore in Q3 FY25 as compared with Rs 2,489.73 crore in Q3 FY24. Revenue from operations jumped 20.31% YoY to Rs 30,963.76 crore in Q3 FY25.
Hero MotoCorp fell 1.44%. The company reported 12.1% increase in standalone net profit to Rs 1,202.84 crore in Q3 FY25 as compared with Rs 1,073.38 crore in Q3 FY24. Revenue from operations rose 5% to Rs 10,210.78 crore in Q3 FY25.
Maruti Suzuki India advanced 5.99%. The company’s total sales increased 6.46% to 212,251 units in January 2024 as against 199,364 units sold in January 2023.
Meanwhile, the car manufacturer’s total production marginally rose to 206,851 units in January 2024 as against 204,876 units recorded in January 2023.
Oil & Natural Gas Corporation (ONGC) fell 5.14 %. The company’s standalone net profit fell 16.7% to Rs 8,239.92 crore in Q3 FY25 compared with Rs 9,891.71 crore in Q4 FY24. Revenue from operations declined 3.08% YoY to Rs 33,716.80 crore in Q3 FY25.
Divi's Laboratories soared 10.03%. The pharma major’s consolidated net profit surged 64.53% to Rs 589 crore on 25.01% rise in revenue from operations to Rs 2,319 crore in Q3 FY25 over Q3 FY24.
Asian Paints fell 1.30%. The company’s consolidated net profit surged 59.86% to Rs 1,110.48 crore on 6.47% rise in revenue from operations to Rs 8,521.51 crore in Q3 FY25 over Q2 FY25.
Adani Ports and Special Economic Zone added 4.32%. The firm delivered the highest ever monthly cargo volume of 39.9 MMT in January 2025, higher by 13% on a year-on-year (YoY) basis.
Titan Company slipped 1.87%. The company reported a 4.80% decline in standalone net profit to Rs 990 crore in Q3 FY25 as against Rs 1,040 crore posted in Q3 FY24. However, revenue from operations jumped 24.32% year on year (YoY) to Rs 16,053 crore in the quarter ended 31 December 2024.
Tata Power Company rose 0.68%. The company's consolidated net profit rose 8.2% YoY to Rs 1,030.70 crore in the quarter ended 31st December 2024. Net sales increased 5.1% to Rs 15,391.06 crore in Q3 FY25 as compared with Rs 14,651 crore in Q3 FY24.
Angel One added 2.87%. The stockbroker’s client base jumped 47.5% to 30.13 million in January 2025 as compared with 20.43 million in January 2024.
Zydus Lifesciences rose 2.53%. The company reported a 29.62% jump in consolidated net profit of Rs 1,023.5 crore inQ3 FY25 compared with Rs 789.6 crore in Q3 FY24. Revenue from operations increased 16.96% YoY to Rs 5,269.1 crore during the quarter.
Bharti Airtel added 3.13% The telecom major posted consolidated quarterly revenues of Rs 45,129 crore up 19.1% YoY, up 8.8% QoQ, driven by strong underlying momentum in India, sustained constant currency growth in Africa and Indus Tower consolidation effective 19 November 2024. Consolidated net income (before exceptional items) stood at Rs 5,514 crore, up by 121.3%YoY. This quarter saw exceptional items primarily due to consolidation of Indus Towers.
Trent dropped 5.18%. The company reported 33.97% rise in consolidated net profit to Rs 496.54 crore on a 34.33% increase in revenue from operations to Rs 4,656.56 crore in Q3 FY25 as compared with Q3 FY24.
State Bank of India fell 4.66%. The bank’s standalone net profit grew 84.32% to Rs 16,891.44 crore on an 8.69% rise in total income to Rs 1,28,467.39 in Q3 FY25 over Q3 FY24. Net interest income rose 10.02% to Rs 1,17,427 crore in Q3 FY25 compared with Rs 1,06,734 crore in Q3 FY24. Net interest margin (domestic) reduced by 19 bps to 3.15% in Q3 FY25 as against 3.34% in Q3 FY24.
Swiggy slumped 8.52%. The company reported consolidated net loss of Rs 799.08 crore in Q3 FY25 compared with net loss of Rs 574.38 crore in Q3 FY24. However, revenue from operations jumped 30.98% to Rs 3993.06 crore in Q3 FY25 as compared with Rs 3,048.69 crore in Q3 FY24. Swiggy’s gross order value (GOV) grew 38% YoY to Rs 12,165 crore, while the consolidated adjusted EBITDA loss reduced by around 2% YoY to Rs 490 crore. The platform’s average monthly transacting users (MTU) increased 25.3% YoY to reach 17.8 million.
Britannia Industries tumbled 4.92%. The company’s consolidated net profit increased 4.5% to Rs 581.69 crore on 6.5% jump in revenue from operations to Rs 4,463.30 crore in Q3 FY25 over Q3 FY24.
Global Markets:
Bank of England cut its key rate by 25 basis points and signaled more cuts were on the horizon in 2025
US President Donald Trump extended the proposed 25% import duties on Canada and Mexico by 30 days but remained firm on China, allowing his 10% tariffs on Chinese goods to take effect on Tuesday.