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Benchmark indices opened slightly higher on Thursday, driven by gains in IT and financial stocks following a brief rally in the prior session. The S&P BSE Sensex rose 153.84 points to 78,661.25, while NSE Nifty advanced 40.10 points to 23,783.00 by 9:35 AM. Dr. V K Vijayakumar of Geojit Financial Services noted that weak indicators, such as a 2.97% drop in December GST collections, signal a continued economic slowdown, with Q3 corporate earnings unlikely to rebound. He advised focusing on resilient sectors like IT, pharma, financials, and luxury consumption.
Bajaj Finance surged 3.20%, leading Nifty50 gainers, followed by Bajaj Finserv (+1.98%) and Kotak Mahindra Bank (+1.62%). NTPC fell 0.90%, leading decliners.
Nifty IT gained 0.77%, while financial services indices showed strength. However, Nifty PSU Bank plunged 5.18%. Mixed trends persisted, with healthcare and consumer sectors under pressure. Vijayakumar highlighted strong U.S. yields and a robust dollar influencing FII outflows, dampening market recovery.
The Union Cabinet has approved a total allocation of Rs 69,515.71 crore for continuing the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather-Based Crop Insurance Scheme (RWBCIS) until 2025-26. This decision, aimed at providing risk coverage for farmers against non-preventable natural calamities, was made under the leadership of Prime Minister Narendra Modi.
To enhance technology use in the schemes, the Cabinet also approved the Fund for Innovation and Technology (FIAT) with Rs 824.77 crore. This fund supports initiatives like YES-TECH, which uses remote sensing for crop yield estimation, already adopted by nine states, with others joining soon. Additionally, the WINDS initiative will establish Automatic Weather Stations and Rain Gauges to improve weather data density by five times. States like Kerala, Karnataka, and Uttar Pradesh are preparing for its implementation. The Cabinet has designated 2024-25 as the launch year for WINDS, ensuring states benefit from enhanced central funding.
India's manufacturing sector recorded its slowest growth of 2024 in December, with the Manufacturing Purchasing Managers’ Index (PMI) dipping slightly to 56.4 from 56.5 in November. Despite easing input costs and robust job creation, softer demand impacted the sector's performance.
The HSBC Final India Manufacturing PMI, compiled by S&P Global, remained above its long-term average of 54.1, signaling steady expansion. Both output and new orders grew, though at a reduced pace. Job creation accelerated, with one in ten firms hiring additional staff, while layoffs were minimal.
Economist Ines Lam noted a moderation in new order growth, hinting at slower future production, despite an uptick in export orders. Input price inflation eased slightly, capping a year marked by cost pressures.
The PMI, an indicator of manufacturing activity based on surveys of purchasing managers, reflects trends in production, orders, employment, and inventory, offering insights into economic conditions.
Indian exporters face severe liquidity constraints due to high interest rates and a decline in export finance, weakening their global competitiveness, according to Sanjay Budhia, Chairman of CII National Committee on EXIM. He urged the government and banks to collaborate on solutions.
Budhia recommended extending the interest equalisation scheme, which ended on December 31, 2024, for three years for all manufacturing exporters, including MSMEs. He emphasized raising the interest subsidy on pre- and post-shipment credit from 3% to 5% for sectors like leather, engineering, apparel, and gems.
The Federation of Indian Export Organisations (FIEO) also proposed a five-year extension of the scheme. Budhia highlighted the need to expand Letter of Credit facilities and broaden coverage under export credit guarantee programs.
Additionally, he suggested enhancing the RoDTEP scheme by transferring benefits directly to exporters’ accounts to reduce delays and ensure efficiency, stressing that affordable credit access is essential for sustainability.
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