Sensex & Nifty Rebound as Inflation Cools; Market Awaits New Income Tax Bill

Sensex and Nifty rebounded on February 13, driven by financials, metals, and oil & gas stocks, as cooling inflation boosted investor sentiment. Market optimism was fueled by expectations of a reciprocal U.S.-India tariff agreement and potential RBI rate cuts, despite concerns over continued FII selling. Investors are also watching the New Income Tax Bill and key corporate earnings for further market direction.

• Sensex and Nifty Rebound as Cooling Inflation Lifts Investor Sentiment
• Indian stock market is experiencing a mix of positive and negative trends today
• Market Outlook for February 13, 2025: Key Cues to Watch

Sensex & Nifty Rebound as Inflation Cools; Market Awaits New Income Tax Bill

Sensex and Nifty Rebound as Cooling Inflation Lifts Investor Sentiment

Sensex and Nifty rebounded on February 13, driven by financials, metals, and oil & gas stocks, as cooling inflation boosted investor sentiment. After six consecutive losing sessions due to weak Q3 earnings, U.S. tariff concerns, and persistent FII outflows, the market saw a strong recovery.

Sensex had risen 556 points (0.7%) to 76,727, while the Nifty climbed 175 points (0.8%) to 23,220. Market breadth was positive, with 2,321 stocks advancing, 1,058 declining, and 103 remaining unchanged.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, oversold market conditions and anticipated positive developments from the Trump-Modi talks fueled the rally. Expectations of a reciprocal tariff agreement between the U.S. and India also contributed to the optimism.

India’s retail inflation dropped to a five-month low of 4.3% in January from 5.2% in December, primarily due to declining food prices. This raised hopes of potential rate cuts by the Reserve Bank of India (RBI), though higher-than-expected U.S. inflation tempered those expectations. The U.S. consumer price index increased by 0.5% in January, pushing annual inflation up to 3% from 2.9% in December, reducing the likelihood of near-term Federal Reserve rate cuts.

Sector-wise, all indices except Nifty IT traded in the green. Nifty Metal, Energy, Media, and Pharma each gained over 1%. Stocks such as Tata Steel, Bajaj Finance, Cipla, Bajaj Finserv, and JSW Steel advanced 2-4%, while Adani Enterprises, Hero MotoCorp, Infosys, L&T, and Nestle saw minor declines.

Jubilant Foodworks surged nearly 6% after posting strong Q3 FY25 results, whereas NATCO Pharma tumbled 19% following a 37% drop in net profit.

In the broader market, the BSE Midcap index rose over 1%, and the BSE Smallcap index gained 0.7%. Technical analysts suggested that if Nifty holds above 23,180, it could climb toward 23,260–23,500, with key support levels at 22,950 and 22,775.

Despite the positive momentum, concerns over continued FII selling remained, with foreign investors having offloaded ₹22,098 crore worth of Indian equities so far in February.

Global market sentiment remained cautious following Fed Chair Jerome Powell’s comments, which reinforced the ongoing battle against inflation, leading to declines in U.S. equities, a stronger dollar, and rising Treasury yields.

Indian stock market is experiencing a mix of positive and negative trends today. The key highlights include:

Sensex & Nifty Rebound

• Nifty Financial Index Surge: Up by 4% due to India’s retail inflation dropping to a five-month low.
• Nifty IT Index Dip: Down 2% as U.S. inflation came in higher than expected, reducing chances of Fed rate cuts.
• Stock Performances:
  • Ashok Leyland: Up 3% after 36% YoY profit surge.
  • HAL: Up 3% after 14% YoY profit rise.
  • Honasa Consumer: Up 8% despite flat PAT.
  • Kotak Bank: Up 2% as RBI lifts restrictions on new accounts and credit cards.
  • Natco Pharma: Down nearly 19% due to a 37% YoY profit drop.

Market Trends:

• Sensex Up 500 Points: A strong rebound after recent volatility.
• Billion-Dollar Stocks Crash: Some stocks down as much as 71% from their peaks—investors debating whether to buy the dip.
• Brokerages Bullish on Power Finance Corporation & Siemens: UBS expects a 50-60% upside.
• F&O Strategy: Short Iron Condor recommended for Nifty in a range-bound view.

Global Market Influence:

• U.S. Inflation Worries: Fed Chair Powell signals more work needed to curb inflation.
• Oil Prices Falling: Due to potential Ukraine peace deal easing supply concerns.
• Gold Prices Rising: Amid trade war fears and upcoming inflation data.

Market Outlook for February 13, 2025: Key Cues to Watch

Indian Markets Set for a Higher Opening: Sensex & Nifty Rebound

Sensex & Nifty Rebound: GIFT Nifty is trading at 23,136, indicating a positive start for the Indian equity markets, with the BSE Sensex and NSE Nifty 50 expected to open higher.

On Wednesday, the NSE Nifty 50 closed 26 points lower (-0.12%) at 23,045.25, while the BSE Sensex fell by 122.52 points (-0.16%) to 76,171.08.

Key Domestic and Global Market Cues for February 13

1. New Income Tax Bill

Finance Minister Nirmala Sitharaman is set to present the New Income Tax Bill in Parliament today, which aims to be more concise and easier to understand.

2. Asian Market Performance

Asian stock markets opened in positive territory despite weakness in the US markets:

• Nikkei 225: +1.14% at 39,416.08
• Asia Dow: +0.08% at 3,804.96
• Kospi (South Korea): +0.96%
• Shanghai Composite: -0.24% at 3,338.22
• Hang Seng (Hong Kong): +0.46% at 21,963.39

3. US Markets React to Inflation Data

US markets ended lower as consumer inflation rose more than expected in January, raising concerns over a delay in interest rate cuts:

• S&P 500: -0.27% at 6,051.97
• Dow Jones: -0.5% (-225.09 points) at 44,368.56
• Nasdaq Composite: +0.03% at 19,649.95

4. US Consumer Price Index (CPI) Inflation

• CPI increased 3% YoY in January, up from 2.9% in December.
• Inflation has risen from its September low of 2.4%, reducing hopes for near-term Federal Reserve rate cuts.

5. India’s Industrial Production (IIP) Growth

• December IIP: Grew 3.21%, down from 4.96% in November, mainly due to slower manufacturing growth.
• Q3 FY25 IIP: Improved to 3.9% from 2.7% in Q2.

6. India’s Retail Inflation

• January CPI: Moderated to 4.3%, down from 5.2% in December, driven by lower food inflation.
• Core inflation remains below 4% over the past year.

7. Currency and Forex Trends

• US Dollar Index (DXY): Down 0.02% at 107.92.
• Indian Rupee: Depreciated 0.05% to 86.88 per USD on February 12.

8. Crude Oil Prices

Oil prices edged lower:

• WTI Crude: Down 0.75% at $70.84 per barrel
• Brent Crude: Down 0.71% at $74.65 per barrel

9. Institutional Investment Flows

• Foreign Institutional Investors (FIIs): Net sellers of ₹4,969.30 crore
• Domestic Institutional Investors (DIIs): Net buyers of ₹5,929.24 crore on February 12

10. Gold Prices

• 24K Gold: Trading at ₹85,640 per 10 grams, down from a record high of ₹86,000.
• Gold Prices 1-Week Performance: +1.3%
• Gold Prices 1-Month Performance: +9.2%
• 22K Gold Rate: ₹78,503 per 10 grams

11. Key Corporate Earnings Today

Several companies, including Hindalco Industries, Deepak Nitrite, United Breweries, Ipca Laboratories, Allcargo Logistics, and others, will release their Q3 FY25 results today.

Cryptocurrency Market Update

• Bitcoin: Briefly dropped below $95,000 before recovering to $98,000.
• Ethereum: Remained stable.
• Solana: Fell 1%.
• XRP: Declined 0.8%.

Rising inflation figures may lead to delayed Fed rate cuts, impacting crypto market performance.