News Nook: Jan 1, 2025

Indian Sector Specific News:

A) BFSI:

1) IT Firms Expect Gradual Recovery in Q3 2025

• IT services may see modest growth due to stronger demand in BFSI, fewer project cancellations, shorter furloughs, and easing economic uncertainties.
• Digital investments, cloud adoption, and reduced election uncertainties in key markets are driving improved contract values compared to last year.
• Source: Financial Express

2) SEBI Launches Mutual Funds Lite Framework

• SEBI introduced the Mutual Funds Lite (MF Lite) framework for passively managed mutual fund schemes, focusing on simplified regulations for these funds.
• In Phase 1, the framework will apply to domestic equity passive funds with AUM of ₹5,000 crore or more as of December 31 each financial year.
• Source: Economic Times

3) Fabtech Technologies Gets SEBI Nod for IPO

• Fabtech Technologies received SEBI approval for an IPO comprising a fresh share sale of up to 1.2 crore shares, aiming to fund working capital, acquisitions, and corporate purposes.
• The Mumbai-based firm specializes in engineering solutions for pharmaceuticals, with a presence in 60+ countries and reported a 25.23% profit growth in FY24.
• Source: LiveMint

4) SEBI's Tightening Causes 16-Month Low in Equity F&O Volume

• Combined ADTV (Average Daily Turnover Value)  in the equity derivatives segment for BSE and NSE dropped to ₹280 trillion in December, a 36.56% fall from ₹442 trillion in November, due to regulatory curbs on speculative trading.
• The cash market turnover increased slightly by 4.4% in December, despite five months of decline, while all F&O categories showed consistent volume drops.
• Source: Moneycontrol

B) Automobile:

1) Exciting SUV Launches in January 2025

• Top brands like Maruti, Hyundai, Tata, Mahindra, and Mercedes are launching new SUVs, including electric ones like the Maruti e Vitara and Hyundai Creta EV, with long ranges and advanced features.
• Luxury SUVs like Mercedes' G 580 and Tata's Harrier EV are also debuting, highlighting a shift towards stylish, high-tech, and sustainable vehicles.
• Source: Trak 

C) Pharma:

1) Telangana's Big Pharma Boost: Key Developments

• Telangana government aims to attract pharma investments with Rs 36,000 crore secured in the past year, supporting over 140 projects, and introducing a new life sciences policy to streamline operations.
• Initiatives like "Pharma Villages," partnerships with major companies like Dr. Reddy’s, and collaborations for dengue vaccine production are set to create jobs and position the state as a pharma hub.
• Source: BioSpectrum India

D) Telecommunication:

1) UK Updates Travel Advisory for India: Satellite Phones and Equipment Restrictions

• The UK warns its nationals against using satellite phones in India without a license, as arrests have occurred for illegal possession of such devices.
• The advisory also highlights that prior permission is required for listening devices and powerful cameras or binoculars.
• Source: Business Standard

E) Agriculture:

1) Karnataka's Agricultural Economy Needs Policy Reset to Prevent Distress

• Karnataka's agricultural economy has faced challenges with recent declines in growth, highlighted by a -1.7% drop in 2022-23 and -5.6% in 2023-24, prompting the need for a policy stimulus.
• The state’s agricultural share in the economy has declined from 52.72% in 1970 to 12.58% in 2023, emphasizing the importance of revitalizing agricultural policies to avoid further distress, including rising farmer suicides.
• Source: TNIE

F) Energy:

1) ATF and Commercial LPG Prices Reduced in January

• Jet fuel (ATF) prices were cut by 1.5%, reducing costs by Rs 1,401.37 per kilolitre to Rs 90,455.47 in Delhi, reversing the upward trend from November and December.
• Commercial LPG prices were reduced by Rs 14.5 per 19-kg cylinder, while household cooking gas prices remain unchanged.
• Source: Economic Times

2) India's Core Sector Output Grows 4.3% in November

• India's core sector output rose 4.3% YoY in November, driven by strong construction activity, particularly cement and steel production.
• Key gains included a 13% surge in cement production and a 4.8% rise in steel output. While coal production grew by 7.5%, refinery product output slowed to 2.9%.
• Energy generation and fertilizer production showed improvements, with electricity generation up by 3.8% and fertilizer output increasing by 2%.
• Source: ET Online

G) IT:

1) IT Stocks Outlook for 2025

• IT stocks face challenges from AI advancements, but strong US economic recovery and growth in sectors like banking and consumer services could drive earnings growth in 2025.
• Despite some slowdown in deal wins, Goldman Sachs remains optimistic about the IT sector, while Investec has downgraded its outlook due to lower growth potential. 
• Source: Financial Express

2) Midcap IT Offers Higher Growth Potential Over Largecap Stocks

• Midcap IT stocks present better growth opportunities as largecaps face market saturation and high valuations, with investors seeking higher growth potential.
• Structural changes in consumer behavior and competition from private labels are challenging large FMCG companies, causing a slowdown despite their historical success.
• Source: Economic Times

H) FMCG:

1) Marico Expected to Outperform Peers in H2FY25

• Marico's stock has risen by 8% since mid-November, outperforming its peers, driven by expectations of strong growth in H2FY25, with sales projected to improve due to better performance in core brands like Saffola and Parachute.
• Nuvama Research forecasts Marico's growth to reach double digits in H2FY25, up from 8% in Q2, indicating strong performance compared to other FMCG companies.
• Source: Business Standard

Indian Economy and Government Initiatives:

• The economy is facing slowing growth, high inflation, and faltering private consumption, with Q2 GDP growth dropping to 5.4%, below expectations.
• The Union Budget 2025, to be presented on February 1, is seen as crucial for economic revival, with hopes for tax cuts, increased infrastructure spending, and support for consumption.
• The government is considering tax relief for individuals earning up to Rs 15 lakh annually and aims to boost infrastructure spending by 30%, potentially reaching Rs 18 lakh crore.
• Economists and industry experts urge measures to support exports, agriculture, employment, and capital expenditure to sustain growth momentum.

Indian Stock Market Update:

• Indian benchmark indices started 2025 positively, with the Sensex rising 0.47% to 78,507.41 and the Nifty gaining 0.41% to 23,742.90, driven by buying trends in auto and banking sectors. Sustainability of this trend depends on Q3 earnings growth.
• Gold prices surged by Rs 440 to Rs 79,390 per 10 grams, while silver also gained Rs 800, closing at Rs 90,500 per kg, driven by fresh buying and market anticipation for further cues.

Bonus Briefs:

• Asian stocks eased in cautious end-of-year trading, with Japan's Nikkei falling 0.96%, South Korea's KOSPI down 0.22%, and Hong Kong's Hang Seng rising 0.09%, as investors reduced expectations of significant U.S. rate cuts in 2025 and prepared for the incoming Trump administration.
• The U.S. dollar slipped against the Japanese yen, with the yen trading at 157.02 per dollar, while the Australian dollar remained near a two-year low amid poor domestic data, prompting expectations for further policy easing by the Reserve Bank of Australia.
• The U.S. dollar remains dominant in the forex market, with the CAD/USD pair under pressure due to Canadian political uncertainty, oil price declines, and a hawkish U.S. Federal Reserve, while other major currencies like the euro and yen also face challenges from respective central bank policies and economic conditions.