Markets Rise But On The Basis Of Signals That Seem Early
Markets snapped their five-day losing streak on Monday after the US ambassador to India Sergio Gore said that the US and India will engage in trade talks
On Episode 772 of The Core Report, financial journalist Govindraj Ethiraj talks to C S Vigneshwar, President at the Federation of Automobile Dealers Associations (FADA). We also feature an excerpt from our upcoming India Energy Week interview featuring Atanu Mukherjee, President and CEO at Dastur Energy.
SHOW NOTES
(00:00) Stories of the Day
(01:09) Markets rise but on the basis of signals that seem early
(03:56) Fresh uncertainty on Wall Street as the Trump administration launches pressure tactics on the US Federal Reserve Chair
(07:12) Why global energy markets surprised in 2025
(18:10) Will strong auto sales from last month sustain into 2026?
(28:05) Can business leaders take investment decisions purely on the basis of political promise?
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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.
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Good morning, it's Tuesday 13th of January and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital. This is a holiday shortened week as we've just learned with the 15th of January, that's the civic elections in Mumbai and therefore a market holiday.
And the top stories and themes for today…
The stock markets rise on Monday but on the basis of signals that seem a little unclear.
Why are global energy markets surprised in 2025?
Will strong auto sales from last month pull into 2026?
Can business leaders take investment decisions purely on the basis of political promise, the big question in Venezuela?
And fresh uncertainty on Wall Street as the Trump administration launches pressure tactic criminal action against the US Federal Reserve Chair.
A Reversal But…
The stock markets are driven by sentiment but even that must pass some scrutiny and feasibility. On Monday the markets were up which is of course welcome news in general but one reason attributed was the new US ambassador to India positive signalling on trade talks.
Now enough has been said and transpired on this issue for us to realise and accept that a India-US trade deal is only a done deal when it is a done deal. Now this is of course a larger question posed in the context of Wall Street as well. I'm talking about investor and investing sentiment where there clearly is not much institutional sway.
For instance the indices on Wall Street have risen when employment numbers fall and they spike when employment numbers rise because in the first case it's a sign that interest rates will be cut and the second it's a sign that the economy is doing well. Indian stock markets snapped their five-day losing streak on Monday after the US ambassador to India Sergio Gore said that the US and India will engage in trade talks as soon as Tuesday. The statement revived market sentiment instantly and the Sensex was up nearly 1100 points from the day's low and it finally closed up 302 points at 83,878 while the nifty 50 was up 107 points to 25,790.
The broader markets nifty mid-cap 100 were down and so was the nifty small cap index. We said yesterday the third quarter results of which TCS or data consultancy services is amongst the major ones will be out and may not have much of an impact on overall market sentiment and there are also varying expectations on the results themselves as a Bloomberg report points out. According to analysts quoted by Bloomberg Kodak institutional equities says there would be a 1.7% year-on-year increase in net profit of the nifty 50 index firms Motilal Oswal financial services says 8% and Alara securities says 5.8% and a compilation of estimates by Bloomberg itself indicates net income for nifty 50 index firms rose about 1.1% in the last quarter ending December 31st which is the slowest pace in five quarters.
There have also been some doubts as we've talked about on the core report on whether the recent GST cuts actually boosted consumption significantly. Now it's pretty clear auto companies have benefited as we will dive into a little more in a moment but consumer staples not so much. Speaking of taxes the government's direct tax collections after refunds were at about 18.37 lakh crore rupees between April 1st to January 11th of the year 25-26 according to data from the income tax department as compared to the corresponding period last year net direct tax collections were up 8.8% on year which is lower than the projection made in the budget.
The union budget for 26 has pegged net direct tax collections to rise 16% year on year according to a money control report which compiled this. On Wall Street stock futures fell on Monday the dollar weakened and gold prices jumped to a record more than that in a moment after federal reserve chair Jerome Powell said President Trump was seeking to press the central bank into cutting interest rates with the threat of a criminal indictment. More on gold in a moment but the market was point to reinforce concern about Fed independence and the strength of U.S. institutions more broadly according to the Wall Street Journal.
Prosecutors are going after Powell over his testimony last summer about the central bank's renovations that's physical renovations in the building and Powell called the investigation a pretext for Trump's campaign to end the central bank's independence which the president denied on Sunday. Nasdaq futures were down on Monday morning and the dollar depreciated against currencies including the euro British pound and Swiss franc and yields on longer dated treasuries rose according to the Wall Street Journal which says that when a country's currency and bond yields go in opposite directions it's typically a sign of nervousness because higher yields should draw in overseas money. Meanwhile gold and silver which matter more to us than stocks on Wall Street please relatively climbed to record highs.
Gold hit $4,600 an ounce while silver hit $85. Back home Tata consultancy services or TCS which is India's largest software services firm posted a bigger than expected third quarter revenue figure on Monday thanks also to artificial intelligence-led demand. Consolidated revenue was up about 4.9 percent to about 67,000 crore rupees or about 7.4 billion dollars for the third quarter and this was ahead of analyst expectations of about 66,600 crore rupees according to data compiled by LSEG.
Net profit was of ever down 14 to about 10,657 rupees which the company attributed to restructuring costs associated with layoffs announced in 2025. Net profit was also below analyst expectations of about 13,000 crores. On the other hand headcount was down by about 11,151 employees on a net basis for the same December quarter even as the company continued with workforce restructuring and role realignment.
So TCS's total employee base is now at about 582,000 as compared to 593,000 in the previous quarter.
Inflation Is Up
India's annual retail inflation was up to 1.33 percent in December from 0.7 percent in November.
According to data released by the Ministry of Statistics and Programme Implementation on Monday a Reuters poll had projected retail inflation at 1.5 percent. Analysts told Reuters that CPI inflation was a downside surprise versus market expectations for the month but upside surprise with respect to Reserve Bank's 0.6 percent forecast for the quarter of 2025. They also said that they do not expect more rate cuts but certainly more liquidity infusion given that base money growth has weakened much below nominal GDP growth.
One reason for headline inflation and food inflation rising in December is because of an increase in prices of items across personal care, vegetables, meat and fish, eggs, spices, pulses and products according to various reports.
The Oil Resilience
Oil prices dipped on Monday after Iran said it had totally controlled following the biggest anti-government demonstrations in years, easing some concerns over supply from the Organisation of Petroleum Exporting Countries or OPEC producer while investors also weighed efforts to resume oil exports from Venezuela according to a Reuters report which added that Brent crude futures were down slightly to about $63.19 while West Texas Intermediate was at about $58.93. Both these benchmarks had risen more than 3 percent last week and that was the highest since October after the increased demonstrations and violence in Iran.
Iran's foreign minister said that the situation there was under total control and US President Donald Trump warned of possible military intervention to those protests rather the crackdown on the protests. Trump is expected to meet senior advisors on Tuesday to discuss options for Iran according to officials Reuters spoke to. Elsewhere Venezuela is expected to resume oil exports soon following the ouster of President Nicolas Maduro.
As Trump said last week the government in Caracas is set to turn over as much as 50 million barrels of sanctioned oil to the United States according to a Reuters report. Meanwhile in our continuing series on the India Energy Week 2026, the question what were some of the big shifts we saw in the last year and what could influence prices in the coming year and what are overall energy trends looking like particularly in oil and gas. I spoke with Atanu Mukherjee, President and CEO of Dastur Energy, a leading Texas and Kolkata based energy consulting firm and I began by asking him how he was seeing the India energy landscape shift and change right now.
INTERVIEW TRANSCRIPT
Atanu Mukherjee: So I think, you know, like I have always observed and said is that increasingly because of the dynamics of different kinds of elements of transportation systems and use of different kinds of commodities for general social use, we are seeing a movement more towards what I call as conversion rather than combustion, right? And so, yes, you will have combustion and that will continue to grow, but I think there'll also be a corresponding demand side and a supply side corresponding balancing of increasing conversion, right, to petrochemicals. So refining will be more integrated, right, as we move forward in terms of combining combustion fuels, right, combustion commodities as well as conversion commodities, which is basically plastics or petrochemicals.
And I think the better we integrate that, the more efficient you are in terms of production routes and optimising the production across different categories. And I think that the movement of refineries is going to be, and that's what you're seeing also, that is more of how do I combine combustion products with conversion products with the right kind of crude slate so that I am optimised by GRMs, so the refining margins, and also supply to the market, which is evolving in both the directions, right? And so I think that's what, you know, I guess what you're referring to and that's what is happening increasingly in refineries and especially so in heavy refineries, which India is, you know, it's a big heavy refinery base and which will continue to move in that direction.
And I think it's very healthy for the nation.
Govindraj Ethiraj: Right. If I can come back to supply for a moment, you know, we touched upon geopolitical shifts, including as triggered by the Russian invasion of Ukraine, America's attack on Venezuela and taking over again, in a manner of speaking, the oil production there. What is going to change because of all of this?
So, and let me supplement that for countries like India, for example, let's say we were looking at a balance of thrust on renewables plus traditional energy, that's oil and gas, crude, and the geopolitical shifts could cause or seem to be causing some shift in strategy. And perhaps that's happening in other parts of the world too. I would be keen to know how you are seeing this.
Atanu Mukherjee: You know, if you look at it as we see it, as I see it, the geopolitical events, if you look at it in the specifically in the crude markets or the oil markets have not created that kind of volatility that usually it creates, right? If you look at it, it's tempered down. A lot of geopolitical events have been happening, but it's not really cleared the volatility that we expect out of geopolitical situations.
That's because the geopolitical events have found a way, have made the suppliers and the demand side consumers to find a way to reroute and reorient supplies into demand centres. You know, I would say bypassing, but by looking at ways around what do you call these geopolitical barriers that may emerge, right? And that has capped volatility to a large degree.
And therefore the trading mechanisms, the instruments and the logistics, right, around it become of critical importance, right? In terms of maintaining the supply demand balance, even in the face of geopolitical shifts, right? That are happening, which was not the case earlier.
This is very, I'm saying unique, but this is different, right? This I think that has kind of like synthesised into better logistical efficiency, better reroutings of supply, better able to match supply with demand in different zones and better able to execute different kinds of mechanisms, instruments of trade, which allow that to do so. So that I think will evolve and keep growing.
And I think that volatility will be probably less. That's one. Having said that, I think certainly yes, you know, renewables and other energy sources are a complement to a lot of what you call these areas, especially in power generation.
And so renewables will help, but renewables will not be the saviour or will not be something which can significantly substitute, right? The role of crude and gas in power generation. And of course in commodity production is very, very difficult, right?
So it'll have a limited impact, I believe, right? In terms of how it is able to substitute these other traditional commodities or energy commodities, but will certainly have some effect, right? But I think more importantly, though, I think it's important to understand that if you increase renewables, and this is the counterfactual, the likelihood or the need for any region or nation, let's say for India, to be able to continue with renewables in a reliable, affordable manner demands more amount of firming fuel resources, like gas, for example.
So you might say that I will substitute renewables. Not really. You will, but for doing so, you will require more gas, right?
Because you've got farming resources. You require more coal for that matter, right? Because farming resources and to keep it affordable and reliable.
So yes, renewable has got an impact, but not to the degree that people think about that it's a substitutional resource. It's going to substitute, right? Crude or gas and other what you call similar commodities at substantial levels.
Govindraj Ethiraj: Right. If I were to go a little deeper, you know, on the demand side, again, in India now, where you have been working on several projects over the years, how are you seeing some of the technology inputs or innovations or shifts, which could influence or affect or change things around when it comes to energy demand at a broad level, as well as some of the specific areas that you're familiar with?
Atanu Mukherjee: Right. So I think one of the biggest areas that I think of is that, you know, gas is a very, very important energy commodity for any application around the world, including India. But then again, different nations, different countries have different price sensitivities of gas and India doesn't have gas.
So we have to import LNG, but if you look at LNG, you know, LNG is a good insurance policy, right? For a fuel. Let me just clarify that, you know, we have about 50, 55 million tonnes of LNG capacity.
If you look at the capacity utilisation of the LNG, what you call gas import infrastructure that we got, it's probably about 35, 40%. You say, what? That's like way too low.
Yes, that is correct because the price and the economics of LNG, right? For general application doesn't permit it to be absorbed in larger volumes, but during situations that arise, which may be a drought or it may be a heat wave, or it may be a geopolitical situation, which demands, right? A lot of LNG to be gas to be gotten in.
I would require the LNG capacity at that point of time. So LNG capacity to me is an insurance. It's a flexible option that I create in India, which, you know, weathers me through the storms, right?
Which I want. That being said, right? We must be able to complement things in technology space to be able to create fields, which are similar to gas.
And I keep on saying that, you know, India's biggest endowment is coal, right? And so if you can convert coal rather than combust coal into gas, which is very, very possible, right? At economics, which makes sense for the coals that we have in India, it can complement, supplement, and substitute a lot of the LNG import requirements that we might have, right?
Or the gas requirements that we might have to import through gasification technology. So that's one direction that we think the government is embarked upon for some time. And we continue to support that.
And we think that's a big thing. So you can have, you know, synthetic natural gas as one mechanism to what you call drive, you know, gas use forward. So that's one area we think is very important.
The second, I think, has got to do with, you know, the whole demand for power, the demand side of power. If you look at power, it's not just the traditional demand of power by you and me, consumers, but demand for power with the onset of artificial intelligence, you know, these data centres, hyperscalers. So if you might know, these things have started happening, you know, $15 billion of investment by Google, right?
Into entrepreneurs by that area for hyperscalers. Same thing with Microsoft, you know, these are very large, large loads, right? And you cannot supply that kind of load with the traditional grids that you have got, leave alone just by renewables.
So you have to engineer what we call as power sources, the power grids, which are specifically aligned towards supporting these kinds of data centres, which are very hungry consumers, very high volatile concentrated demand. And so I would think that, and we're working on that, is how do you engineer, right? And design such artificial intelligence corridors, power corridors, which will be a combination of generation of power from, you know, obviously, you know, coal, probably coal gasification based gas, probably outside gas and renewables combined together along with storage.
So that's another technology area that we see that is going to evolve and evolving as we see, we see that happening in the United States very, very strongly. We see that happening in China to some degree, and it will happen in India for sure. So that's another demand side and technology development, which I think will have a, you know, big impact, right?
In terms of the energy and the demand side and the supply side of the economics of the whole thing.
Auto Sales
A GST cut income tax rebates in the last union budget and a 125 point repo rate cut by the reserve bank continue to help push auto sales in December but off the lot the GST or goods and services tax rate cut must have helped the most. Now for all of 2025 retail sales of vehicles across category were up about 7.7 percent with GST 2.0 as it's called obviously helping according to data from the Federation of Automobile Dealers Association. Passenger vehicle sales were up about 9.7 in 2025 while two-wheeler sales were up 7.2 percent.
Back to December now brands like Maruti, Suzuki, Mahindra and Toyota, Kirloska Motor reported a 20 percent year-on-year growth for the month of December. My colleague Shubhangi Bhatia caught up with CS Vigneshwar, President of FADA and began by asking him for his key takeaways and broad trends from the December numbers and full year as well as his outlook for the industry in the coming months.
INTERVIEW TRANSCRIPT
C S Vigneshwar: 2025 ended on a great note. December was phenomenal. We had great growth.
For example, if I can just read out, the two-wheeler in December grew at about 9.5 percent, passenger vehicles by over 27 percent, CVs 27 again, and three-wheelers at 36, and tractors at about 16. The construction equipment is only a segment which we grew at about 18 percent. Otherwise, December was an absolute hangama.
Another point of view is also that we talked about from FADA that 2025 was a tale of two different seasons, the first half and the second. The first half was very tepid, that single-digit growths, and the second half, thanks to the last quarter. The last quarter of the calendar year was phenomenal because of the GST 2.0 effect. It was fantastic. It was quite breakneck. Because of that, the overall auto retail foreset about 7.71 percent for the calendar year, which was about 2.81 crore vehicles. It was phenomenal. It was one of those years which GST really turned it around for us. I think even in 2026, apart from the fact that there's a good run-up, there's a good pace, which we built up in the last three months, we foresee it to continue this year.
Not only the pace is there, but also the sentiment in the market. We have our monthly survey with our dealers. More than 77 percent of them have actually confirmed that this year is going to be a decent growth year.
The market liquidity is quite good. The customer sentiment is quite good. So we are hoping to have a very, very good run this year too.
Shubhangi Bhatia: Could you give us some numbers on the outlook that you're seeing for this ongoing last quarter of the fiscal and probably the next fiscal as well?
C S Vigneshwar: The last quarter of the fiscal, I really don't have data for that right now as we speak. But that pretty much saved the year. As I told you, the first half was single-digit, lower single-digit growth.
We didn't expect much growth at all. And even towards the middle of the year, we were not too optimistic about it. We were cautious.
This year, perhaps we'll be having growth of probably even lower double digits for two-wheelers and probably very high single digits for passenger vehicles. The commercial vehicle space, which has been struggling in the last few years, should also pick up because there's a lot of positivity even in the last few months in the commercial vehicle segment. Whether it's heavy vehicles or light commercial vehicles, I think across the segment, the commercial vehicles also has improved.
Shubhangi Bhatia: All right. We've also seen the rural markets doing good. Could you give us insights on why and what is driving that demand in the rural market?
C S Vigneshwar: The Bharat of India, so to speak, has been supporting the auto retail segment and punching above its weight in the last few years. It has continued to do that in 2025. Some of the reasons would be that the minimum support prices have been quite generous from the government.
We had good monsoons and therefore we also had great harvests in India. So all these things are quite buoyant in the rural segment and we've seen rural segment outpace the urban segment in terms of growth rates. In certain markets, in certain industries, we've also seen that the participation, the rural markets have actually gone past 50% of the markets compared to the urban.
Urban, we've been having some kind of headwinds because we have noticed that the cost of the vehicle, now it is less of a concern, but it does exist. The cost of the vehicles have far outpaced the salaries, so the incomes. One of the reasons cost of the vehicles have outpaced is the fact that a lot of safety norms and a lot of environment norms were built into these vehicles and therefore it took the cost up.
But of course the GST has corrected a lot of it, but the pain does remain in terms of urban incomes versus costs of vehicles.
Shubhangi Bhatia: All right, so now one interesting trend is also that small cars which is led by Maruti Suzuki, you know, they have staged a notable comeback. Do you see this turnaround sustaining into the next fiscal and beyond or is it largely a one-off response to the recent policy changes?
C S Vigneshwar: I think this will continue because some of these cars, especially in the entry-level segment which is extremely sensitive in terms of pricing, did get affected because of the increase in prices of these vehicles. Of course, there is inflationary pressures which also increase the cost of vehicles, but along with it, environmental norms and safety norms, which are extremely important, were also adding sandbagging the market. But when you look at it, when you add these to a 20 lakh vehicle, in terms of percentage of increase in prices is a lot lesser when you're adding it to a 5 lakh or 6 lakh or 7 lakh vehicle.
That clearly affected, but thanks to the GST reforms here, I need to be very clear that I'm really grateful to all the state governments and the central government to actually come together, agree on something. And I think whatever they agreed on is brilliant because they did bring the price of these vehicles down and certain entry-level models of some manufacturers, the pricing went to 2019 pricing, which is absolutely fantastic. It's not easy to do that.
Such reduction in price can only be done by reduction in taxes. But some manufacturers, apart from passing on the benefit of the reduction in taxes, also contributed by reducing prices further, which really helped the entry-level segments.
Shubhangi Bhatia: And talking of the entry-level segment in the two wheelers, we have also seen the commuter segment, motorcycles, 100cc, not really picking up the demand for the past one or two years. I know it has grown after GST. Do you see it sustaining into the next fiscal as well?
C S Vigneshwar: Given the brilliant pricing available right now, I think it will sustain itself into the next fiscal because see, one of the markets which is competing against new cars, but also the old cars, in this case, the old two wheelers. But when you are able to get a new vehicle at such incredible costs, I think it's up to the customer to decide whether to go for an older premium segment vehicle or a newer, smaller CC vehicle. Given the current conditions, I think we are seeing that the newer vehicles are being preferred by customers, although it could be a smaller CC because they have company warranties and other advantages with a new vehicle.
So the entry-level segments in two wheelers have been doing well in the last quarter and hopefully it even does better this year.
Shubhangi Bhatia: And from what your dealers are seeing on the ground, where is the customer preference currently skewed between hybrids and electric vehicles?
C S Vigneshwar: So when we look at it, it's a great question because we need to look holistically at this market of alternative fuel. By alternative fuel, I'm calling anything which is pure diesel and pure petrol. Apart from this, anything else would be an alternative fuel.
It can be CNG, LPG, hybrids, and EVs. EVs probably ended at about four and a half percent market share last year, which is a great improvement over 2023-24 because for both those years, EVs ended at about 2.5 percent market share, while it grew to 4.5 percent last year, which is fantastic. Hybrids were at about 8 percent and CNG, LPG were at about 21 percent.
So combined together, they make up right now one-third of the Indian market in terms of fuel-wise data. And this I see only growing with more vehicles coming in, more manufacturers coming in with more variants. Of course, EV has been the story for the last few years.
A lot of manufacturers are bringing out more options in EVs. We're also going to see a lot of manufacturers bring out a lot more hybrids. And of course, CNG is something which also a lot of manufacturers are concentrating on.
So we are talking about just going past 50 percent, all of them combined, in the next few years, which is great. And again, it's horses for courses. We need to have this technology, give offer to the customer, and ultimately let the customer decide on what suits the customer's usage best.
So each of these technologies have their advantages. Today, data is available very freely, where the customers can make a choice according to the customer's driving patterns and usage patterns.
Shubhangi Bhatia: Thank you so much for joining us today. And thanks a lot for your time, sir.
C S Vigneshwar: Thank you so much. I really appreciate it.
Maruti Adds Capacity
Maruti Suzuki, India's largest car maker, said on Monday that its new car manufacturing plant, also its fifth, will be located at Khurraj Industrial Estate in Gujarat's Gandhinagar district. It said the investment required for this plant will be finalised and approved by its directors. The cost of land acquisition, development of preparatory activities approved by the board is about 4,960 crore rupees, it said.
Maruti in Jan 2024 had announced that it would set up a new manufacturing plant in Gujarat with a capacity target of 1 million units and a total investment of about 35,000 crores and was expected to start operations in about three to four years.
Taking A Trump Call
It's a very fundamental question. On the basis of what, do business leaders take investment decisions for which they are answerable to their shareholders and stakeholders even in high-risk endeavours like drilling for oil. U.S. President Donald Trump on Sunday said he might block ExxonMobil from investing in Venezuela after the oil major CEO called the country uninvestable during a White House meeting last week. Exxon CEO Dan Woods told Trump that Venezuela would need to change its laws before it could be an attractive investment opportunity during that high-profile meeting on Friday with at least 17 other oil executives, according to a Reuters report.
Trump had urged the group to spend about $100 billion to revitalise Venezuela's oil industry in a meeting less than a week after American forces captured and extracted Venezuelan president from power in an overnight raid. Trump told reporters on Air Force One on his way back to Washington on Sunday that he didn't like Exxon's response and he would be probably inclined to keep Exxon out. They're playing too cute, he said.
Of course, things may not pan out that way depending on how Exxon takes things forward but remember this is a tricky proposition. Exxon, ConocoPhillips, and Chevron, which are the three largest U.S. oil producers, were for decades the most prominent partners of Venezuela's state oil company, that's the PDVSA. Some years ago, late president Hugo Chavez nationalised the Venezuelan oil industry, that's between 2004 and 2007, while Chevron negotiated deals to partner with PDVSA.
ConocoPhillips and Exxon left the country and filed for prominent arbitration cases. Venezuela now owes about $13 billion collectively to ConocoPhillips and Exxon for those expropriations. So Woods told Trump on Friday, according to the Reuters report, that we've had our assets seized there twice and so you can imagine to re-enter the third time will require some pretty significant changes from what we've historically seen here.
Trump then said on Friday that his administration would decide which firms would be allowed to operate in the South American country. "You're dealing with us directly, you're not dealing with Venezuela at all, we don't want you to deal with Venezuela,” he said.
