Benchmarks erase gains to settle marginally in red

Indian equity benchmarks erased all their gains to settle the day marginally in red on Wednesday, as late selling in index major like ITC, Nestle and Hindustan Unilever offset the positive sentiment from the RBI's monetary policy review. After a firm opening, the indices were seen compounding their gains for the major part of the day as the Reserve Bank of India (RBI) left Repo rate and CRR unchanged at 6.5% and 4.5% respectively, in line with street expectations. It changed its stance to ‘neutral’. The central bank left CPI Inflation projection for FY25 unchanged at 4.5%. It also left GDP growth forecast for FY25 was unchanged at 7.2%. Traders took support with Oil Minister Hardeep Singh Puri’s statement that India will be able to navigate through any oil supply shock that may result from the potential widening of the conflict in the Middle East. He said while India, the world's third largest oil importing and consuming nation, is more than 85 per cent dependent on imports to meet its crude oil needs, the situation is manageable and there is no need for concern.

Sentiments remained positive in afternoon deals, as Union Finance Minister Nirmala Sitharaman has commended Indian financial sector regulators for doing a ‘world-class job’ and bringing greater transparency into the system. Underlining that she is not against questioning or critiquing regulators, Sitharaman said there is a need to be ‘extremely conscious’ about contributions made by them as well. Some support came as the commerce ministry's arm DGFT has clarified that registration-cum-membership certificate is not mandatory for exporters to seek benefits under schemes like duty drawback and remission of state levies. Besides, the government notified rules easing the export of 36 items including software and technology from an Indian parent company to its foreign subsidiary in 41 countries, under a policy for dual-use products. However, in the final minutes of trade, key gauges erased gains made earlier in the day and closed with minor losses as investors turned their focus on upcoming inflation data and corporate earnings.  

On the global front, European markets were trading higher after reports emerged that China's finance ministry will convene a press conference on Saturday to introduce work on strengthening countercyclical adjustments of fiscal policy and promoting economic development. Asian markets ended mixed on Wednesday as China's stimulus rally fizzled out, the conflict in the Middle East persisted and investors awaited Federal Reserve meeting minutes as well as U.S. inflation data for interest rate clues. 

Back home, on the sectoral front, stocks related to education sector were in focus as a recent analysis by Crisil Ratings showed that schools and colleges in India are expected to report a 12 to 14 per cent rise in their revenue this financial year. This revenue growth is driven by higher enrolments, increased demand for new courses, and the opportunity for upward fee revisions. Stocks related to Gem and Jewellery also were in watch as the Gem and Jewellery Export Promotion Council (GJEPC) of India said the International Gem and Jewellery Show (IGJS) Dubai, which commenced on October 8, is expected to boost exports to the UAE by 20 per cent in this calendar year. 

Finally, the BSE Sensex fell 167.71 points or 0.21% to 81,467.10, and the CNX Nifty was down by 31.20 points or 0.12% to 24,981.95.      

The BSE Sensex touched high and low of 82,319.21 and 81,342.89 respectively. There were 15 stocks advancing against 15 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 1.06%, while Small cap index was up by 1.21%.

The top gaining sectoral indices on the BSE were Realty up by 2.21%, Healthcare up by 1.68%, Power up by 1.18%, Consumer Disc up by 1.09% and Industrials up by 0.96%, while FMCG down by 1.31%, Energy down by 0.78%, Oil & Gas down by 0.64% and Metal down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.10%, SBI up by 1.91%, Tech Mahindra up by 1.86%, Maruti Suzuki up by 1.80% and Bajaj Finserv up by 1.65%. On the flip side, ITC down by 3.17%, Nestle down by 2.51%, Hindustan Unilever down by 1.68%, Reliance Industries down by 1.64% and Indusind Bank down by 1.34% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has commended Indian financial sector regulators for doing a ‘world-class job’ and bringing greater transparency into the system. Underlining that she is not against questioning or critiquing regulators, Sitharaman said there is a need to be ‘extremely conscious’ about contributions made by them as well.

About competitive populism through freebie schemes, Sitharaman said there is a need to look at a state's financial ability to bear the burden of announcements for the welfare of the poor. She said that in some cases committed expenditure is going up to 80 per cent, whereas the development needs are being overlooked. She said that spending by the state governments on political promises should be based on the fiscal capacity of the concerned state. Making it clear that she was not against welfare measures, Sitharaman said ‘We cannot deny help to the poor for moving out of poverty’.

The minister thanked the digital investment platforms for doing a ‘great service’ for the country, which has helped ensure that middle-class Indians can take the risk by entering markets rather than comfortably sit by deploying the resources in low paying accounts. She also gave out a slew of data supporting the argument, including the surge in the number of demat accounts to 17.1 crore as of September 2024 from 2.31 crore in 2014. Sitharaman also exhorted banks to ensure that they do not practice either overlending, which can lead to asset quality stress or underlending, which can impact their profitability, underlining that the health of the banks actually determines the health of the economy and the financial health of households.

The CNX Nifty traded in a range of 25,234.05 and 24,947.70. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.58%, Trent up by 2.34%, Tata Motors up by 2.09%, SBI up by 1.84% and Tech Mahindra up by 1.77%. On the flip side, ITC down by 3.04%, Nestle down by 2.44%, ONGC down by 1.69%, Reliance Industries down by 1.67% and Hindustan Unilever down by 1.45% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 31.94 points or 0.39% to 8,222.55, France’s CAC rose 13.22 points or 0.18% to 7,534.54 and Germany’s DAX gained 28.32 points or 0.15% to 19,094.79.

Asian markets ended mixed on Wednesday ahead of US Federal Reserve’s meeting minutes as well as US inflation data for further clues on interest rate cuts, while persisting conflict in the Middle East has also weighed on market sentiments. Chinese shares dropped on severe selling pressure after officials failed to boost confidence in stimulus plans aimed at reviving the economy. Hong Kong shares fell after reports that China's finance ministry is set to hold a media briefing on fiscal policy on Saturday. Meanwhile, Japanese shares advanced by tracking Wall Street gains overnight and as tech shares outperforming due to easing of US Treasury yields.