Key indices end lower for 2nd consecutive session

Indian equity benchmarks ended lower for the second consecutive session on Wednesday due to weak trend in global markets. Markets made a cautious start and soon slipped into red as traders got anxious with Reserve Bank of India (RBI) data showing that India’s outward foreign direct investment (FDI) commitments declined by about $900 million to $3.72 billion in September 2024, compared to $4.63 billion in September 2023. Some cautiousness also came as SBI research stated that the soaring figures of retail inflation in September could force the Reserve Bank of India (RBI) to continue with neutral stance for a longer duration, and added that first rate cut could be based on growth, and need not be inflation. The research stated on the rationale that if inflation remains sketchy in the coming months, the apex bank will consider growth as the criteria for rate cut.

Key gauges extended their losses in afternoon session amid unabated foreign fund outflows. Foreign Institutional Investors (FIIs) sold equities worth Rs 1,748.71 crore on Tuesday, continuing a month-long selling spree. However, markets pared most of their losses in late afternoon deals as traders took some support with report that Reserve Bank of India (RBI) deputy governor Michael Debabrata Patra has said the retail inflation is projected to average 4.5 per cent in 2024-25 and align with the target on a durable basis by 2025-26. Some support also came with private report stated that India’s trade deficit narrowed to a five-month low of $20.8 billion in September from $29.7 billion a month back as merchandise export growth turned positive for the first time in three months. However, markets failed to hold recovery and added some losses towards the end of the session, as investors mostly resorted to selective profit-taking, particularly in IT, Auto and TECK stocks.

On the global front, European markets were trading mostly in red as investors digested a slew of disappointing earnings updates and awaited a European Central Bank policy meeting on Thursday for directional cues. Asian markets settled mostly down on Wednesday due to lingering Middle East tensions, shifting U.S. rate cut expectations and reports suggesting that the U.S. is mulling a cap on export licenses for AI chips to specific countries. 

Back home, on the sectoral front, aviation stocks were in watch as the Directorate General of Civil Aviation (DGCA) said domestic carriers flew 1.30 crore passengers in September, which is 6.38 per cent higher compared to the year-ago period. In September last year, airlines carried 1.22 crore passengers. Telecom stocks also were in limelight as communications minister Jyotiraditya Scindia said India is resolved to lead the world in 6G, and termed the telecom sector of the country as aggressive and ambitious. He added said with the Bharat 6G Alliance, India hopes to contribute at least 10 per cent patents to 6G standardisation. 

Finally, the BSE Sensex declined 318.76 points or 0.39% to 81,501.36, and the CNX Nifty was down by 86.05 points or 0.34% to 24,971.30. 

The BSE Sensex touched high and low of 81,932.15 and 81,358.26 respectively. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.10%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Telecom up by 0.91%, Realty up by 0.64%, Energy up by 0.25%, Oil & Gas up by 0.20% and Basic Materials up by 0.10%, while IT down by 1.17%, Auto down by 0.97%, TECK down by 0.76%, Consumer discretionary down by 0.69% and Utilities down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 0.92%, Bharti Airtel up by 0.91%, Reliance Industries up by 0.75%, Asian Paints up by 0.37% and SBI up by 0.16%. On the flip side, Mahindra & Mahindra down by 2.87%, Infosys down by 2.05%, Adani Ports &SEZ down by 1.20%, JSW Steel down by 1.13% and Tata Motors down by 1.13% were the top losers.

Meanwhile, terming the telecom sector of the country as 'aggressive' and 'ambitious', Communications minister Jyotiraditya Scindia has said that India is resolved to lead the world in 6G. He said with the Bharat 6G Alliance, India hopes to contribute at least 10 per cent patents to 6G standardisation. He asserted ‘It is our belief and our commitment -- India followed the world in 4G, we marched with the world in 5G, but we shall lead the world in 6G.’

With the fastest 5G rollout in India wherein 98 per cent of districts and 90 per cent of all villages were covered in a span of just 21 months, the minister said it is the government’s effort of not just embracing, but bracing the country to become the first-mover in 6G technology.

He noted that the recent changes to the Telecommunications Act 2023 have been designed in such a way so as to modernise India's telecom framework, drawing light upon hitherto unaddressed areas such as the high potential sector of satellite communications, addressing the challenges of the digital era, the most important being cyber security. He said ‘the telecom sector, much like other growth-critical sectors in India, is aggressive, is ambitious, and its outlook in our journey from Amrit Kaal to Shatabdi Kaal is to lead the world.’

The CNX Nifty traded in a range of 25,093.40 and 24,908.45. There were 16 stocks advancing against 34 stocks declining on the index. 

The top gainers on Nifty were HDFC Life Insurance up by 1.79%, Dr. Reddy's Lab up by 1.34%, Grasim Industries up by 1.05%, HDFC Bank up by 0.97% and Bajaj Auto up by 0.88%. On the flip side, Trent down by 3.61%, Mahindra & Mahindra down by 2.78%, Infosys down by 2.10%, Hero MotoCorp down by 2.10% and Adani Ports &SEZ down by 1.39% were the top losers.

European markets were trading mostly in red; France’s CAC fell 43.50 points or 0.58% to 7,478.47 and Germany’s DAX was down by 59.39 points or 0.31% to 19,426.80, while UK’s FTSE 100 was up by 45.97 points or 0.55% to 8,295.25.

Asian markets settled mostly down on Wednesday tracking Wall Street’s fall overnight after data showed business activity at manufacturing firms in New York State contracted unexpectedly in October. Market sentiments weakened further by lingering geopolitical tensions in the Middle East and reports suggesting that the US government is mulling a cap on export licenses for AI chips to specific countries. Meanwhile investors are focusing to upcoming US economic data that will influence expectations about the US Federal Reserve's interest rate cuts. The Atlanta Fed's Raphael Bostic said he penciled in just one more rate cut of 25 basis points this year, while San Francisco Fed's Mary Daly said one or two cuts in 2024 would be reasonable. Chinese shares gained marginally as China's housing minister set to hold a press briefing on Thursday that will likely provide more details of measures to promote the steady and healthy development of the property sector. Japanese shares declined on tracking chip shares sell-off after ASML Holding warned of a slower-than-expected recovery for some semiconductor end-markets after orders came in below expectations for the third quarter as chip makers held back spending on key production equipment.