Key indices end marginally lower on Wednesday

Indian equity benchmarks ended marginally in red on Wednesday as investor mindset turned gloomy with the tepid earnings and a knee jerk reaction from FIIs, which dragged the market sentiment. Foreign institutional investors (FIIs) offloaded shares worth Rs 3,978.61 crore on Tuesday, according to exchange data. After making a cautious start, key gauges managed to keep their heads above water for most part of the day as traders took some support with Reserve Bank of India deputy governor Michael Debabrata Patra’s statement that India’s GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend. Some support came as Minister of Petroleum and Natural Gas of India Hardeep Singh Puri hopes that global oil prices will come down despite geopolitical tensions as more supplies are coming into the market.

Sentiments remained positive in afternoon deals, as Finance Minister Nirmala Sitharaman emphasised the significant strides India has made in reducing inequality over the last decade. The minister noted that India’s policies have been pivotal in bridging inequality across various segments of society, with a comprehensive approach to financial inclusion, poverty alleviation, and infrastructure development. However, markets erased all of their initial gains in late afternoon deals and ended with minor cuts as traders got cautious after the International Monetary Fund (IMF) kept its growth forecasts for India unchanged at 7 per cent and 6.5 per cent for FY25 and FY26, respectively. It held that pent up demand accumulated during the pandemic has been exhausted as the economy “reconnects” with its potential growth. Some concern came with a labour ministry stating that retail inflation for farm workers and rural labourers increased to 6.36 per cent and 6.39 per cent, respectively, in September from 5.96 per cent and 6.08 per cent in August this year.  

On the global front, European markets were trading lower as traders grappled with Middle East tensions, a rising dollar and uncertainties over the upcoming U.S. presidential election. Asian markets settled mixed on Wednesday, tracking elevated U.S. treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and fears the U.S. may be heading toward fiscal collapse. Back home, on the sectoral front, jewellery stocks were in focus after the All India Gem and Jewellery Domestic Council (GJC) predicts a 30 percent surge in retail sales this festive season, despite anticipation of a slowdown in gold exports because of weak demand from the US. There were some reaction in textile and garment industry stocks with report that India's cotton production in 2024/25 is likely to fall by 7.4 per cent from a year ago to 30.2 million bales because of lower area and as excessive rainfall damaged the crop. 

Finally, the BSE Sensex fell 138.74 points or 0.17% to 80,081.98, and the CNX Nifty was down by 36.60 points or 0.15% to 24,435.50. 

The BSE Sensex touched high and low of 80,646.31 and 79,891.68 respectively. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.48%, while Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were IT up by 1.98%, TECK up by 1.25%, Telecom up by 0.41%, FMCG up by 0.27% and Consumer Durables up by 0.14%, while Power down by 1.39%, Capital Goods down by 1.17%, Healthcare down by 0.85%, Industrials down by 0.75% and Auto down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.95%, Tech Mahindra up by 2.28%, HCL Technologies up by 1.29%, TCS up by 1.27% and HDFC Bank up by 1.26%. On the flip side, Mahindra & Mahindra down by 3.23%, Sun Pharma down by 2.79%, Power Grid Corporation down by 1.86%, NTPC down by 1.74% and Adani Ports & SEZ down by 1.68% were the top losers.

Meanwhile, Reserve Bank of India deputy governor Michael Debabrata Patra has said that India’s GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend. He said ‘I do believe with all the strength of my conviction that India’s time has come’. 

He highlighted the country heads into its future with the youngest population in the world with a median age of 28 years. Unlike in many parts of the world, the working age population is growing - every sixth working age person is an Indian. He said that since independence in 1947, India’s growth path has undergone three structural shifts with trend growth, having risen to 7 per cent during 2002-2019. He stated after the severe contraction during the pandemic, a new growth trajectory averaging 8 per cent seems to be forming during 2021-24. India is now regarded as the fastest growing major economy in the world.

Already the fifth largest economy in terms of market exchange rates, it is poised to become the third largest economy by 2030, He said and added the country is already the third largest economy in terms of purchasing power parity. On inflation, he said it is projected to average 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26. Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 per cent in September on the back of a pickup in price momentum in some food items and adverse base effects inherent in year-on-year measurement.

The CNX Nifty traded in a range of 24,604.25 and 24,378.10. There were 18 stocks advancing against 32 stocks declining on the index. 

The top gainers on Nifty were Bajaj Finance up by 4.90%, Tech Mahindra up by 2.14%, Tata Consumer Products up by 1.78%, Bajaj Auto up by 1.75% and HDFC Bank up by 1.26%. On the flip side, Mahindra & Mahindra down by 3.22%, Sun Pharma down by 2.69%, Eicher Motors down by 2.07%, Shriram Finance down by 1.86% and Power Grid down by 1.84% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 35.56 points or 0.43% to 8,270.98, France’s CAC fell 59.39 points or 0.79% to 7,475.71 and Germany’s DAX lost 76 points or 0.39% to 19,345.91.

Asian markets settled mixed on Wednesday, tracking elevated US treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and concerns about the US fiscal deficit. Japanese shares declined as investors were reluctant to place major bets ahead of the country's upcoming lower house election results. Meanwhile, Chinese shares rose after reports emerged that the government may deploy as much as 2 trillion yuan (US$280 billion) of special treasury bonds to establish a stock market stabilization fund. Seoul shares gained with automakers and technology shares leading the rally, while the Korean won continued to decline against the dollar.