Benchmarks snap two-day gains amid weak global trend

Indian equity benchmarks snapped two-day gains and ended lower with losses of over half percent each on Wednesday, dragged down by Consumer Durables, Banking and TECK stocks amid weak trends in global markets. Besides, weak earnings numbers and persistent foreign fund outflows impacted market sentiments. Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 548.69 crore, according to exchange data.  Key indices opened negative and traded in a tight range with negative bias for most part of the session, as traders remained cautious with Hardeep Singh Puri, Minister for Petroleum and Natural Gas stating that no one can predict fuel prices because of the uncertainty that has prevailed in different parts of the world citing tensions in the Middle East. 

However, markets pared most of their initial losses in the middle of the session, taking support from President Droupadi Murmu’s statement that India is the fastest growing major economy and is likely to become the third largest economy soon. She said the Indian economy had been demonstrating resilience in the face of geopolitical challenges and the country's economy was likely to grow tenfold by 2047. But, markets failed to hold recovery and slipped into red terrain in late afternoon deals, as some pessimism remained among traders with credit rating agency, India Ratings and Research’s (Ind-Ra) report stating that a weakness in GDP growth is expected due to higher-than-expected inflation, a weakness in industrial growth, especially manufacturing activities, weak exports and slower growth in net taxes in 1QFY25. 

On the global front, European markets were trading lower as investors assessed a batch of mixed earnings and awaited regional growth data as well as the U.K. government's budget for direction. Asian markets settled mostly down on Wednesday as traders were cautious and reluctant to take positions ahead of the next week's U.S. presidential election and the US Fed's monetary policy decision. Concern about the tension in the Middle East also weighed on the markets.

Finally, the BSE Sensex fell 426.85 points or 0.53% to 79,942.18, and the CNX Nifty was down by 126.00 points or 0.51% to 24,340.85. 

The BSE Sensex touched high and low of 80,435.61 and 79,821.99 respectively. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.04%, while Small cap index was up by 1.54%.

The top gaining sectoral indices on the BSE were Industrials up by 1.04%, FMCG up by 0.95%, Basic Materials up by 0.71%, Capital Goods up by 0.58% and Telecom up by 0.26%, while Consumer Durables down by 1.21%, Bankex down by 1.04%, TECK down by 0.76%, IT down by 0.67% and Oil & Gas down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.92%, Indusind Bank up by 1.81%, Adani Ports & SEZ up by 1.69%, Larsen & Toubro up by 0.77% and ITC up by 0.72%. On the flip side, Infosys down by 2.01%, ICICI Bank down by 1.52%, Kotak Mahindra Bank down by 1.32%, Mahindra & Mahindra down by 1.28% and SBI down by 1.23% were the top losers.

Meanwhile, Hardeep Singh Puri, Minister for Petroleum and Natural Gas has said that no one can predict fuel prices because of the uncertainty that has prevailed in different parts of the world citing tensions in the Middle East. However, he hoped that the fuel prices would largely be stable, adding that there is no shortage of crude oil in the market. 

Union Minister said ‘No one can say with any certainty where the fuel prices would go because there are several global tension points. Especially the Middle East tension point, there is a

calibrated tension point. All the parties involved in this will see reason and they will make sure that there is no escalation beyond a point. If my assessment is correct then fuel prices will remain stable…There is no shortage of crude oil in the world…’

He added ‘The most important point to note is there is no shortage of crude oil in the world. Brazil produces 3.3 million barrels a day. They are going to bring another 400 thousand barrels a day additional on the market. There is widespread expectation that the United States, which had paused some time ago on new contracts, they are going to be adding another one million barrels a day to their 13 million barrels new. More oil is coming on the market from Guyana, Suriname, and several other countries, so there’s no shortage of oil. Now if there’s no shortage of oil, it stands to reason that prices should not go up’.

He cited global factors such as the war in the Middle East and voluntary cuts in oil production which are influencing the oil prices in the global market. The Union Minister said many countries such as Brazil, and Guyana among others are coming with their oil. Citing the stable prices in the last 3 years, the minister said that the government is taking every possible step to ensure stable oil prices.

The CNX Nifty traded in a range of 24,498.20 and 24,307.30. There were 19 stocks advancing against 31 stocks declining on the index. 

The top gainers on Nifty were Adani Enterprises up by 3.74%, Hero MotoCorp up by 3.18%, Tata Consumer Products up by 3.04%, Britannia Industries up by 2.03% and Maruti Suzuki up by 1.98%. On the flip side, Cipla down by 4.03%, Shriram Finance down by 2.35%, HDFC Life Insurance down by 2.34%, Trent down by 2.27% and Infosys down by 2.20% and were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 17.67 points or 0.21% to 8,201.94, France’s CAC fell 98.01 points or 1.3% to 7,413.10 and Germany’s DAX lost 145.1 points or 0.74% to 19,332.97.

Asian markets settled mostly down on Wednesday with caution ahead of key US economic data due this week and next week's US presidential election and the Fed's rate decision, while investors react to mixed earnings results from US technology giants like Alphabet and chipmaker AMD. Market sentiments weakened further after news that the European Union has decided to Increase tariffs on Chinese-built electric vehicles to as much as 45.3% at the end of its highest profile trade investigation that has divided Europe and prompted retaliation from Beijing. Chinese shares fell as investors awaited the details of a fiscal package that could address issues in local government debt and the property market. Although, Japanese shares gained ahead of Thursday's Bank of Japan interest rate decision.