Selling pressure intensifies over Dalal Street

A selling pressure intensified over the Dalal Street during late afternoon deals, with IT and TECK falling the most, despite positive cues from European markets, as solid U.S. economic data along with an uptick in inflation supported recent comments by many Fed officials that there's no rush to cut rates. Traders overlooked the Network Readiness Index 2024 (NRI 2024) report showing that India has improved its position by eleven slots and is now placed at 49th rank as against 60th rank scored in the NRI 2023 report. In its latest version of 2024, the report maps the network-based readiness landscape of 133 economies based on their performances in four different pillars: Technology, People, Governance, and Impact, covering a total of 54 variables. 

On the global front, European markets were trading higher, even as Spain's consumer price inflation increased more than expected in November to the highest level in four months. The flash data from the statistical office INE showed that consumer price inflation rose to 2.4 percent in November from 1.8 percent in October. That was just above the expected rate of 2.3 percent. Asian markets were trading mixed, after Malaysia's producer prices decreased for the second straight month in October. The figures from the Department of Statistics showed that producer prices fell 2.4 percent year-on-year in October, following a 2.1 percent drop in September. Further, this was the steepest fall since June 2023.

The BSE Sensex is currently trading at 79032.94, down by 1201.14 points or 1.50% after trading in a range of 78918.92 and 80447.40. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell by 0.20%, while Small cap index was up by 0.24%.

The few gaining sectoral indices on the BSE were Utilities up by 0.62%, Realty up by 0.31% and Oil & Gas up by 0.02%, while IT down by 2.33%, TECK down by 2.10%, Auto down by 1.25%, Consumer Durables down by 1.21% and Bankex down by 0.93% were the top losing indices on BSE.

The only gainer on the Sensex was SBI up by 0.46%. On the flip side, Infosys down by 3.49%, Mahindra & Mahindra down by 2.99%, Titan down by 2.54%, Tech Mahindra down by 2.50% and HCL Tech. down by 2.47% were the top losers.

Meanwhile, Indian Paper Manufacturers Association (IPMA) has expressed concerns over rising imports of virgin fibre paperboard from countries like China and Chile. It said that below-cost shipments are hitting local producers and threatening their investments. It said that imports of virgin fibre paperboard (VFP), mainly used as packaging material for pharma, FMCG, and cosmetics products, have grown more than three-fold to 21,233 tonnes per month in the first six months of 2024-25 compared to the average 6,337 tonnes per month in 2021-22. In August and September of the current fiscal, imports have been over 30,000 tonnes per month, which is over 20 per cent of the total domestic demand.

The industry body said the situation is getting exacerbated by the rising imports from China and Chile and the impending threat of large-scale imports from Indonesia due to the recent capacity expansion of 1.2 million tonnes per annum mainly targeted at exports. The landed price of VFP imports is below the sales cost of the domestic industry, straining profitability and return on investments of domestic manufacturers. 

IPMA said the VFP market is expected to touch Rs 25,000 crore by 2030 from Rs 10,000 crore at present and domestic companies have lined up investment of Rs 20,000 crore to tap this growth. The economic viability of the investments has been impacted significantly in view of dumping of product at prices far below production cost. IPMA has urged the government to create a level playing field for domestic manufacturers.

The CNX Nifty is currently trading at 23916.65, down by 358.25 points or 1.48% after trading in a range of 23873.35 and 24345.75. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 1.76%, Shriram Finance up by 0.83%, SBI up by 0.40% and Cipla up by 0.15%. On the flip side, HDFC Life Insurance down by 5.71%, SBI Life Insurance down by 5.42%, Infosys down by 3.59%, Mahindra & Mahindra down by 3.04% and HCL Tech. down by 2.67% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 18.66 points or 0.23% to 8,293.41, France’s CAC rose 46.47 points or 0.65% to 7,189.50 and Germany’s DAX gained 132.39 points or 0.69% to 19,394.14.

Asian markets were trading mixed; Hang Seng declined 236.17 points or 1.22% to 19,366.96, Jakarta Composite plunged 33.77 points or 0.47% to 7,212.12, Shanghai Composite weakened 14.08 points or 0.43% to 3,295.70 and Taiwan Weighted lost 35.88 points or 0.16% to 22,298.90, while Straits Times rose 17.54 points or 0.47% to 3,725.63, KOSPI increased 1.61 points or 0.06% to 2,504.67 and Nikkei 225 surged 214.09 points or 0.56% to 38,349.06.