Benchmarks end lower on Thursday

Indian equity benchmarks ended lower on Thursday due to intense selling in index majors NTPC, Hindustan Unilever and Tata Motors as investors turned cautious ahead of the inflation data announcement. After making a cautious start, key gauges gradually declined throughout the session, and ended near the day’s lows as traders were anxious with Asian Development Bank’s (ADB) latest edition of Asian Development Outlook (ADO) stating that it lowered India’s economic growth forecast to 6.5 per cent for the current financial year (FY25) from its earlier estimate of 7 per cent due to lower-than-expected growth in private investment and housing demand. It has also lowered India’s growth forecast for 2025-26 financial year. Some concern also came as exchange data showed Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 1,012.24 crore. 

Rising crude oil prices also weighed on the domestic sentiments, as the data from the Energy Information Administration (EIA) showed crude oil inventories fell by 1.4 million barrels in the week ended December 6. Sentiments remained down-beat amid reports that the elevated inflation does not offer the Reserve Bank any space for an interest rate cut in the next policy review in February and the whole of FY26 as well. Traders overlooked a report by the PHD Chamber of Commerce and Industry (PHDCCI) stating that India's states have demonstrated remarkable economic resilience in the aftermath of the COVID-19 pandemic, with 25 states achieving over 7 per cent growth in their Gross State Domestic Product (GSDP) during FY22 and FY23. Among these, 17 states surpassed an impressive 9 per cent growth rate, with Gujarat, Kerala, Telangana, Rajasthan, West Bengal, Bihar, Karnataka, Uttar Pradesh, Haryana, and Odisha standing out for their robust economic performance during 2021-22 and 2022-23. 

On the global front, Asian markets settled mostly higher on Thursday amid optimism about the outlook for interest rates following the release of the closely watched US inflation data that came in line with estimates. The report has increased confidence that the US Fed will lower interest rates by another quarter-point next week. European markets were trading higher ahead of a European Central Bank (ECB) rate decision later in the day. The ECB is widely expected to cut its benchmark rates by 25 basis points for the third consecutive meeting, citing weaker economic growth and moderating inflation. Back home, on the sectoral front, stocks related to logistics sector were in focus as Union Minister for Road Transport and Highways, Nitin Gadkari said that changes in the cost of fuel and road can bring the logistics cost to nine per cent. The Union Minister stated that savings made by reducing the fuel and road cost will significantly help the state to strengthen its export capabilities.

Finally, the BSE Sensex fell 236.18 points or 0.29% to 81,289.96, and the CNX Nifty was down by 93.10 points or 0.38% to 24,548.70.        

The BSE Sensex touched high and low of 81,680.97 and 81,211.64 respectively. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.56%, while Small cap index was down by 1.00%.

The few gaining sectoral indices on the BSE were TECK up by 0.78%, IT up by 0.64% and Utilities up by 0.07%, while FMCG down by 1.15%, Energy down by 1.03%, PSU down by 1.03%, Industrials down by 0.83% and Consumer Discretionary down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.67%, Bharti Airtel up by 1.56%, Indusind Bank up by 1.31%, Infosys up by 0.92% and Adani Ports & SEZ up by 0.90%. On the flip side, NTPC down by 2.76%, Hindustan Unilever down by 2.42%, Tata Motors down by 1.59%, Maruti Suzuki down by 1.42% and Larsen & Toubro down by 1.26% were the top losers.

Meanwhile, the Asian Development Bank (ADB) in its latest edition of Asian Development Outlook (ADO) has said that it lowered India’s economic growth forecast to 6.5 per cent for the current financial year (FY25) from its earlier estimate of 7 per cent due to lower-than-expected growth in private investment and housing demand. It has also lowered India’s growth forecast for 2025-26 financial year.

It however said India’s growth will remain robust, with the economy supported by higher agriculture output resulting from the summer (or kharif) crop season (which will also put downward pressure on food prices); continued resilience of the services sector; and lower-than-expected Brent crude prices in 2024 and 2025. 

It further said strong forward-looking and labour market indicators, such as PMI for industry and services, urban labour force participation and Reserve Bank of India’s industrial outlook, suggest that economic momentum will recover in the coming quarters. Besides, it said Asia and the Pacific’s economies are projected to grow 4.9 per cent in 2024, slightly below ADB’s September forecast of 5 per cent.

The CNX Nifty traded in a range of 24,675.25 and 24,527.95. There were 14 stocks advancing against 35 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Adani Enterprises up by 1.90%, Bharti Airtel up by 1.51%, Indusind Bank up by 1.34%, Tech Mahindra up by 1.21%, and Adani Ports & SEZ up by 0.84%. On the flip side, NTPC down by 2.63%, Hindustan Unilever down by 2.31%, Coal India down by 2.17%, Hero MotoCorp down by 2.05% and BPCL down by 1.85% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 15.97 points or 0.19% to 8,317.59, France’s CAC rose 5.03 points or 0.07% to 7,428.43 and Germany’s DAX gained 8.52 points or 0.04% to 20,407.68.

Asian markets settled mostly higher on Thursday tracking Wall Street's tech-led rally overnight after in-line US inflation data cementing expectations that the Federal Reserve will cut interest rates by another quarter point next week. Japanese shares gained with Nikkei index topped 40,000 for the first time since mid-October followed by advances in chip-sector shares, while the yen languished near two-week low against the dollar as traders pared bets for a Bank of Japan interest rate hike next week. Moreover, Chinese shares climbed ahead the outcome of a key policy meeting in China, where leaders are expected to map out next year's economic priorities. Sentiments rose further after reports that China's leaders and policymakers are considering allowing the yuan to weaken next year in response to the threat of a trade war with the United States.