Sensex, Nifty magnify opening losses

Indian equity benchmarks made negative start on Friday following the broadly negative cues from Wall Street overnight, ahead of the crucial Federal Reserve's Federal Open Market Committee (FOMC) meeting on December 17 and 18. Sensex and Nifty soon extended their losses and are trading with cut of around 0.70% each in early deals amid foreign fund outflows. Foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 3,560 crore on December 12. Traders overlooked the lower November month retail inflation print, and higher index of industrial production reading for October. The Consumer Price Index (CPI)-based retail inflation slowed to 5.48 per cent in November from a 14-month high of 6.21 per cent in October, indicating persistent price pressures across sectors. Besides, India’s industrial output rose to 3.5 per cent in October from 3.1 per cent in September, driven largely by a rebound in the manufacturing and electricity sectors. 

On the global front, Asian markets are trading mixed, as investors digested higher-than-expected jobless claims as well as too hot producer price data from the U.S. and looked ahead to next week's Federal Reserve policy meeting. Meanwhile, the readout from a high-level economic policy meeting in Beijing offered another round of strong language about helping the economy but lacked detail about policy or stimulus moves. Back home, Metal stocks are trading under pressure amid a lack of clarity on policy measures from China, a key consumer. Also, ICRA said capacity utilisation of domestic steel industry in 2024-25 is poised to slip below 80 per cent for the first time in four years as cheap imports nibble at market share. 

The BSE Sensex is currently trading at 80744.11, down by 545.85 points or 0.67% after trading in a range of 80672.36 and 81224.08. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.84%, while Small cap index was down by 1.09%.

The top losing sectoral indices on the BSE were Metal down by 2.12%, Basic Materials down by 1.29%, PSU down by 1.24%, Utilities down by 1.21% and Power down by 1.07%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Bharti Airtel up by 0.61%, Nestle up by 0.29%, Adani Ports & SEZ up by 0.21%, Hindustan Unilever up by 0.19% and TCS up by 0.14%. On the flip side, Tata Steel down by 2.82%, JSW Steel down by 2.64%, Indusind Bank down by 2.18%, NTPC down by 1.39% and Axis Bank down by 1.38% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, FICCI’s newly appointed President Harsha V Agarwal has said that ‘Green shoots’ are visible on the consumption front as food inflation has started receding. He said food inflation is expected to come down to its normal level in the next two quarters, and added that he is hopeful for a revival in consumption growth, aided by a good crop and increased spending by the government on the big-ticket infra projects and rural schemes in the December quarter. He noted government spending in the right areas, like increase in capex and ramping up infrastructure, rather than focusing on revenue expenditure, is helping the overall economy.

He said ‘We are seeing some green shoots where we believe food inflation is coming down... it has to come back to normal. It might take maybe one quarter or so. But we are seeing situations where it is improving, and hence we are hopeful that consumption should increase’. Government spending in the September quarter was low due to the general elections in the June quarter. However, it increased in the third quarter and is expected to continue in the fourth quarter as well. He added ‘Going forward, we see that increasing in Q3 and substantially in Q4. So cumulatively, with all these things, we are hopeful that the consumption should improve going from here’. The government is focused a lot on the rural economy, which has done well in the second quarter.

Over the cement sector, which faced a decline in price in the last two quarters YoY, Agarwal said ‘Their prices might be declining, but still, all the cement companies are making a good profit.’ He further added it ‘may be because in the industry now, consolidation is happening. Some of the larger players are fighting for market share, etc.’ He said government programs, such as the Production Linked Incentive (PLI) scheme, have made a big difference in some key strategic sectors such as electronics, manufacturing of mobile phones, active pharmaceutical ingredients, etc.

The CNX Nifty is currently trading at 24373.40, down by 175.30 points or 0.71% after trading in a range of 24365.80 and 24520.80. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 0.66%, BPCL up by 0.41%, Adani Enterprises up by 0.32%, Apollo Hospital up by 0.28% and Nestle up by 0.20%. On the flip side, Tata Steel down by 2.88%, JSW Steel down by 2.68%, Shriram Finance down by 2.58%, Indusind Bank down by 2.32% and Hindalco down by 2.14% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 466.91 points or 1.17% to 39,382.23, Hang Seng declined 339.29 points or 1.66% to 20,057.76, Shanghai Composite weakened 51.63 points or 1.51% to 3,409.87 and Jakarta Composite was down by 32.15 points or 0.43% to 7,362.09. On the other hand, Taiwan Weighted rose 36.51 points or 0.16% to 23,083.31, Straits Times added 7.49 points or 0.2% to 3,816.76 and KOSPI was up by 13.58 points or 0.55% to 2,495.70.