Post Session: Quick Review

Indian markets reversed all their early losses to end near day’s high levels on Friday led by buying in IT sectors stocks amid hopes of a U.S. rate cut. In first half of the session, markets witnessed heavy losses amid foreign fund outflows. However, in second half of the session, markets recovered from losses. However, BSE Mid cap index and Small cap index ended in red.

Markets made negative start and extended their losses 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. Besides, 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. However, in afternoon session, indices managed to recoup from losses and remained higher. Traders got relief, as Ministry of Commerce & Industry in its latest release has showed that India has achieved a remarkable milestone in its economic journey, with gross foreign direct investment (FDI) inflows reaching an impressive $1 trillion since April 2000, bolstered by a nearly 26% rise in FDI to $42.1 billion during the first half of the current fiscal year (H1 FY25) as against $33.5 billion in H1 FY24. In late afternoon session, markets continued to trade higher as investors continued to hunt for fundamentally strong stocks.

On the global front, European markets were trading higher a day after the European Central Bank (ECB) cut its three key interest rates by 25 basis points in the fourth reduction this year, and signaled it expects inflation to return to the target earlier. Asian markets ended mostly in red as China's latest vows to boost the beleaguered economy failed to stir much excitement, while traders looked ahead to a key Federal Reserve policy meeting next week. Back home, Commerce and Industry Minister Piyush Goyal has expressed confidence that India's economic growth by end of this fiscal will be back on track despite global uncertainties. He said that this year also India will be the world's fastest growing economy.

The BSE Sensex ended at 82,133.12, up by 843.16 points or 1.04% after trading in a range of 80,082.82 and 82,213.92. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.08%, while Small cap index was down by 0.29%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.13%, TECK up by 1.32%, Consumer Durables up by 1.14%, FMCG up by 1.07% and Bankex was up by 0.81%, while Metal down by 0.76%, Realty down by 0.40%, Healthcare down by 0.29%, Basic Materials down by 0.09% and Industrials was down by 0.01% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 4.31%, ITC up by 2.39%, Kotak Mahindra Bank up by 2.06%, Hindustan Unilever up by 1.92% and Titan Company up by 1.86%. On the flip side, Tata Steel down by 1.26%, Indusind Bank down by 1.05%, JSW Steel down by 0.90% and Bajaj Finserv down by 0.15% were the top losers. (Provisional)

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 ended at 24,768.30, up by 219.60 points or 0.89% after trading in a range of 24,180.80 and 24,792.30. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 4.42%, Kotak Mahindra Bank up by 2.09%, ITC up by 2.04%, Hindustan Unilever up by 1.93% and Ultratech Cement up by 1.91%. On the flip side, Shriram Finance down by 2.63%, Tata Steel down by 1.21%, Indusind Bank down by 1.13%, Hindalco down by 0.99% and JSW Steel down by 0.59% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 4.12 points or 0.05% to 8,315.88, France’s CAC rose 8.34 points or 0.11% to 7,429.28 and Germany’s DAX was up by 62.23 points or 0.3% to 20,488.50.

Asian markets ended mostly down on Friday tracking Wall Streets’ overnight fall after data showed producer prices increased by the most in five months in November and weekly jobless claims unexpectedly rose last week, that fuelled concerns about how quickly the Fed will cut interest rates early next year. Meanwhile, investors also looked ahead to next week's Federal Reserve meeting. Japanese shares fell even after data showed sentiment among large Japanese manufacturers improved slightly in the final quarter of the year, adding more evidence of economic recovery just a week before a closely-watched meeting at the Bank of Japan. Moreover, Chinese and Hong Kong shares dropped on disappointment after the China Central Economic Work Conference did not offer details on new stimulus measures. However, Seoul shares gained ahead of a second impeachment motion against President Yoon Suk Yeol in parliament this weekend.