Markets remain lower in late afternoon session

Bourses continued to reel under pressure in late afternoon session following weak cues from European markets. Sentiments were downbeat ahead of the Federal Reserve's interest-rate decision due this week. Traders paid no heed towards Inflation based on wholesale price index (WPI) in India eased in the month of November 2024 to 1.89% as compared to 2.36% in October 2024, due to fall in prices of food articles, crude petroleum & natural gas and electricity.  On the global front, Asian markets were trading mostly in red as China reported mixed economic data and focus shifted to the Bank of Japan and Federal Reserve rate decisions due this week. European markets were trading lower with banks leading losses after Moody's unexpectedly downgraded France's credit rating to Aa3 from Aa2. Back home, HSBC Flash India Composite Output Index - a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors - registered 60.7 at the end of the 2024 calendar year.

The BSE Sensex is currently trading at 81709.24, down by 423.88 points or 0.52% after trading in a range of 81551.28 and 82116.44. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.59%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Realty up by 3.25%, Consumer Discretionary up by 0.54%, Industrials up by 0.41%, Consumer Durables up by 0.33% and Healthcare was up by 0.21%, while Metal down by 0.99%, TECK down by 0.92%, Oil & Gas down by 0.75%, IT down by 0.72% and Energy was down by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.28%, Bajaj Finance up by 0.36%, Power Grid up by 0.33%, Axis Bank up by 0.32% and ICICI Bank up by 0.15%. On the flip side, Titan Company down by 2.06%, TCS down by 1.52%, Ultratech Cement down by 1.42%, JSW Steel down by 1.32% and NTPC down by 1.29% were the top losers.

Meanwhile, Crisil ratings in its latest report has said that the agrochemicals sector's revenue is expected to grow at 7-9 per cent in FY26, following stable domestic demand and recovery in export volumes. However, it said historically low realisations will continue to hinder a return to double-digit growth seen before the Covid-19 pandemic. Operating margins are also seen to be recovering slowly, rising 100 basis points to 12-13 per cent, still below the pre-pandemic levels of 15-16 per cent, which will keep firms cautious with capital expenditure and focus on managing working capital to maintain their cash flows and balance sheets steady.

According to the report, revenue from exports, which comprises half of the sector's total revenue, is witnessing change. Global firms have largely resolved their excess inventory issues related to low-cost Chinese supplies and are now ordering closer to the cropping season to better manage working capital. While it expects healthy volume growth this fiscal, revenue growth will be modest at 3-4 per cent amid pricing pressures from competitively priced Chinese products. In the next fiscal, this may improve to over 7 per cent as these pressures ease.  

The report said conversely, domestic revenue is seen rising by 8-9 per cent this fiscal due to good monsoon and adequate reservoir levels, which are boosting agricultural output. This is despite continuing pricing pressures from oversupply in China, albeit less severe than last year. It said that this trend is expected to continue, leading to fewer instances of inventory write offs. Additionally, with improved volumes, the sector's profitability is expected to improve as well. It expects the sector's operating margin to improve slightly to about 12 per cent this fiscal and 13 per cent next year, but ongoing pricing pressures will limit this growth despite higher sales volumes. 

It noted that control over debt and gradual improvement in operating profitability will lead to the sustenance of stable debt protection metrics over the near to medium term. However, factors such as Chinese oversupply, adverse weather conditions impacting demand in key geographies, movement in raw material prices and any regulatory changes both in India and overseas will need to be watched.

The CNX Nifty is currently trading at 24653.70, down by 114.60 points or 0.46% after trading in a range of 24601.75 and 24781.25. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 1.93%, Indusind Bank up by 1.22%, Bajaj Finance up by 0.49%, HDFC Life Insurance up by 0.41% and Power Grid up by 0.40%. On the flip side, Titan Company down by 2.10%, TCS down by 1.57%, Ultratech Cement down by 1.37%, Adani Ports down by 1.27% and NTPC down by 1.26% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 175.75 points or 0.89% to 19,795.49, Jakarta Composite plunged 91.62 points or 1.25% to 7,233.17, Nikkei 225 slipped 12.95 points or 0.03% to 39,457.49, Shanghai Composite weakened 5.55 points or 0.16% to 3,386.33 and KOSPI was down by 5.49 points or 0.22% to 2,488.97. On the flip side, Straits Times rose 6.77 points or 0.18% to 3,817.12 and Taiwan Weighted was up by 19.42 points or 0.08% to 23,039.90.

European markets were trading lower; UK’s FTSE 100 decreased 8.72 points or 0.11% to 8,291.61, France’s CAC fell 35.78 points or 0.49% to 7,373.79 and Germany’s DAX was down by 40.37 points or 0.2% to 20,365.55.