Post Session: Quick Review

Indian equity markets ended lower on Monday as investors went on a selling spree, weighed down by concern about Federal Reserve's interest-rate decision. Federal Reserve's interest-rate decision due this week. Positive November's Wholesale Price Index (WPI) inflation data failed to cheer the traders’ sentiments. Throughout the day, markets traded below neutral lines. As for broader indices, the BSE Mid cap index and Small cap index ended in green.

Markets made negative start and extended their losses tracking mixed cues from Asian counterparts, with the focus firmly on the U.S. Federal Reserve's December 17-18 Federal Open Market Committee (FOMC) meeting to decide key interest rates. Some concern came as the Reserve Bank of India (RBI) data revealed that India’s foreign exchange reserves dropped by $3.235 billion to $654.857 billion, a five-month low, for the week ended December 6. Traders overlooked preliminary readings from a survey showed India's private sector output grew at the fastest pace in four months, helping the economy end 2024 on a positive note underpinned by sturdier demand in services and manufacturing and record jobs growth. Asia's third-largest economy grew a softer 5.4% last quarter, but easing inflation is expected to spur demand among private sector firms, improving the outlook for next year. HSBC's December flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 60.7 this month - matching August's reading - after dropping to 58.6 in November.  In afternoon session, indices touched their day’s low levels even after 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. Markets remained lower in late afternoon session as traders avoided to take risk. 

On the global front, European markets were trading lower after Moody's unexpectedly downgraded France's credit rating to Aa3 from Aa2. Asian markets ended 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. Back home, Society of Indian Automobile Manufacturers (SIAM) has said that passenger vehicle dispatches from companies to dealerships rose 4 per cent year on year to 3,47,522 units in November 2024 with demand momentum sustaining post festive period in October.

The BSE Sensex ended at 81,748.57, down by 384.55 points or 0.47% after trading in a range of 81,551.28 and 82,116.44. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.73%, while Small cap index was up by 0.47%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.17%, Consumer Disc up by 0.69%, Industrials up by 0.56%, Consumer Durables up by 0.50% and Capital Goods was up by 0.38%, while Metal down by 0.95%, TECK down by 0.82%, Oil & Gas down by 0.75%, Utilities down by 0.63% and IT was down by 0.61% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 1.28%, Bajaj Finance up by 0.30%, Power Grid up by 0.24%, Mahindra & Mahindra up by 0.16% and Axis Bank up by 0.05%. On the flip side, Titan Company down by 1.93%, Adani Ports down by 1.37%, Ultratech Cement down by 1.31%, TCS down by 1.29% and NTPC down by 1.25% were the top losers. (Provisional)

Meanwhile, after the Reserve Bank in its latest monetary policy cut growth forecast to 6.6 per cent from 7.2 per cent, Fitch Ratings has revised India’s Gross Domestic Product (GDP) forecast for 2024-25 to 6.4 per cent from its previous estimate of 7.0 per cent. Fitch also forecasts India’s GDP to expand by 6.5 per cent in 2025-26, slowing from the 8.2 per cent pace in 2023-24. However, it asserted India’s economic growth remains strong relative to that of global peers.

It said ‘The Indian economy recovered strongly from the Covid-19 pandemic shock. Although indicators point to a more mixed picture in recent months, we do not think that the softness will translate into a prolonged slump in economic activity.’ It expects domestic demand to continue driving economic growth amid a potential trade war between the US and China and a global trade slowdown.

Fitch expects policy continuity in areas that have been key growth drivers, such as the infrastructure drive, digitalisation and ease of doing business measures, even as the government follows through on fiscal consolidation. Public infrastructure capex will remain supportive of the economy and the assets that are directly deployed or related to the sector. The improved health of bank and corporate balance sheets in recent years should also pave the way for a positive investment cycle and faster capital spending.

The CNX Nifty ended at 24,668.25, down by 100.05 points or 0.40% after trading in a range of 24,601.75 and 24,781.25. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy's Lab up by 1.89%, Indusind Bank up by 1.29%, HDFC Life Insurance up by 0.38%, Bajaj Finance up by 0.36% and Power Grid Corp up by 0.34%. On the flip side, Titan Company down by 2.01%, Adani Ports down by 1.33%, TCS down by 1.31%, Hindalco down by 1.30% and BPCL down by 1.24% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 19.8 points or 0.24% to 8,280.53, France’s CAC fell 43.73 points or 0.59% to 7,365.84 and Germany’s DAX was down by 63.33 points or 0.31% to 20,342.59.

Asian markets ended mostly down on Monday as mixed economic readings from China disappointed investors. Data showed that Chinese industrial production posted a faster expansion and house prices fell at slower pace, while Chinese retail sales growth softened. Chinese and Hong Kong shares dipped, despite reports that China might cut interest rates and the reserve requirement ratio in a timely manner next year. Seoul shares fell after South Korean President Yoon Suk Yeol was impeached on the weekend. Moreover, Japanese shares declined amid caution before the Bank of Japan and Federal Reserve rate decisions due this week.