Key gauges end lower ahead of US Fed Outcome

Indian equity benchmarks ended lower on Monday, dragged by a decline in Metal, TECK and Oil & Gas stocks. After an initial decline, the markets gradually drifted lower in the first half and then traded within a range for the rest of the session, due to weak global cues amid caution ahead of the US Fed interest rate decision later this week. Traders were anxious 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 the preliminary readings from a survey showing that 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.  Traders paid no heed towards the data showing that 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. Traders also ignored a report stating that foreign investors have made a strong comeback to Indian equities with a net investment of Rs 22,766 crore in the first two weeks of December driven by expectations of rate cut by the US Federal Reserve. This revival follows significant outflows in the preceding months, with Foreign Portfolio Investors (FPIs) pulling out a net Rs 21,612 crore in November and a massive Rs 94,017 crore in October -- the worst monthly outflow on record. 

On the global front, European markets were trading lower after credit ratings agency Moody's unexpectedly downgraded France's rating, adding to pressure on the nation's borrowing costs and raising doubts over whether a new government can mend the deteriorating financial situation. Asian markets ended mostly down on Monday as China reported mixed economic data and focus shifted to the Bank of Japan and Federal Reserve rate decisions due this week. 

Back home, on the sectoral front, coal sector stocks were in focus with a private report that the country's coal import rose by 4.2 per cent to 162.45 million tonnes (MT) in the April-October period of the current financial year compared to 155.87 MT in the year-ago period. Banking stocks also were in watch as the Finance Ministry stated the gross non-performing assets (NPA) ratio for scheduled commercial banks (SCBs) witnessed a significant reduction to 2.67 percent in June 2024 from 11.18 percent in March 2018.

Finally, the BSE Sensex fell 384.55 points or 0.47% to 81,748.57, and the CNX Nifty was down by 100.05 points or 0.40% to 24,668.25.        

The BSE Sensex touched high and low of 82,116.44 and 81,551.28 respectively. There were 6 stocks advancing against 24 stocks declining on the index.

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

The top gaining sectoral indices on the BSE were Realty up by 3.17%, Consumer Discretionary up by 0.69%, Industrials up by 0.56%, Consumer Durables up by 0.50% and Capital Goods 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 down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.28%, Bajaj Finance up by 0.30%, Power Grid Corporation up by 0.24%, Axis Bank up by 0.17% and Mahindra & Mahindra up by 0.12%. On the flip side, Titan Company down by 2.04%, Adani Ports &SEZ down by 1.37%, TCS down by 1.29%, Ultratech Cement down by 1.29% and NTPC down by 1.25% were the top losers.

Meanwhile, 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. 

The Component wise, primary articles index, having weight of 22.62%, decreased by 1.20% to 197.9 (provisional) in November 2024 from 200.3 (provisional) for the month of October 2024, on the back of fall in prices of food articles and crude petroleum & natural gas. However, prices of minerals and non-food articles increased in November 2024 as compared to October 2024.

Fuel & Power index, having weight of 13.15%, increased by 0.41% to 147.1 (provisional) in November 2024 from 146.5 (provisional) for the month of October 2024, as price of mineral oils increased in November, 2024 while price of electricity generation decreased in November 2024 as compared to October 2024. But, price of coal remained same as in the previous month.

Further, Manufactured Products constituting the major portion of the index with weight of 64.23%, increased by 0.35% to 143.0 (provisional) in November, 2024 from 142.5 (provisional) for the month of October, 2024. Meanwhile, for the month of September, 2024 the final Wholesale Price Index and inflation rate for 'All Commodities' (Base: 2011-12=100) stood at 154.7 and 1.91% respectively.

The CNX Nifty traded in a range of 24,781.25 and 24,601.75. There were 9 stocks advancing against 40 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 1.90%, Indusind Bank up by 1.22%, HDFC Life Insurance up by 0.41%, Bajaj Finance up by 0.24% and Power Grid Corporation up by 0.22%. On the flip side, Titan Company down by 1.93%, Adani Ports &SEZ down by 1.38%, Hindalco down by 1.37%, TCS down by 1.25% and Tech Mahindra down by 1.19% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 24.38 points or 0.29% to 8,275.95, France’s CAC fell 48.12 points or 0.65% to 7,361.45 and Germany’s DAX lost 59.69 points or 0.29% to 20,346.23.

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.