Post Session: Quick Review

Bears continued to hold their control over the Indian markets with Nifty and Sensex settling below the psychological 24,200 and 80,200 levels, respectively. Markets continued their losing runs on Wednesday ahead of the outcome of the two-day Federal Reserve meet later today. Fed is likely to deliver a 25-basis-point interest rate cut. As for broader indices, the BSE Mid cap index and Small cap index ended with cut of over half a percent.

Markets made negative start and extended their losses amid foreign fund outflows. Foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 6,409 crore on December 17. Some concern also came as the Global Trade Research Initiative (GTRI) stated that India's gold imports have surged alarmingly, posing a potential threat to its trade balance and economic stability, and the government should take action to address this issue. It said the imports are driven by multiple factors, including growing investment demand, tariff reductions, and loopholes in trade agreements and this surge has raised significant economic concerns, distorting the trade balance, weakening the rupee, and widening the current account deficit. In afternoon session, indices continued their downward trade. Traders got cautious, amid a private report stating that India’s foreign aid has dipped post-pandemic but has also become more varied than before. The average aid per annum declined to Rs 5,011 crore in the four years since FY22 as compared with Rs 5,805 crore in the four years leading up to Covid. Besides, US President-elect Donald Trump has set the stage for a potential trade conflict with India, threatening to impose reciprocal tariffs if the country continues to levy high taxes on American goods. In late afternoon session, indices remained lower, as traders overlooked the report that Finance Minister Nirmala Sitharaman told Lok Sabha that the government believes the GDP growth slowdown in Q2FY25 ‘is a temporary blip’ and that an improvement will be seen in coming quarters.

On the global front, European markets were trading higher as Bank of Japan and Bank of England are also holding their final policy meetings of 2024 this week, with both expected to leave their key policy rates unchanged. Asian markets ended mixed as all eyes are on the Federal Reserve, which is widely expected to deliver a 25-basis-point interest rate cut, but the focus will be on the extent of rate reductions projected for 2025. Back home, Union Minister for New and Renewable Energy, Pralhad Joshi has said that India is not only witnessing an energy revolution but also becoming the renewable energy capital of the world. 

The BSE Sensex ended at 80,182.20, down by 502.25 points or 0.62% after trading in a range of 80,050.07 and 80,868.02. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.61%, while Small cap index was down by 0.76%. (Provisional)

The few gaining sectoral indices on the BSE were Healthcare up by 0.58% and IT was up by 0.13%, while Utilities down by 2.06%, PSU down by 1.93%, Power down by 1.78%, Capital Goods down by 1.56% and Metal was down by 1.44% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 0.64%, Sun Pharma up by 0.63%, TCS up by 0.55%, Tech Mahindra up by 0.50% and HCL Tech up by 0.40%. On the flip side, Tata Motors down by 3.03%, Power Grid down by 2.42%, NTPC down by 2.09%, Adani Ports down by 1.79% and JSW Steel down by 1.61% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s growth prospects, Finance Minister Nirmala Sitharaman has said the lower-than-expected Gross Domestic Product (GDP) growth of 5.4 per cent in the second quarter (Q2) was a ‘temporary blip’ and the economy will see healthy growth in the coming quarters. She said India has seen ‘steady and sustained’ growth and its GDP growth rate has averaged 8.3 per cent in the last three years.

She added India continues to be the fastest-growing major economy in the world. She further said there is no broad-based slowdown in the manufacturing sector. Half of the sectors within the overall manufacturing basket continue to remain strong. The Indian economy grew 6.7 per cent in the first (April-June) quarter and 5.4 per cent in the July-September period. 

About inflation, Sitharaman said it is better controlled in the NDA regime, whereas under the UPA, it touched double digits. She noted that retail inflation in April-October 2024-25 stood at 4.8 per cent, the lowest since the Covid pandemic. She said the unemployment rate has come down from 6 per cent in 2017-18 to 3.2 per cent now.

The CNX Nifty ended at 24,198.85, down by 137.15 points or 0.56% after trading in a range of 24,149.85 and 24,394.45. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Trent up by 2.48%, Dr. Reddy's Lab up by 2.22%, Cipla up by 1.49%, Wipro up by 1.21% and Bajaj Auto up by 0.69%. On the flip side, Tata Motors down by 3.08%, Power Grid down by 2.50%, Bharat Electronics down by 2.19%, NTPC down by 2.09% and JSW Steel down by 2.07% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 32.39 points or 0.4% to 8,227.59, France’s CAC rose 15.88 points or 0.22% to 7,381.58 and Germany’s DAX was up by 25.06 points or 0.12% to 20,271.43.

Asian markets ended mostly higher on Wednesday ahead of outcome of the Federal Reserve meeting later in the day, but relatively hawkish Fed rate cut is expected. Beyond the Federal Reserve, central bank meetings in Japan, Thailand, Indonesia and Philippines are also due this week. Chinese shares gained after reports that China is planning a record budget deficit for 2025 and that the State-owned Assets Supervision and Administration Commission has urged state-owned firms to improve market value management of listed companies. Hong Kong shares jumped with expectations that Chinese stimulus measures will help spur consumption. Although, Japanese shares declined as the BoJ is likely to keep its benchmark interest rates unchanged this week. Investors will pay close attention to BoJ Governor Kazuo Ueda’s press conference to know about whether and how much the central bank will raise key borrowing rates in 2025.