Sensex falls 250 pts to 81,450; FMCG drags 2%; Godrej Consumer falls 10%

Benchmark Indian equity indices BSE Sensex and Nifty 50 were trading lower on Monday.

At 10 AM, the BSE Sensex was 170 points, or 0.21 per cent lower, at 81,538, while the Nifty 50 was at 24,623, down 53.90 points, or 0.22 per cent.

After opening bell, more than half the stocks on the BSE Sensex were trading with cuts. Gains were led by Larsen & Toubro (up 1.25 per cent), followed by NTPC, JSW Steel, Bajaj Finance, and HDFC Bank. On the flip side, losses were capped by Hindustan Unilever (down 3.23 per cent), followed by UltraTech Cement, Mahindra & Mahindra, Infosys, and Nestle India.

On the Nifty 50, 26 stocks out of the 50 in the frontline index were trading higher. Gains were led by Larsen & Toubro (up 1.52 per cent), followed by SBI Life, Bajaj Finance, Tech Mahindra, and BEL, while losses were capped by Hindustan Unilever (down 3.52 per cent), followed by Tata Consumer Products, Britannia, Nestle India, and UltraTech Cement.

Meanwhile, across sectors, the FMCG index was the top drag, falling 1.62 per cent, led by Godrej Consumer Products, which was down 10 per cent. Following the FMCG index lower were the Media, Healthcare, Pharma, Metal, PSU Bank and Auto indices, while Consumer Durables, financials, and the IT indices were trading with gains.

In the broader markets, the Nifty Midcap 100 was 0.36 per cent higher, followed by the Nifty Smallcap 100, which had climbed 0.11 per cent.

Markets in India are likely to be driven by the strong momentum in US markets after largely in line jobs data there boosted prospects of a rate cut by the Federal Reserve in its meeting next week. In the previous week, India’s central bank governor Shaktikanta Das had announced to stand pat with regard to key policy rates, while reducing the cash reserve ratio (CRR) to 4 per cent.

Apart from that, the central banker also announced a downward revision in the FY25 GDP growth forecast to 6.6 per cent from 7.2 per cent earlier, along with revising the inflation forecast upward to 4.8 per cent, compared to the earlier estimate of 4.5 per cent.

In that backdrop, Singapore-based Manishi Raychaudhuri, chief executive officer of Emmer Capital Partners, sounded a word of caution for investors in a conversation with Business Standard. According to him, Indian markets have more room to correct, in a situation where geopolitical concerns are expected to be the most important driver of financial markets in 2025.

However, after the heavy selling in the past two months, foreign investors have staged a strong comeback to Indian equities with a net investment of Rs 24,454 crore in the first week of December amid stabilising global conditions and expectations of potential US Federal Reserve rate cuts.

Moreover, investments by foreign portfolio investors (FPIs) have fluctuated throughout the year, remaining negative for five of the 12 months in 2024. By the end of November, year-to-date (YTD) FPI investments had turned negative. However, with a recent revival in foreign flows, 2024 could still mark the second consecutive year of positive FPI investment.

As of now, YTD FPI flows stand at Rs 25,444 crore. Foreign investments in the primary markets — mainly through initial public offerings, qualified institutional placements, and rights issues — have reached a record Rs 1.1 trillion. READ MORE

In the last trading session of the previous week, benchmark equity indices gave up their 5-day winning streak to settle in red following the RBI MPC’s announcement.

The 30-share Sensex settled lower by merely 56.74 points or 0.07 per cent at 81,709.12, trading in the range of 81,925.91 – 81,506.19, on Friday, while the Nifty 50 ended at 24,677.80, up 30.60 points or 0.12 per cent. Nifty50 hit a day’s high of 24,751.05 during intra-day trade, while the day’s low was seen at 24,620.50.

Broader markets outperformed the benchmarks, with the Nifty Midcap 100 and Nifty Smallcap 100 indices ending higher by 0.45 per cent and 0.82 per cent, respectively.

Among the sectoral indices, Auto, FMCG, Metal, PSU Bank, Consumer Durables, OMC, Healthcare and Financials ended in the green, while the remaining others settled lower.

Notably, Auto stocks eked out gains fueled by the news that Hyundai and Maruti will roll out price hikes across models from January 1, 2025.

Meanwhile, markets in the Asia-Pacific markets traded mixed as traders assessed revised economic growth data from Japan and China’s November inflation data.

Japan’s Nikkei 225 was up 0.15 per cent, while the Topix gained 0.2 per cent. Japan’s third-quarter GDP was revised to 0.3 per cent on a quarter-on-quarter basis, up from 0.2 per cent and above estimates from a Reuters poll that predicted no change.

Hong Kong Hang Seng index fell 0.28 per cent, while mainland China’s CSI 300 index was 0.2 per cent higher. China’s consumer price growth missed expectations in November, rising by 0.2 per cent year on year, down from a 0.3 per cent increase in October, according to the National Bureau of Statistics on Monday. Economists from Reuters had forecast growth of 0.5 per cent

South Korea’s Kospi was down 1.3 per cent, while the Kosdaq dropped 2.8 per cent amid the ongoing political turmoil in the country.

That apart, investors raised their bets on the prospect of a US interest rate cut this month, after payrolls data showed job growth came in roughly in line with expectations in November.

Futures markets put an 87 per cent chance on the US Federal Reserve cutting rates by 25 basis points at its next meeting on December 17-18 after the payrolls data, compared with a 68 per cent chance earlier in the session.

Nonfarm payrolls increased by 227,000 jobs last month after rising an upwardly revised 36,000 in October, in a month hit by hurricanes and strikes. Economists polled by Reuters had forecast payrolls accelerating by 200,000 jobs.

The Nasdaq and the S&P 500 rose to record closing highs on Friday. The Dow Jones Industrial Average fell 123.19 points, or 0.28 per cent, to 44,642.52, the S&P 500 gained 15.16 points, or 0.25 per cent, to 6,090.27 and the Nasdaq Composite gained 159.05 points, or 0.81 per cent, to 19,859.77. The US dollar index was little changed at 105.78.

Treasuries rallied after the data on Friday. The two-year note was last yielding 4.092 per cent, down 5.5 basis points on the day, while 10-year benchmark yields were down 4 bps at 4.141 per cent.

European stocks were also up 0.3 per cent on the day, while Britain’s FTSE 100 was flat.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan reversed earlier losses to be up 0.2 per cent thanks to a rally in Chinese shares. Chinese shares had climbed to three-week highs as investors scooped up technology shares ahead of a top-level policy meeting next week that will set the agenda and targets for China’s economy next year.

Bitcoin, which hit the $100,000 mark for the first time on Thursday as investors bet on a friendly US regulatory shift, ran into profit-taking. It tumbled as far as $92,092 and was last down 0.15 per cent on the day at $98,871.

Oil prices were higher in early Asia trade on Monday even as concerns over weak Chinese demand continued. Brent crude futures climbed by 23 cents, or 0.32 per cent to $71.35 per barrel by 7:26 AM, while US West Texas Intermediate crude futures rose by 24 cents, or 0.36 per cent to $67.44 per barrel.

Gold prices rose modestly by 0.4 per cent to $2,643 per ounce, driven by ongoing geopolitical uncertainty.