Sensex down 300 pts at 77,850; Broader mkts fall 1%; Cons Dur, IT stks weigh most

Indian benchmark equity indices BSE Sensex and Nifty50 were trading lower on Wednesday, amid muted global cues.

At 10 AM, the BSE Sensex was lower by 129.93 points, or 0.17 per cent, at 78,069.18, and the Nifty50 was at 23,670.15, down 37.75 points, or 0.16 per cent.

Higher benchmark Treasury yields, better-than-expected services sector activity in December, and a surprise jump in new job openings amid slower hiring in the US converged to boost prospects of fewer rate cuts by the Federal Reserve going forward, while dragging down Wall Street benchmarks down overnight.

In that backdrop, investors here are likely to tread carefully, while looking for pockets of value as India Inc. begins reporting its December quarter results.

However, with growth in the Indian economy estimated to slow to a four-year low of 6.4 per cent in FY25, falling short of the Reserve Bank of India’s (RBI’s) projection of 6.6 per cent, according to the First Advance Estimates released on Tuesday by the National Statistics Office (NSO), might weigh on sentiment. In FY24, gross domestic product (GDP) had grown at 8.2 per cent.

Separately, driven by a slowdown in government capital expenditure and sluggish private investments, growth in infrastructure investment is expected to moderate in the current financial year (FY25) compared to FY24, according to the first Advance Estimates of gross domestic product (GDP) for FY25. However, a pick up in rural spending may lead to higher overall consumption growth in FY25 compared to FY24.

With regard to the markets, Aditya Birla Sun Life Mutual Fund (ABSL MF) said in its outlook for 2025 that in a year that is poised to be one of macroeconomic turbulence, investors should consider asset allocation strategies to capitalise on gains in all asset classes while reducing risks. The asset manager estimates fixed income investments to deliver around 8-9 per cent and precious metals like gold and silver are forecast to generate returns between 8-12 per cent. The fund house foresees equity market returns to moderate but still deliver 8-12 per cent returns. READ MORE

Moreover, net profit of 19 listed banks for the quarter ended December 2024 (Q3FY25) is likely to grow at a modest pace of 9.7 per cent year-on-year (Y-o-Y). This is owing to pressure on margins, moderation in credit off-take, along with some increase in credit costs, according to analysts’ estimates.

That apart, Indian information technology (IT) service providers are expected to post an improvement in revenues on a year-on-year (Y-o-Y) basis for the December quarter of the current financial year (Q3FY25). The top four IT firms — Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro — are likely to grow between 0.1 per cent and 7 per cent Y-o-Y in Q3FY25, according to Bloomberg consensus estimates.

In other news, the National Stock Exchange (NSE) is set to add six more stocks in the F&O segment, with effect from January 31, 2025. The stocks to be added are Castrol India, Gland Pharma, NBCC, Phoenix Mills, Solar Industries and Torrent Power.

In the mainline section of the primary markets, meanwhile, Standard Glass Lining Technology Limited IPO will see its last day of subscription, and Quadrant Future Tek Limited IPO and Capital Infra Trust InvIT will see their second day of bidding.

In the SME section, shares of Leo Dry Fruits and Spices Trading Ltd IPO will list on the bourses, and Fabtech Technologies Cleanrooms Limited IPO will see its basis of allotment get finalised today. Indobell Insulation Limited IPO will be open for subscription for the last day today, while Avax Apparels And Ornaments Limited IPO, Delta Autocorp Limited IPO, and B.R.Goyal Infrastructure Limited IPO will enter their second day of subscription.

In the previous trading session, Indian benchmark equity indices ended the trading session in positive territory. The BSE Sensex added 234.12 points or 0.30 per cent to settle at 78,199.11, while the Nifty50 settled in the green at 23,707.90 with gains of 91.85 points or 0.39 per cent.

Among the broader markets, small-cap shares outperformed others, with the Nifty Smallcap100 ending up 1.35 per cent, and the Nifty Midcap100 index ending with gains of 0.89 per cent.

All the sectoral indices, barring Nifty IT, ended in the green on Tuesday. Among them, Nifty Metal, select healthcare, and Media indices ended with gains of over 1 per cent each. The Oil & Gas index was the top gainer, closing with gains of 1.64 per cent.

Elsewhere, markets in the Asia-Pacific region were mostly lower amid losses on Wall Street, while South Korea and Australia climbed.

Japan’s Nikkei 225 was 0.8 per cent lower, while the Topix lost 0.82 per cent. South Korea’s Kospi rose 0.29 per cent and the Kosdaq Index was marginally lower by 0.1 per cent.

Australia’s S&P/ASX 200 was trading higher by 0.39 per cent.

Hong Kong’s Hang Seng index was lower by 0.28 per cent, while the CSI 300 had shed 0.83 per cent. The Shanghai Composite was lower by 0.47 per cent.

On Tuesday, global stocks lost ground while US Treasury yields edged higher after data showed the American economy remained resilient, indicating the Federal Reserve could cut interest rates fewer times this year than the market had been expecting.

On Wall Street, all three main indices finished lower, with technology, consumer discretionary, and communication services stocks among the biggest losers. Energy and healthcare stocks advanced.

US services sector activity accelerated in December, beating expectations, while a measure of prices paid for inputs rose to a nearly two-year high, according to data from the Institute for Supply Management.

Labor Department data also showed US job openings unexpectedly increased in November, although a softening in hiring pointed to a slowing labor market.

Markets are currently pricing in the probability of just one Fed cut in 2025, down from two rate cuts in December, according to the CME FedWatch tool.

The Dow Jones Industrial Average fell 0.42 per cent to 42,528.36, the S&P 500 fell 1.11 per cent to 5,909.03 and the Nasdaq Composite fell 1.89 per cent to 19,489.68.

European stocks held their gains after rallying on Monday following a report saying President-elect Donald Trump’s aides are considering narrower tariffs than previously thought.

The European STOXX 600 index rose 0.32 per cent for its second consecutive gain. It rose 1.75 per cent on Monday following the report on tariffs, which caused shares of automakers to rally. MSCI’s gauge of stocks across the globe fell 0.75 per cent to 846.52.

Benchmark 10-year Treasury yields hit an eight-month high, buoyed by data showing the US economy remained strong. The yield on 10-year notes rose 7.5 basis points to 4.691 per cent, having peaked at 4.699 per cent, the highest since April 26.

The dollar index, which measures the greenback against a basket of currencies,rose 0.33 per cent to 108.67.

Oil prices settled higher, driven by concerns over limited supply from Russia and Iran because of Western sanctions and expected higher Chinese demand. Brent crude futures settled up 0.98 per cent at $77.05 a barrel. US West Texas Intermediate (WTI) crude finished at $74.25 a barrel, up 0.94 per cent.

Spot gold rose 0.53 per cent to $2,649.38 an ounce. U.S. gold futures settled 0.7 per cent higher at $2,665.40.