More Stories

Informist, Monday, Sep 16, 2024

By Anshul Choudhary

MUMBAI – Benchmark indices ended with muted gains today as domestic investors have a conservative view about the US Federal Reserve's policy decision on Wednesday and they largely ignored overnight gains in the US markets. Market analysts in India still expect a 25 basis point rate cut by the US Fed, even though investors in the US have raised their bets on a 50 basis point rate cut.

Stocks from the banking, energy, and infrastructure sectors were the major gainers and helped Sensex end at a fresh closing high. The 30-share index closed at 82988.78 points, up 97.84 points or 0.1%. The Nifty 50 settled at 25383.75 points, up 27.25 points or 0.1%. The index ended just 5.15 points lower from its lifetime closing high. 

"Data suggest there is case for no rate cut (in US) as well because if you see their producer price index growth, there is still demand...prices are increasing...but there is euphoria around at least 25 rate cut, so that might happen," Dharmesh Kant, head of equity research at Cholamandalam Securities, said.

The CME FedWatch Tool shows that odds of a larger rate cut have increased after former president of the Federal Reserve Bank of New York, Bill Dudley, favoured a 50 bps cut and as US consumer sentiment improved in September. The odds of a 50-bps rate cut are now 59%, up from 30% a week ago.

Gains in a few index-heavyweight stocks helped the benchmark indices touch fresh intraday lifetime highs. Shares of Larsen & Toubro and ICICI Bank rose around 1% each, and those of HDFC Bank gained 0.3%. Banks are expected to benefit from higher money supply as interest rates come down later, analysts said. However, gains were muted on concerns that net interest margins of banks may come down due to lower rates, affecting their profitability in the near term.

Shares of metal companies also gained as they are likely to benefit from a fall in the dollar index and lower interest rates in the future. Today, markets ignored weak cues from China, where industrial output in August grew lower than expectations, raising concerns about demand for metals from China. Shares of Hindalco Industries rose 1.8% and those of JSW Steel gained 1.7%. Shares of energy companies also rose, with NTPC up 2.4% and Coal India up 0.6%.

Gains were capped today as some of the major fast-moving consumer goods stocks were down after the government raised customs duty on crude palm oil, soybean oil, and sunflower seed oil to 20% from nil. Further, customs duty on refined palm oil, soybean oil, and sunflower oil was hiked to 32.5% from 12.5%.

The hike in basic customs duty on these edible oils will increase the raw material cost for FMCG companies and put pressure on their gross margins, Seth said. It will likely have a 25 bps quarter-on-quarter negative impact on their margins in Oct-Dec, Seth added. Shares of Hindustan Unilever fell 2.3%, those of Britannia Industries fell 1.1%, and those of ITC ended 0.5% lower. Among others, shares of Tata Consumer Products and Nestle India closed 0.7% lower each.

Several non-banking financial services saw profit booking with Bajaj Finance down over 3%. Further, shares of housing finance companies declined after freshly listed Bajaj Housing Finance made a stellar debut. Shares of Bajaj Housing Finance ended 136% higher at 165 rupees on their listing. In comparison, peers PNB Housing Finance, LIC Housing Finance, and Can Fin Homes fell 3-7%.

Mid-cap stocks fared better than large-caps and the Nifty Midcap 150 rose 0.3%. Shares of BSE were the top gainers and rose over 18%. The stock gained sharply after SEBI disposed of proceedings against NSE in an alleged co-location case. As per media reports, this can be seen as a boost to remove a major roadblock to NSE's much-awaited initial public offering plans from 2016, which were derailed following the co-location controversy.

Among other mid-caps, shares of Dixon Technologies rose 7% on a healthy outlook. This month, the company signed a memorandum of understanding with Asus India and HP India to manufacture products such as notebooks, desktops. Shares of a few information technology companies witnessed profit booking, with KPIT Technologies down 3.7%.

Within smallcaps, shares of rice exporters surged after the government scrapped the minimum export price on basmati rice. Shares of Kohinoor Foods hit the 20% upper limit and closed at 46.83 rupees and those of KRBL and LT Foods rose 6.0-6.5%. By scrapping the minimum export price, the government wants to give a boost to exports and reduce domestic stocks of basmati rice, Ajay Kedia, founder and director of Kedia Advisory, said. He said this will help improve rice the topline of exporters.

* Of the Nifty 50 stocks, 26 rose and 24 fell

* Of the Sensex stocks, 15 rose and 15 fell

* On the NSE, 1,450 stocks rose, 1,352 fell, and 88 were unchanged

* On the BSE, 2,151 stocks rose, 1,957 fell, and 93 were unchanged

* Nifty Media: up 1%; Nifty Energy: up 0.8%; Nifty FMCG: down 0.7%

BSE                                               NSE
Sensex: 82988.78, up 97.84 points, or 0.1%        Nifty 50: 25383.75, up 27.25 points, or 0.1%

End

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.