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Informist, Wednesday, Oct. 9, 2024

By Alina Geogy

MUMBAI – Headline indices ended slightly lower Wednesday after the Reserve Bank of India's Monetary Policy Committee failed to give a clear indication on when the central bank would enter a rate-cutting cycle, analysts said. The indices had briefly risen after the central bank changed its policy stance to 'neutral' from 'withdrawal of accommodation'. However, investors were left uncertain about potential rate cuts, which likely triggered some profit-taking in the second half of the session, analysts said.

Indices extended initial gains after RBI Governor Shaktikanta Das announced the committee's decision to keep the repo rate unchanged at 6.50% and change the monetary policy's stance to 'neutral'. The announcements, which were along the expected lines, lifted the indices as much as 0.8% higher during the day.

However, the RBI governor did not give any indication whether the Monetary Policy Committee will cut rates at its next meeting in December, Amish Shah, research analyst at Taurus Corporate Advisory Services, said. While the committee highlighted inflationary challenges, geopolitical concerns, and rising global prices of commodities, investors were also eagerly hoping for some hints about when the RBI could cut interest rates, he said.

Analysts said the easing of the policy stance was positive, and the RBI appears to be on course to cut interest rates in the coming months, but there was no consensus on the timing of the cut. Some analysts hope the rate cut may happen in the December meeting, while some said it was only possible next year. 

Wednesday, the Nifty 50 ended at 24981.95 points, down 0.1%, while the BSE Sensex ended at 81467.10 points, down 0.2%. Shares of fast-moving consumer goods stocks weighed the most on the indices, while gains in select banking stocks capped the fall. The broader market indices outperformed the benchmark ones, with the Nifty mid- and small-cap indices ending around 1% higher each. Around 66% of all stocks traded on the bourses ended with gains.

Among sectoral indices, Nifty Realty and Nifty Pharma rose over 2% each and were the top gainers, while Nifty FMCG was the worst performer. The Nifty Pharma and Nifty Healthcare indices hit record highs on Wednesday. The Nifty FMCG fell nearly 2%, weighed down by shares of Nestle India and ITC which ended down 2.6% and 3.2%, respectively. Sentiment towards FMCG stock was likely dented because of lack of clarity on the timing of rate cuts by the RBI, analysts said. 

Investor sentiments were also shaped by stock ratings and commentaries by some brokerages. Shares of Divi's Laboratories gained 8% after Citi initiated coverage on the pharmaceutical firm with a 'buy' rating, and said it would be a key beneficiary of the trend toward supply chain diversification, according to news reports. Shares of State Bank of India rose 2% after Nomura Global Markets Research maintained a 'buy' rating on the stock, saying the lender is a top pick in the banking sector, and that it should continue to deliver well on asset quality.

Shares of Torrent Power, which rose nearly 7% to a record high, were among the top gainers in the Nifty 200 index. The stock rose after the company received a letter from the Maharashtra State Electricity Distribution Co. to supply a 2000-megawatt energy storage capacity. Shares of RITES ended over 8% higher and were among the top gainers in the Nifty 500 after the company signed a memorandum of understanding with Etihad Rail to explore cooperation in developing railways and related infrastructure services in the United Arab Emirates and around the region.

Shares of The Phoenix Mills ended up over 4% after the company gave a strong quarterly update for Jul-Sept. Nuvama Institutional Equities said it was confident about the company's long-term growth prospects owing to its leadership in retail real estate and unique understanding of the Indian consumer's psyche coupled with the revival in urban consumption.

* Of the Nifty 50 stocks, 27 rose and 23 fell

* Of the Sensex stocks, 14 rose and 16 fell

* On the NSE, 1,910 stocks rose, 882 fell, and 82 were unchanged

* On the BSE, 2,705 stocks rose, 1,248 fell, and 96 were unchanged

* Nifty FMCG: down 1.6%; Nifty Energy: down 0.8%; Nifty Realty: up 2.2%

BSE                                               NSE

Sensex: 81467.10, down 167.71 points or 0.21%     Nifty 50: 24981.95, down 31.20 points or 0.12%

End

Edited by Saji George Titus

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