More Stories

Informist, Thursday, Nov. 7, 2024

By Alina Geogy

MUMBAI – The Indian market's euphoria over Donald Trump's victory in the US presidential elections proved to be extremely short-lived – just one day, actually. Thursday, the Nifty 50 erased all the gains it had chalked up Wednesday as did the Sensex, almost. Investors are now likely worried about emerging markets taking a hit because foreign investors may focus on the US where the growth prospects appear much more rosy than before Trump was elected president, analysts said.

Trump's win is a negative for emerging markets, the vice-president of research at a domestic brokerage said. A likely reduction in corporate taxes in the US may boost the profitability of companies, and this makes the US market more appealing to foreign portfolio investors, he said. Trump might bring about stability in the policy environment in the US, and he is also capitalist-minded in a way, which would give a fillip to companies in the world's largest economy, he said.

The optimism surrounding corporate growth in the US after Trump's win may push global investors to shift money to the US from emerging markets, ditching the 'sell India-buy China' approach seen last month, analysts said. Monthly sales by foreign portfolio investors in the domestic market had already hit record highs in October, at around $10 billion. This trend of overseas investors selling in the domestic market has not waned, and has been denting investor sentiment, analysts said. High valuations, a slowdown in earnings growth for the September quarter, and the rise in US Treasury yields are also factors that analysts blamed for the decline in the market. From an Indian market perspective, the fear is that 'sell India-buy China' may be replaced with 'sell India-buy US', analysts said.

Selling in the market, particularly in banking, metal, and heavyweight stocks, took the Nifty 50 down to as much as 24179.05 points, down over 300 points or 1.3%, during the day. Losses in shares of Reliance Industries, ICICI Bank, HDFC Bank, and Trent weighed the most on the index. The 50-stock index finally closed at 24199.35 points, down 284.70 points or 1.2%, with 45 constituents in the red. The BSE Sensex closed at 79541.79 points, down 836.34 points or 1%. Both indices snapped a two-day winning streak.

Financial markets are expected to see higher volatility in the near term with a change in the government in the US, Reserve Bank of India Deputy Governor T. Rabi Sankar said at the Business Standard BFSI Summit Thursday. He also said there was a need to look beyond this near-term volatility as the long-term impact of the US elections will depend on how tariffs and global trade are affected in Trump's presidency.

In an exact reversal of the trend in the last session, all sectoral indices ended down Thursday, barring one which was largely unchanged. The Nifty Metal and Nifty Pharma indices fell 2.7% and 1.7%, respectively, and were the worst hit among sectoral indices. The broader market also joined in the decline, but the fall was smaller as compared to the benchmarks. The Nifty mid- and small-cap indices fell 0.4%-1.1%.

Shares of most pharmaceutical companies fell over uncertainty about health and drug approval-related policy changes in the US. This comes after Trump said Robert F. Kennedy Jr., a well-known critic of vaccines and advocate against Big Pharma, would play a significant role in decisions related to health policies in Trump's administration.

Among the Nifty 50 stocks, Hindalco Industries fell 8.5% and closed at its lowest level in over a month after its US-based subsidiary Novelis reported an 18% on-year fall in net income for the September quarter. Trent fell sharply and ended down 6.5% after the company reported lower-than-expected growth in revenue for the September quarter.

On the flip side, investors rewarded shares of Apollo Hospitals Enterprise and took them up nearly 7% to an all-time high after the company reported impressive earnings for the September quarter. The hospital chain operator's consolidated net profit and revenue for Jul-Sept beat all six brokerage firms' estimates available with Informist. The stock was the top gainer among the five in the green in the Nifty 50 index.

Investors also reacted to global index provider MSCI's quarterly index rejig announcement earlier in the day. Shares of BSE gained 4% after MSCI added the stock to its global standard indices. Shares of Adani Energy Solutions fell over 10% after MSCI said it would not alter the stock's weightage as part of its quarterly rejig.

Shares of Shyam Metalics and Energy turned negative and ended down nearly 3% after the company said its consolidated net profit for the September quarter fell over 55% on year. Shares of NCC surged after the company said its net profit for Jul-Sept rose over two-fold on year.

* Of the Nifty 50 stocks, 5 rose and 25 fell

* Of the Sensex stocks, 2 rose and 28 fell

* On the NSE, 1,083 stocks rose, 1,716 fell, and 79 were unchanged

* On the BSE, 1,821 stocks rose, 2,134 fell, and 98 were unchanged

* Nifty Metal: down 2.7%; Nifty Pharma: down 1.7%; Nifty PSU Bank: flat

BSE                                               NSE

Sensex: 79541.79, down 836.34 points or 1%        Nifty 50: 24199.35, down 284.70 points or 1.2%

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.