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Informist, Monday, Dec. 2, 2024

By Anshul Choudhary

MUMBAI - Benchmark equity indices rose Monday despite disappointing growth in India's GDP for the September quarter. The gains were driven by hope of better economic growth in the second half of this financial year, led by more spending by the government, analysts said. The market also expects a boost from the Reserve Bank of India policy this week after weaker-than-expected GDP growth.

"The weak GDP growth was already discounted, considering this comes with a lag after auto numbers, latest earnings, and IIP (Index of Industrial Production) data, which had pointed to a slowdown," said Narendra Solanki, head of fundamental research at Anand Rathi-Investment Services. Data released on Friday showed India's GDP growth in Jul-Sept fell sharply to a seven-quarter low of 5.4%.

However, the lower-than-expected GDP growth has raised hope that the RBI will provide some relief in terms of liquidity in the banking system, HSBC said in a report. Looking at the weak growth, some analysts even said a cut in interest rates at the December monetary policy meeting was on the cards.

The Nifty 50 and the Sensex recovered from a fall in early trade to close 0.6% higher each at 24276.05 points and 80248.08 points, respectively. Shares of index heavyweights such as Infosys, Reliance Industries, and ICICI Bank rose 0.5-1.3%. Gains in pharmaceutical, healthcare, and cement stocks also helped indices end higher.

Shares of Reliance Industries rose after the government scrapped the windfall gains tax, or special additional excise duty, on domestic petroleum crude production, exports of aviation turbine fuel, petrol and diesel. The stock closed 1.3% higher at INR 1,309.15, but still down over 20% from its lifetime high touched in July.

Shares of cement companies were among the top gainers with UltraTech Cement ending 4% higher amid market buzz that these companies are likely to soon take a decision on raising prices. Shares of Sagar Cements, JK Cement, Andhra Cements, and Grasim Industries rose 3-7%. Demand for cement is expected to improve going forward, driven by more project announcements in Oct-Mar by the government, an analyst tracking the sector at a domestic broking firm said.

Shares of life insurance companies extended their fall amid worries of more regulations. There are concerns that Insurance Regulatory and Development Authority of India is considering capping bancassurance business, which may lead to downgrades. Shares of HDFC Life fell sharply in November, down nearly 9%. Monday, the stock fell 2.7% to end at INR 640.20.

Gains in real estate, city gas, and cement companies helped broader market indices outperform benchmark indices with the Nifty Midcap 150 up nearly 1%. Within the mid-cap companies, shares of Dixon Technologies rose over 6% after the company said its wholly-owned subsidiary Padget Electronics plans to produce Google Pixel smartphones. 

Shares of real estate companies rose with Godrej Properties, Prestige Estates, and The Phoenix Mills up 3.7-4.0% on healthy outlook in terms of demand. The Nifty Realty was the top gainer among sectoral indices, gaining over 3% to end at 1051.20 points--its highest level in over one month.

Nuvama Institutional Equities said the number of housing units in Mumbai rose 5% on year to 10,216 units last month, which is the highest-ever for the month of November. "A robust launch trajectory and potential rate cuts are likely to improve sales in Mumbai going ahead. This shall benefit Mumbai-based players Lodha, Oberoi, Godrej Properties, Rustomjee and Sunteck," it said.

Some Adani group companies lost steam after gaining for three straight sessions. Gains in Adani Green Energy were muted, while Adani Energy Solutions and Adani Total Gas fell 4-5% after three days of rise.

* Of the Nifty 50 stocks, 33 rose and 17 fell

* Of the Sensex stocks, 21 rose and 9 fell

* On the NSE, 1,804 stocks rose, 1,043 fell, and 77 were unchanged

* On the BSE, 2,508 stocks rose, 1,550 fell, and 179 were unchanged

* Nifty Realty: up 3%; Nifty Healthcare: up 1.3%; Nifty PSU Bank: down 0.2%

BSE                                               NSE

Sensex: 80248.08, up 445.29 points or 0.6%        Nifty 50: 24276.05, up 144.95 points or 0.6%

End

Edited by Avishek Dutta nad Vandana Hingorani

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