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Informist, Thursday, Dec. 12, 2024

By Anjana Therese Antony

MUMBAI – The fall in banking, fast-moving consumer goods, and oil and gas stocks offset the rise in information technology peers, pushing the overall market slightly lower. Analysts said investors added short positions on the day of expiry of options contracts Thursday on expectation of further weakness in the market for the near term. The slightly bearish approach of investors comes amid expensive valuations of the domestic market, selling by foreign investors, and economic slowdown, among others. However, the medium-term outlook remains positive, primarily on expectations of strong pickup in the government's capital expenditure cycle, analysts said.

The Nifty 50 closed 0.4% lower at 24548.70 points and the BSE Sensex ended 0.3% lower at 81289.96 points. The near-term support for the 50-stock index is pegged at 24500-24480 points and resistance at 24600-24650 points, according to two technical and derivatives analysts. 

The US inflation data for November, which came in line with the market expectations, boosted hopes of further rate cut in the US next week. The US Federal Reserve is scheduled to meet on Dec. 17-18 and is widely expected to reduce the federal fund rate by 25 basis points to 4.25-4.50%. According to the CME FedWatch Tool, there is a whopping 99% possibility for a 25-bps cut in US interest rates. This boosted the sentiment towards Indian IT companies who have huge exposure to the US. The Nifty IT was one among the only two sectoral indices in the green, down 0.8% higher with all constituents up.

Index heavyweight Reliance Industries, which has a weightage of 8.09% in the Nifty 50, closed lower for the fifth consecutive session Thursday, falling over 4% during this time. Bloomberg, attributing sources, had reported that the company is in talks with multiple banks seeking loans worth INR 255 billion to refinance its debt due next year. 

Among other laggards in the oil sector was Bharat Petroleum Corp., which closed 1.7% lower, and Indian Oil Corp., which ended 1.2% lower. The fall in oil-related companies in the Nifty 50 contributed to an over 0.1% fall in the 50-stock index Thursday. 

HSBC Global Research said that global oil price, refining and petrochemical margins are likely to remain weak and the outlook does not look very promising. "India's own petroleum product demand is slowing...We also expect India O&G (oil and gas) companies to start their investment phase in energy transition led by renewables, early stage green hydrogen blending and investment preparation for green hydrogen," it said in its report.

FMCG was among the other sectoral laggards Thursday amid a slightly weak outlook on demand for the December quarter. The Nifty FMCG index was the second-most laggard and closed 1.1% lower, with most constituents down. The fall in FMCG stocks also contributed to a 0.1% downside of the Nifty 50. 

Most Adani group stocks closed higher after the Director of the Federal Bureau of Investigation Christopher Wray said he will resign from his position before Donald Trump takes over in January. Reports said Indian-origin Kash Patel will be the next director of the FBI. The news came amid the ongoing litigation in the US against the group chairman. Having an Indian-origin official in the US under the new administration is seen as positive news, an analyst at a domestic broking firm said.

Adani Enterprises and Adani Ports and Special Economic Zone closed higher by 1.9% and 0.8%, respectively. Other stocks under the conglomerate such as Adani Total Gas, Adani Energy Solutions, Adani Power, and Adani Green Energy ended 1.8-6.1% higher. On other hand, Ambuja Cements and ACC closed around 1% lower each. 

Among specific stocks, Chalet Hotels surged and closed nearly 10% higher at INR 1,017 on the National Stock Exchange. Axis Securities said the hospitality industry's upcycle is expected to be a long and sustained one. Upcoming events such as the World Cup hockey or Kabaddi championships could enhance occupancies in the upcoming quarters, the broking firm said in its report. The leisure segment is already driving business in the hotel industry, leading us to believe that the aforementioned factors will benefit the Indian hotel sector in the coming quarters, it said. 

* Of the Nifty 50 stocks, 16 rose and 34 fell

* Of the Sensex stocks, 12 rose and 18 fell

* On the NSE, 896 stocks rose, 1,904 fell, and 73 were unchanged

* On the BSE, 1,481 stocks rose, 2,517 fell, and 107 were unchanged

* Nifty FMCG: down 1.1%; Nifty Oil & Gas: down 0.9%; Nifty IT: up 0.8%

BSE                                               NSE

Sensex: 81289.96, down 236.18 points or 0.29%     Nifty 50: 24548.70, down 93.10 points or 0.38%        

End

Edited by Akul Nishant Akhoury

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