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Informist, Wednesday, Dec. 18, 2024

By Anjana Therese Antony

MUMBAI – Shares of pharmaceutical and information technology companies emerged as the outliers Wednesday when the overall market fell for the third consecutive session. Analysts said that the market has factored in a further reduction in federal fund rates by 25 basis points and that investors exercised caution on uncertainty about future interest rate trajectory in the US. 

The Nifty 50 and the BSE Sensex ended 0.6% lower each at 24198.85 points and 80182.20 points, respectively. The near-term support for the 50-stock index is pegged at 24000-23950 points and resistance at 24250-24280 points. However, the fall in India VIX, the gauge which measures the near-term nervousness in the market, indicated that there are no major worries in the market. The volatility gauge ended 0.8% lower at 14.3725.

Amid the overall weakness in the market, investors turned some focus to defensive sectors such as pharmaceuticals, making it one among the few sectoral outliers on Wednesday. The Nifty Pharma closed 1.1% higher, with 17 out of 20 constituents in the green. Shares of Aurobindo Pharma closed 2.9% higher at INR 1,247.55 on the National Stock Exchange amid the bullish approach towards the sector. The rise also came despite the company's subsidiary getting two observations from the US Food and Drug Administration for its manufacturing facility in Telangana. 

IT stocks, which fell in the previous two sessions, rose a day before the US Fed's policy outcome. Analysts said that valuations of IT companies remain expensive and that December quarter earnings are not expected to bring major surprises, though the next financial year is seen to be better for the sector. Shares of Wipro gained the most in the sector and closed 1.2% higher at INR 312.60. The sector was among the major sectoral laggards in the previous two sessions. However, the absence of major triggers after the Fed's outcome is expected to keep shares of IT companies in a tight range in the coming weeks, analysts said.

The overall market has been feeling the heat of the slowdown in GDP growth, expensive valuations, depreciation of the rupee, and disappointing earnings growth. However, the remaining part of the financial year is expected to be better as investors are increasingly betting on a pick-up in the government's spending. On Tuesday, Finance Minister Nirmala Sitharaman said that the pace of the government expenditure has picked up after the September quarter. 

Adding to the woes were the bearish approach of foreign as well as domestic investors. FIIs, who aggressively sold equities in October and November, continued to offload shares in December. They net sold equities worth INR 64.1 billion on Tuesday and analysts said FIIs likely sold on Wednesday as well. 

Shares of mining companies declined after the Karnataka government tabled a bill in the state assembly to levy tax on iron ore mining. The move by the Karnataka government follows a Supreme Court judgement that allowed state governments to levy tax on minerals. The Karnataka government expects to generate additional revenue of over INR 47 billion from the tax. NMDC was the major laggard in the mining space and closed 6% lower after hitting a one-month low. Hindalco Industries and JSW Steel were among other laggards in the mining space and closed 1-2% lower. 

When it comes to new listings, shares of all three companies that debuted Wednesday--Vishal Mega Mart, Sai Life Sciences, and One Mobikwik Systems--closed higher. Sai Life Sciences closed over 39% higher at INR 764.65, Vishal Mega Mart ended 43.5% higher at INR 111.93, and One Mobikwik closed a whopping 89% up at INR 528. 

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

* Of the Sensex stocks, 8 rose and 22 fell

* On the NSE, 878 stocks rose, 1,922 fell, and 80 were unchanged

* On the BSE, 1,441 stocks rose, 2,564 fell, and 94 were unchanged

* Nifty Media: down 2.2%; Nifty PSU Bank: down 1.9%; Nifty Pharma: up 1.1%

BSE                                               NSE

Sensex: 80182.20, down 502.25 points or 0.62%     Nifty 50: 24198.85, down 137.15 points or 0.56%        

End

US$1 = INR 84.95

Edited by Akul Nishant Akhoury

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