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Informist, Monday, Dec. 23, 2024

By Alina Geogy

MUMBAI – The benchmark equity indices ended higher Monday after softer-than-expected US inflation data eased some concerns regarding inflation in the world's largest economy and even fuelled some expectations of more rate cuts than the US Federal Reserve signalled last week. The rise was led by gains in most heavyweight stocks, in contrast with last week, when disappointment over a likely slowdown in policy easing in the US had dragged these stocks sharply down.

Following a positive opening, the Nifty 50 rose as much as 1.2% to an intraday high of 23869.55 points in the early part of the session. However, the 50-stock index gave up some of these gains and closed at 23753.45 points, up 0.7%. The BSE Sensex closed at 78540.17 points, up 0.6%. Both indices snapped a five-day losing streak during which both fell nearly 5%. The India VIX, the fear gauge of the market, closed at 13.52, down 10% from the previous close of 15.07, indicating some decrease in market concerns. 

A rise in the key indices mirrored the rise in global indices as investors across the US and Asian equity markets found some respite in the US personal consumption expenditures data for November. The US Personal Consumption Expenditures Price Index rose 2.4% on year in November, slightly lower than the 2.5% expected by a Reuters poll. The rise in the domestic indices came on the back of "a rally in global markets after the Federal Reserve's preferred inflation measure showed its slowest growth since May", Vikas Jain, head of research at Reliance Securities, said in a note.

The data revived hope that the Fed could cut rates by more than 50 basis points in 2025, unlike what it recently suggested. Early Thursday, the Fed had shared a hawkish outlook for future rate cuts, which sent global indices sharply down in the last two sessions. In fact, the Fed, in its statement just last week, had said that inflation "remains somewhat elevated" even though it has made progress toward its 2% target.

Shares of HDFC Bank, up nearly 2%, were the top contributors to the rise in the Nifty 50. Shares of Reliance Industries and ITC were also among the major gainers. On the other hand, shares of automotive manufacturers Maruti Suzuki, Hero MotoCorp, and Tata Motors were the major laggards. Shares of information technology firms Tata Consultancy Services and HCL Technologies were also among the worst hit.

Most sectoral indices ended higher, with Nifty Realty and Nifty Bank, up over 1% each, being the top gainers. On the other hand, Nifty Media and Nifty Auto, down 0.4% and 0.1% respectively, were the worst hit. All the Nifty mid-cap indices were slightly higher, with the Nifty Midcap 50 index, up 0.5%, being the top gainer. The Nifty mid-cap indices also snapped a four-day losing streak. Meanwhile, the Nifty small-cap indices underperformed the benchmarks. The Nifty Smallcap 250 index was down 0.4%. Over 58% of all stocks traded on the NSE ended lower.

Shares of insurance companies were among the laggards in early trade, but some recovered later. Investors sold these stocks after the Goods and Services Tax Council Saturday deferred a recommendation by the Group of Ministers to lower the 18% GST imposed on life and health insurance premiums. Shares of General Insurance Corp. of India, ICICI Lombard General Insurance, and HDFC Life Insurance Co. closed down 4.1%, 2.1%, and 0.2%, respectively.

Shares of India Cements closed 8% higher and were among the best performing Nifty 500 constituents. The Competition Commission of India had late Friday approved UltraTech Cement's proposed acquisition of 32.72% stake in India Cements. The commission also approved UltraTech Cement's acquisition of up to 26% stake in India Cements through an open offer. Shares of Sterling and Wilson Renewable Energy closed up 5.5% after the company received an order worth INR 12 billion to design, engineer, procure, and construct a balance-of-system 500-megawatt solar power project in Gujarat.

Shares of several steel companies rose after the Directorate General of Trade Remedies initiated an anti-dumping investigation into the imports of certain steel products. Shares of JSW Steel rose over 2% and were the top gainer in the Nifty 50 index. Steel Authority of India and Jindal Steel & Power rose 4.4% and 3.6%, respectively, and were the other major gainers from the sector.

* Of the Nifty 50 stocks, 37 rose and 13 fell

* Of the Sensex stocks, 22 rose and 8 fell

* On the NSE, 1,130 stocks rose, 1,703 fell, and 86 were unchanged

* On the BSE, 1,636 stocks rose, 2,452 fell, and 130 were unchanged

* Nifty Realty: up 1.5%; Nifty Bank: up 1.1%; Nifty Media: down 0.4%

BSE                                               NSE

Sensex: 78540.17, up 498.58 points or 0.6%        Nifty 50: 23753.45, up 165.95 points or 0.7%

End

Edited by Rajeev Pai

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