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Informist, Tuesday, Dec. 31, 2024

By Anshul Choudhary

MUMBAI – The Nifty 50 ended flat in the final session of 2024 with the overall returns during the year at nearly 9%. Concerns about a prolonged earnings slowdown, high valuations and selling by foreign investors continued to affect market sentiments, leading the Nifty 50 to close in the red for the third straight month in December.

The slowdown in earnings has been a major worry since the dismal earnings of the September quarter, along with outflows by foreign investors, which began after a surge in US bond yields in October. "There has been selling by FPIs... also, a slew of IPOs have taken a lot of money out," Alok Churiwala, managing director of Churiwala Securities said. 

Foreign portfolio investors net bought Indian equities worth INR 170 billion this month till Monday, but it was not enough to offset the record selling of over INR 1 trillion in October and November, data from the National Securities Depository showed. Overall, foreign flows in 2024 were weak with net inflows of only INR 20 billion so far till Monday compared with net inflows of INR 1.7 trillion in 2023.

The Nifty 50 ended the year at 23644.80 points, almost unchanged from Monday. This is the third straight month of decline for the index, which has fallen 8% during this period. The BSE Sensex closed 0.1% down at 78139.01 points.

Information technology companies were among the worst-hit stocks on Tuesday, with Tech Mahindra down 2% and Tata Consultancy Services and Infosys down close to 1.5% each. Concerns about high valuations have led to some corrections in these stocks recently at a time when December quarter earnings are largely seen as muted due to seasonal factors. Owing to this, Nifty IT has declined nearly 6% from the lifetime high touched over two weeks ago.

Shares of Adani Enterprises fell over 2% on Tuesday after gaining nearly 11% in the previous four sessions. Financials were weak, with Shriram Finance, Bajaj Finance, and SBI Life Insurance Co declining around 1% each. Index-heavyweight ICICI Bank also fell nearly 1%, adding to the weakness in the overall market.

The fall in IT stocks and other large-caps was offset by slight gains in select heavyweights such as ITC, Reliance Industries and Larsen & Toubro. Shares of ITC rose over 1% ahead of the record date for issuing shares of its demerged hotels business, which is on Friday.

Brokerage Sharekhan expects ITC's stock price to adjust by INR 20-22 as the hotels business gets listed as a separate entity. The brokerage expects ITC Hotels' initial price discovery to be in the range of INR 150-170 per share. It has a 'buy' rating on ITC with a target price of INR 595, which is not yet adjusted for hotel business demerger.

There was some buying in Oil and Natural Gas Corp and Coal India, which were among the worst hit Nifty 50 constituents this month. ONGC rose nearly 3% and Coal India gained 1.7%, but were still down 7% and 8%, respectively, this month.

Shares of pharmaceutical and healthcare companies helped indices rise briefly, but came off highs later in the session as concerns about high valuations pushed investors to book profits. The Nifty Pharma index was up 0.7% on Tuesday, gaining nearly 4% in the last four sessions.

Shares of pharmaceutical stocks have been the top gainers this month, with Dr Reddy's Laboratories, Apollo Hospitals Enterprise, and Sun Pharmaceutical Industries up 6-15% this month. Owing to this, Nifty Pharma gained over 5% this month.

While benchmark indices failed to post gains Tuesday, small-cap indices managed to recover from the intraday losses, with the Smallcap 250 ending 0.7% higher. Among small-caps, shares of Avanti Feeds rose nearly 14% after InCred Equities put out a strong outlook for the industry in 2025. CNBC-TV18 reported that Incred expects a strong recovery in the shrimp industry in 2025, driven by global demand and reduced competition from Ecuador, where overproduction led to industry consolidation.

* Of the Nifty 50 stocks, 28 rose and 22 fell

* Of the Sensex stocks, 15 rose and 15 fell

* On the NSE, 1,779 stocks rose, 1,050 fell, and 73 were unchanged

* On the BSE, 2,321 stocks rose, 1,647 fell, and 111 were unchanged

* Nifty Oil & Gas: up 1.1%; Nifty Pharma: up 0.7%; Nifty IT: down 1.4%

BSE                                               NSE

Sensex: 78139.01, down 109.12 points or 0.1%      Nifty 50: 23644.80, down 0.10 points

End

US$1 = INR 85.62

Edited by Saji George Titus

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