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Informist, Thursday, Feb. 27, 2025

By Akshita Kumar

MUMBAI – Headline indices ended flat Thursday after a choppy trading session. While a decline in select automobile stocks and a sharp fall in shares of UltraTech Cement led the markets to give up early gains, a rise in shares of financial services companies after the Reserve Bank of India eased risk weight rules for non-banking finance companies limited the decline. 

"The market is not discounting any good news but the gains are not sustaining. This is due to the pessimistic sentiment in the market," Amish Shah, research analyst at Taurus Corporate Advisory Services, said. Further, the uncertainty regarding US President Donald Trump's policies is causing damage to the market, Shah said.

On Thursday, the Nifty 50 ended at its lowest level in eight months at 22545.05 points, down 2.5 points. The BSE Sensex closed at 74612.43 points, up 10.31 points. Broader market indices ended down with mid-cap indices down 0.8-1.3% and small-cap indices down 1.4-1.7%. 

Among stocks, shares of cement major UltraTech Cement closed at an eight month low of INR 10,447.65. The stock ended down ended 4.7%, extending its losses for the seventh straight session. Post market hours Tuesday, the company announced its entry into the wires and cables segment with a planned capital expenditure outlay of INR 18 billion over the next 2 years. Its entry into the wires and cables segment is expected to have a modest impact on the sector, contributing less than 5% to the total industry by 2027-28 (Apr-Mar) or later, brokerage Nuvama Institutional Equities said in a research report.

Post the UltraTech announcement, shares of other wires and cables companies such as Polycab India and Havells India ended down 19% and 6.2%. Shares of KEI Industries and RR Kabel ended down 20% each. UltraTech aims to gain market share in the wires and cables segment through this expansion, which may increase competition in the sector, an analyst tracking the sector at a domestic broking firm said. This will restrict profitability of the existing players in this segment, he said.

Among the few Nifty 50 stocks in the automobile sector, Bajaj Auto, Tata Motors, and Mahindra & Mahindra ended down almost 2%. Shares of Bajaj Auto and Tata Motors fell for the fourth consecutive session, and were down 4.6% and 6%, respectively during this period. 

Shares of financial services companies such as Shriram Finance, Bajaj Finserv, and Bajaj Finance ended up 2.6-5.7%. The stocks rose after the RBI Tuesday reduced risk weights of bank loans to non-banking finance companies and for microfinance loans. However, gains in banks were muted as lower risk weights are expected to come into effect only in the next financial year starting April. "Growth, in our view, is likely to take time as lenders are yet to fully recognize the stress, and the cycle would take time to reverse," Kotak Institutional Equities said in note.

Shares of some private banks such as IndusInd Bank, HDFC Bank, and Axis Bank ended up over 1-1.2%. Shares of AU Small Finance Bank and CreditAccess Grameen, which have significant exposure in the microfinance segment closed higher by 6% and 12%, respectively. Shares of Cholamandalam Investment also ended up 5%.

Among sectoral indices, Nifty Financial Services, Nifty Metal, Nifty Bank, and Nifty Private Bank ended up 0.2-0.6%. Nifty Media, Nifty Realty, Nifty Auto ended down 1.5-3.6%, and were the worst-hit sectoral indices.

* Of the Nifty 50 stocks, 18 rose and 32 fell

* Of the Sensex stocks, 13 rose and 17 fell

* On the NSE, 571 stocks rose, 2,292 fell, and 73 were unchanged

* On the BSE, 943 stocks rose, 3,030 fell, and 99 were unchanged

* Nifty Media: down 3.6%; Nifty Realty: down 2.1%; Nifty Financial services: up 0.6%

BSE                                               NSE

Sensex: 74612.43, up 10.31 points                 Nifty 50: 22545.05, down 2.50 points 

End

Edited by Tanima Banerjee

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