Benchmarks end lower on Friday; Nifty settles below 18,500 mark

Indian equity benchmarks ended lower by over half percent on Friday pressured by heavy selling in IT, Tech and Realty stocks despite a positive trend in the global markets. Key gauges made slightly positive start, as traders took some support with report that India Inc expects private capex to gain further momentum in the short to medium term, as it sees green shoots of revival in sectors like real estate, construction, logistics and chemicals, among others. But, markets soon reversed gains and slipped into red terrain, as rising crude oil prices and relentless foreign capital outflows weighed on sentiment. As per exchange data, Foreign Institutional Investors (FIIs) were net sellers in capital markets as they offloaded shares worth Rs 1,131.67 crore on Thursday.

Indian indices came under heavy selling pressure in the second half as sentiments got hit with a private report that the Reserve Bank of India’s curb on securitising loans having residual maturity of less than 365 days may hit the sale of short-term advances like micro-finance, personal loans and gold loans for a while. Traders paid no heed towards report stated that India consumer price inflation likely cooled to a nine-month low of 6.40% in November mainly due to a moderation in food prices. Traders also took a note of Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal’s statement that India will have to face global competition effectively to achieve the goal of becoming a prosperous and developed nation.

On the global front, Asian markets ended mostly higher on Friday and European markets were trading in green as China's drastic policy shift towards relaxing many of its quarantine and testing requirements raised hopes of improved consumer demand. A cautious undertone prevailed as investors braced for key U.S. inflation data due later in the day and next week's FOMC rate decision. The Federal Reserve is widely expected to raise rates by 50 bps and signal that rate hikes could continue for longer than expected in the face of stubborn inflation.

Back home, power stocks were in focus as power deficit or gap between electricity required and supplied has fallen from two per cent in April this year to 0.1 per cent. Aviation industry stocks also were in watch as credit ratings agency Icra said domestic air passenger volume increased 3 per cent to 23.4 million in November on a sequential basis propelled by resilient travel demand and onset of the peak holiday season.

Finally, the BSE Sensex fell 389.01 points or 0.62% to 62,181.67 and the CNX Nifty was down by 112.75 points or 0.61% to 18,496.60.

The BSE Sensex touched high and low of 62,735.42 and 61,889.11, respectively. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.45%, while Small cap index was down by 1.00%.

The few gaining sectoral indices on the BSE were FMCG up by 0.71%, Healthcare up by 0.15%, Consumer Durables up by 0.13% and Bankex up by 0.09%, while IT down by 2.98%, TECK down by 2.46%, Realty down by 1.54%, Metal down by 1.15% and Energy down by 1.11% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 2.24%, Titan Company up by 1.20%, Sun Pharma up by 1.20%, Dr. Reddy's Lab up by 1.00% and Indusind Bank up by 0.88%. On the flip side, HCL Technologies down by 6.72%, Tech Mahindra down by 3.58%, Infosys down by 3.15%, Wipro down by 2.39% and TCS down by 1.72% were the top losers.

Meanwhile, the Ministry of Road Transport and Highways (MoRTH) has set a target of constructing 12,200 kilometres of national highways during 2022-23, against which 4,766 kilometres have been constructed till November, 2022.

The road transport and highways minister Nitin Gadkari said under Bharatmala Pariyojana, apart from development of highways/ expressways in the country, which facilitate logistic efficiency to India economy, 35 Multi Modal Logistics Parks (MMLPs) are to be developed. These MMLPs would act as major cargo consolidation and distribution hubs.

According to the minister, under Bharatmala Pariyojana 191 points of congestion were identified on the entire network.  He said of the 191 choke points, de-congestion projects have already been completed in 56 congestion points and de-congestion projects are under implementation in 83 congestion points. The work on remaining 52 congestions points will be awarded for construction by the financial year 2024-25. He added that a total 14,32,294 trees have been cut/uprooted to construct national highways in the country during the last three years.

The CNX Nifty traded in a range of 18,664.70 and 18,410.10. There were 27 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Nestle up by 2.30%, Sun Pharma up by 1.24%, ITC up by 1.06%, Dr. Reddy's Lab up by 1.01% and Titan Company up by 1.00%. On the flip side, HCL Technologies down by 6.50%, Tech Mahindra down by 3.48%, Infosys down by 3.08%, Wipro down by 2.37% and TCS down by 1.81% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 12.63 points or 0.17% to 7,484.80, France’s CAC was up by 5.82 points or 0.09% to 6,653.13 and Germany’s DAX rose 54.21 points or 0.38% to 14,318.77.

Asian markets ended mostly higher on Friday, tracking overnight gains in Wall Street ahead of US inflation data and Fed’s interest rate decision. The US Federal Reserve is widely expected to raise rates by 50 basis points (bps) next week to cool off inflation. Chinese shares gained after the country loosened some its Covid-19 restrictions, while Hong Kong shares climbed as China inflation data came in roughly in line with expectations. Data showing that consumer prices in China were up 1.6%, while producer prices dropped 1.3% year on year in November. Meanwhile, Chinese property developer Sunac China Holdings said it has unveiled plans to restructure more than $9 billion of its offshore debt as it tries to navigate out of the deep crisis engulfing the Chinese real estate sector, also supported market sentiments.