Sensex, Nifty witness sharp fall in early noon deals

Indian equity benchmarks witnessed a sharp fall in early afternoon deals, with both Sensex and Nifty extending their losses, on the back of selling in all sectors except Capital Goods counter along with negative cues from other Asian markets amid signs of escalating geopolitical tensions in the Middle East and uncertainty over the pace of U.S. interest-rate cuts this year. Traders got cautious, amid a private report stating that the growing Indian economy is creating jobs, but mainly for the unskilled and semi-skilled workers. Graduates and those having higher qualifications, even with technical degrees and diplomas, are witnessing employment generation at a slow pace.  

On the global front, Asian markets were trading mostly in red, as Japan's industrial production contracted more than initially estimated in February. The final data from the Ministry of Economy, Trade, and Industry showed that industrial production fell 0.6 percent on a monthly basis, though much slower than the 6.7 percent decline in January. In the initial estimate, the rate of decline was 0.1 percent. The data showed that shipments dropped 0.7 percent from the previous month, and the inventory ratio slid by 5.6 percent. Meanwhile, inventories grew by 0.6 percent.

Back home, on the sectoral front, auto stocks were in watch, as maintaining a neutral outlook for the auto sector for FY25, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has forecasted a domestic sales volume growth rate of 6%-9% during FY25 as against growth rate of 12%-14% in FY24. According to the report, the personal mobility segments namely passenger vehicles (PVs) and two wheelers (2Ws) would continue to grow, though at moderated rates, driven by improving consumer sentiments and higher disposable income.

The BSE Sensex is currently trading at 74398.63, down by 639.52 points or 0.85% after trading in a range of 74378.55 and 74951.88. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined by 0.05%, while Small cap index down by 0.17%.

The only gaining sectoral index on the BSE was Capital Goods up by 0.17%, while Consumer Durables down by 1.27%, Healthcare down by 0.90%, TECK down by 0.90%, FMCG down by 0.89% and IT down by 0.89% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 0.79%, Indusind Bank up by 0.40%, NTPC up by 0.18% and Nestle up by 0.08%. On the flip side, Sun Pharma down by 3.65%, Titan down by 2.42%, Maruti Suzuki down by 2.06%, Infosys down by 1.57% and Tech Mahindra down by 1.50% were the top losers.

Meanwhile, Confederation of Indian Industry (CII) President R Dinesh has said that the Centre and states need to come together to pursue big-ticket reforms in labour and land sectors to accelerate growth. He said a survey by CII expects the Reserve Bank of India (RBI) to cut benchmark interest growth in the second quarter (July-September) of FY25. The RBI has been holding the repo rate at 6.5 per cent since February 2023. 

He highlighted the importance of building a consensus across all states. Towards this, he said, CII has suggested, a structure which can make the Centre and the states work together to work on big-ticket reforms. A ‘GST-type federal structure’ can make the Centre and the states work together to work on big-ticket reforms. Elaborating on the capital expenditure by the private sector, he said while its percentage continues to be the same, and CII survey on capacity utilisation revealed all major sectors are estimated to have levels above 75 per cent. 

He said ‘if you look at private capex spend I think it is important for us to understand that the percentage of private capex continues to be the same...we are between 36-37 per cent, so it is happening, it is not that it is not happening at all, the rate of growth of that capex may not be same as the rate of growth of government spending’. Emphasizing that the RBI has been ‘very correctly and nicely’ managing the balance between inflation and growth requirements of the country, he said, ‘as an industry body we did a survey where we saw that by Q2 of FY25 the expectation is that you will actually see a reduction in interest rates happening.’

The CNX Nifty is currently trading at 22575.20, down by 178.60 points or 0.78% after trading in a range of 22569.05 and 22726.45. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 0.98%, Eicher Motors up by 0.97%, Bajaj Auto up by 0.74%, Divi's Lab up by 0.66% and Indusind Bank up by 0.42%. On the flip side, Sun Pharma down by 3.80%, Titan down by 2.30%, Maruti Suzuki down by 1.95%, Cipla down by 1.80% and Apollo Hospital Ent. down by 1.78% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 333.4 points or 1.95% to 16,761.63, Taiwan Weighted lost 16.65 points or 0.08% to 20,736.57, Straits Times fell 7.55 points or 0.23% to 3,220.06, Shanghai Composite weakened 13.93 points or 0.46% to 3,020.32 and KOSPI dropped 25.14 points or 0.94% to 2,681.82, while Nikkei 225 surged 80.92 points or 0.2% to 39,523.55.