Sensex, Nifty trade lower with notable losses in early deals

Indian equity benchmarks made cautious start on Thursday as investors weigh the implications of Donald Trump's return to presidency. U.S. Republicans are projected to retake control of the Senate for the first time in four years, but control of the House remains up for grabs. It is feared the global economy may face potentially detrimental shocks to growth and inflation if Trump implements the kind of import tariffs he had pledged. Inflationary pressures resulting from his actions might push up the dollar and bond yields and could further impact FII inflows into India in the short term. As per NSE data, Foreign Institutional Investors (FII) were net sellers of Indian equities worth Rs 4,445.59 crore on November 06. Soon, Sensex and Nifty extend their losses and are trading lower with cut of around half a percent each in early deals. Some cautiousness came in as SBI report said they see Q2 real GDP growth slowing down further to 6.5 per cent in the September quarter of this fiscal year. However, broader indices - BSE Mid & Small cap indices are outperforming larger peers with notable gains.

On the global front, Asian markets are trading mostly higher following the broadly positive cues from Wall Street overnight, as traders celebrated Donald Trump's victory in the presidential election. Traders also await the US Fed's interest rate decision later in the day, and look forward to the accompanying statement for clues about the likelihood of future rate cuts.

Back home, Oil & gas stocks are in limelight as Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said India’s petrochemical sector is on track to touch $300 billion next year, with the potential to reach upwards of $1 trillion in 2040. In stock specific development, Apollo Hospitals zoomed, hits lifetime high after stellar Q2 results.

The BSE Sensex is currently trading at 80015.64, down by 362.49 points or 0.45% after trading in a range of 79904.60 and 80563.42. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.24%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 0.66%, Telecom up by 0.54%, Oil & Gas up by 0.49%, Energy up by 0.41% and PSU up by 0.39%, while Metal down by 0.85%, Basic Materials down by 0.61%, Consumer Durables down by 0.57%, Bankex down by 0.41% and IT down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.17%, Tata Motors up by 0.22%, NTPC up by 0.15%, JSW Steel up by 0.14% and Bharti Airtel up by 0.13%. On the flip side, Ultratech Cement down by 1.52%, Bajaj Finserv down by 1.29%, Sun Pharma down by 1.02%, Bajaj Finance down by 0.94% and ICICI Bank down by 0.90% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has clarified that changing the monetary policy stance to ‘neutral’ does not mean a rate cut in the central bank’s next policy announcement. He said ‘It should not be assumed that we have done this, so therefore the next step is a rate cut. A change in stance doesn’t mean that the next step is a rate cut, in the very next meeting. It’s not so’. The RBI has not changed interest rates for nearly two years but has adopted a neutral stance in its policy statement in October. This has sparked speculation of a likely rate cut in the next policy.

hinting at significant upside risks to inflation expectations, he said the next course of action has to be taken very carefully. According to the RBI, significant risks include continuing geopolitical conflicts, geo-economic fragmentation, climate and weather-related risks, and commodity prices going up. He had said in his monetary policy statement last month that September and October inflation prints were expected to be higher. September retail inflation came at 5.5 per cent.

He asserted that ‘I reiterate it again today, October inflation, CPI numbers are again going to be very high, perhaps higher than the September number. So, therefore, we had warned it in my monetary policy statement’. The RBI monetary policy committee’s shift to ‘neutral’ indicates that it is open to adjusting interest rates based on economic conditions. Before that, the stance had been ‘withdrawal of accommodation’, meaning a more restrictive monetary policy stance where the central bank aims to reduce the money supply in the economy to contain inflation.

The CNX Nifty is currently trading at 24366.95, down by 117.10 points or 0.48% after trading in a range of 24326.40 and 24503.35. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 7.12%, Tata Steel up by 1.16%, Coal India up by 0.88%, Tata Motors up by 0.20% and NTPC up by 0.15%. On the flip side, Hindalco down by 6.81%, Adani Enterprises down by 2.59%, Ultratech Cement down by 1.61%, Cipla down by 1.45% and Bajaj Finserv down by 1.41% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted jumped 259.03 points or 1.12% to 23,476.41, Hang Seng surged 237.62 points or 1.16% to 20,776.00, Straits Times rose 64.39 points or 1.79% to 3,667.38, Shanghai Composite strengthened 29.66 points or 0.87% to 3,413.47 and KOSPI was up by 9.62 points or 0.38% to 2,573.13. On the other hand, Nikkei 225 slipped 156.74 points or 0.4% to 39,323.93 and Jakarta Composite was down by 77.85 points or 1.05% to 7,306.02.