Key gauges end marginally higher on Wednesday

Indian equity benchmarks ended Wednesday's choppy session marginally in green as investors exercised caution ahead of the RBI's monetary policy announcement on Friday. The December meeting is significant against the backdrop of slowest growth in gross domestic product (GDP) in seven quarters - 5.4 per cent in July-September, much lower than the central bank's projection of 7 per cent. After making a slightly positive start, key gauges extended gains led by firm global cues, and foreign institutional investors (FIIs) slowly returning to buying ways, or at least slowing down their continuous selling of Indian equities. According to exchange data, Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth Rs 3,664.67 crore. 

However, in the afternoon deals, key indices erased initial gains and fell sharply as traders turned cautious with Commerce and Industry Minister Piyush Goyal’s statement that the long voyage time due to ships taking longer routes through Cape of Good Hope has impacted global trade, including Indian exports. This has resulted in increased time for goods to reach international markets. But markets recouped losses to end marginally in green as traders took support with a business survey showed growth in India's dominant services sector remained strong in November despite the steepest rise in prices for over a decade, while consistent demand led to a significant rise in business sentiment and record hiring. The HSBC final India Services Purchasing Managers' Index, compiled by S&P Global, stayed almost unchanged at 58.4 in November from 58.5 in October, but was lower than a preliminary estimate of 59.2. Meanwhile, the Lok Sabha has passed the Banking Laws (Amendment) Bill, 2024, which allows bank account holders to have up to four nominees in their accounts. Another proposed change relates to redefining 'substantial interest' for directorships, which could increase to Rs 2 crore instead of the current limit of Rs 5 lakh, which was fixed almost six decades ago. The Bill piloted by Finance Minister Nirmala Sitharaman was approved by a voice vote.

On the global front, European markets were trading mostly in green after Eurozone November final services PMI was confirmed at 49.5 versus 49.2 preliminary. Asian markets settled mostly higher on Wednesday despite political uncertainties in France and South Korea. Investors awaited this week's key U.S. jobs report and Fed Chair Jerome Powell's remarks for clues on whether officials will cut interest rates in December. Back home, on the sectoral front, stocks related to aviation sector were in focus with Rating agency ICRA’s report that domestic air passenger traffic is projected to rise 7-10 per cent to 164-170 million in the current fiscal year (FY25), while the aviation industry's loss is pegged at Rs 2,000-3,000 crore during the same period.  

Finally, the BSE Sensex rose 110.58 points or 0.14% to 80,956.33, and the CNX Nifty was up by 10.30 points or 0.04% to 24,467.45.       

The BSE Sensex touched high and low of 81,245.39 and 80,630.53 respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.83%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Realty up by 2.13%, Bankex up by 0.91%, Consumer Durables up by 0.69%, PSU up by 0.67% and Industrials up by 0.59%, while Auto down by 0.67%, FMCG down by 0.61%, Telecom down by 0.51%, Energy down by 0.42% and Metal down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.82%, NTPC up by 1.41%, Bajaj Finserv up by 1.32%, TCS up by 1.25% and Titan Company up by 1.01%. On the flip side, Bharti Airtel down by 2.17%, Tata Motors down by 1.61%, Adani Ports &SEZ down by 1.53%, Power Grid Corporation down by 1.44% and Maruti Suzuki down by 1.30% were the top losers.

Meanwhile, India’s services sector growth eased in the month of November, impacted by slowdown in new orders and output along with prices pressures. Input costs rose to the greatest extent in 15 months, while selling prices increased at the fastest rate in close to 12 years. Besides, total sales increased at a softer pace than in October, but the respective seasonally adjusted index was nevertheless more than four points above its long-run average and consistent with robust growth.

According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index eased to 58.4 in November from 58.5 in October. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also slowed down to 58.6 in November as against 59.1 in October. The report noted that service providers signaled sharper cost pressures than manufacturers, and subsequently recorded the steeper increase in selling prices.

To accommodate for rising intakes of new business, services firms continued to expand their operating capacities through recruitment drives. Besides, service companies in India observed another upturn in business expenses midway through the third fiscal quarter, amid higher food and labour costs. The rate of inflation was sharp, the strongest in 15 months and above its long-run average.

Meanwhile, service providers were more confident regarding the year-ahead outlook for business activity. Confidence reached its highest level since May, boosted by predictions of continued demand strength and expectations that marketing efforts will drive new business.

The CNX Nifty traded in a range of 24,573.20 and 24,366.30. There were 20 stocks advancing against 30 stocks declining on the index. 

The top gainers on Nifty were HDFC Life Insurance up by 2.52%, HDFC Bank up by 1.67%, Bajaj Finserv up by 1.42%, Apollo Hospital up by 1.38%, NTPC up by 1.37% and On the flip side, Bharti Airtel down by 2.28%, Cipla down by 2.21%, Bajaj Auto down by 1.77%, Tata Motors down by 1.63% and Adani Ports &SEZ down by 1.62% were the top losers. 

European markets were trading mostly in green; France’s CAC rose 23.01 points or 0.32% to 7,278.43 and Germany’s DAX gained 165.19 points or 0.83% to 20,181.94, while UK’s FTSE 100 decreased 28.1 points or 0.34% to 8,331.31.

Asian markets settled mostly higher on Wednesday after US central bankers said they continue to believe inflation is heading down to their 2% target and signalled support for further interest rate cuts ahead, while investors are awaiting US jobs data and remarks from Federal Reserve Chair Jerome Powell for additional clarity on the US rate outlook. Japanese shares gained marginally after data showed Japan's service activity swung back to growth in November. However, Seoul shares declined as President Yoon Suk Yeol declared martial law in a dramatic move and lifted the decree hours later, plunging the country into political chaos. Chinese and Hong Kong shares fell after data showed China's services activity expanded at a slower pace in November, and as traders waited to see whether China will unveil more economic stimulus measures at a key policy meeting later this month.