Sensex, Nifty trade lower in early deals ahead of fed meeting

Indian equity benchmarks made negative start on Monday tracking mixed cues from Asian counterparts, with the focus firmly on the U.S. Federal Reserve's December 17-18 Federal Open Market Committee (FOMC) meeting to decide key interest rates. Also, investors are eyeing November's Wholesale Price Index (WPI) inflation to be out later in the day for more directional cues. Some cautiousness came in as the Reserve Bank of India (RBI) data revealed that India’s foreign exchange reserves dropped by $3.235 billion to $654.857 billion, a five-month low, for the week ended December 6. However, markets managed to trim some of their losses and are trading lower with marginal cut amid foreign fund inflows. Foreign investors have made a strong comeback to Indian equities with a net investment of Rs 22,766 crore in the first two weeks of December driven by expectations of rate cut by the US Federal Reserve. Besides, FIIs bought shares worth Rs 2,335.32 crore on December 13. 

On the sectoral front, tourism sector stocks are in focus as World Travel and Tourism Council (WTTC) President and CEO Julia Simpson said the Indian tourism sector is expected to double in size to $523 billion in the next 10 years from the present size of $ 256 billion. Meanwhile, Swiggy and Zomato traded higher after reports that a clarification on GST input tax credit will be announced soon. Besides, Aurobindo Pharma rose after receiving a positive opinion from the CHMP of the European Medicines Agency for Zefylti (BP13), a filgrastim biosimilar.

The BSE Sensex is currently trading at 82,005.71, down by 127.41 points or 0.16% after trading in a range of 81,814.04 and 82,116.44. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.49%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Realty up by 1.84%, Industrials up by 0.51%, Capital Goods up by 0.46%, Consumer Durables up by 0.44% and Power up by 0.33%, while Metal down by 0.66%, TECK down by 0.48%, IT down by 0.33%, Oil & Gas down by 0.31% and Auto down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 0.79%, Reliance Industries up by 0.35%, ITC up by 0.23%, Bajaj Finance up by 0.07% and Ultratech Cement up by 0.06%. On the flip side, JSW Steel down by 1.48%, Titan Company down by 1.11%, Bharti Airtel down by 1.01%, TCS down by 0.83% and Nestle down by 0.76% were the top losers.

Meanwhile, after the Reserve Bank in its latest monetary policy cut growth forecast to 6.6 per cent from 7.2 per cent, Fitch Ratings has revised India’s Gross Domestic Product (GDP) forecast for 2024-25 to 6.4 per cent from its previous estimate of 7.0 per cent. Fitch also forecasts India’s GDP to expand by 6.5 per cent in 2025-26, slowing from the 8.2 per cent pace in 2023-24. However, it asserted India’s economic growth remains strong relative to that of global peers.

It said ‘The Indian economy recovered strongly from the Covid-19 pandemic shock. Although indicators point to a more mixed picture in recent months, we do not think that the softness will translate into a prolonged slump in economic activity.’ It expects domestic demand to continue driving economic growth amid a potential trade war between the US and China and a global trade slowdown.

Fitch expects policy continuity in areas that have been key growth drivers, such as the infrastructure drive, digitalisation and ease of doing business measures, even as the government follows through on fiscal consolidation. Public infrastructure capex will remain supportive of the economy and the assets that are directly deployed or related to the sector. The improved health of bank and corporate balance sheets in recent years should also pave the way for a positive investment cycle and faster capital spending.

The CNX Nifty is currently trading at 24757.65, down by 10.65 points or 0.04% after trading in a range of 24681.35 and 24781.25. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 1.85%, Shriram Finance up by 1.01%, Bajaj Finance up by 0.52%, Reliance Industries up by 0.46% and SBI up by 0.41%. On the flip side, JSW Steel down by 1.05%, Titan Company down by 0.75%, BPCL down by 0.68%, Hero MotoCorp down by 0.68% and Nestle down by 0.62% were the top losers.

Asian markets are trading mixed; Hang Seng slipped 114.33 points or 0.57% to 19,856.91, Jakarta Composite declined 32.46 points or 0.44% to 7,292.33, Nikkei 225 fell 19.1 points or 0.05% to 39,451.34 and KOSPI was down by 8.38 points or 0.34% to 2,486.08. On the other hand, Straits Times rose 8.74 points or 0.23% to 3,819.09, Taiwan Weighted added 8.64 points or 0.04% to 23,029.12 and Shanghai Composite was up by 3.23 points or 0.1% to 3,395.11.