Sensex, Nifty trade under pressure on last trading session of 2024

Indian equity benchmarks made gap-down opening on Tuesday, the last trading session of 2024, amid weak global cues, as several international markets were closed on New Year's Eve, making for thin trading around the world. Also, there are no major triggers for the stock markets, domestic as well as globally. Sensex and Nifty are trading lower with over half a percent cut in early deals amid foreign fund outflows. FIIs/FPIs net sold stocks worth Rs 1,893.16 crore. Traders are concerned as the data released by the Finance Ministry showed that India's external debt rose to $ 711.8 billion as of September this year, up 4.3 per cent over June 2024. Investors are eyeing India’s infrastructure output data for the month of November to be released later in the day for more directional cues.

On the global front, Asian markets are trading mixed, following the broadly negative cues from Wall Street overnight, as traders are worried US President-elect Donald Trump's protectionist trade policies will likely push up inflation next year. Some traders are also taking profits going into the end of the year. Japanese and South Korea stock markets are closed for New Year's Eve holiday. Markets in Singapore and Hong Kong will close early for the holiday.

Back home, banking stocks are in focus as the Reserve Bank said the asset quality of banks improved further, and their gross non-performing assets (GNPA) or bad loans ratio declined to a 12-year low of 2.6 per cent in September 2024 on the back of falling slippages and steady credit demand. In stock specific development, Lupin gained as it acquired Huminsulin in India from Eli Lilly and company, a move aimed at strengthening its diabetes portfolio.

The BSE Sensex is currently trading at 77785.71, down by 462.42 points or 0.59% after trading in a range of 77732.18 and 77997.49. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.77%, while Small cap index was down by 0.59%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.26%, PSU up by 0.20%, Metal up by 0.01%, while IT down by 2.15%, TECK down by 1.79%, Realty down by 1.20%, Consumer Durables down by 0.76% and Utilities down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.41%, SBI up by 0.58%, Tata Steel up by 0.22%, Sun Pharma up by 0.19% and Tata Motors up by 0.08%. On the flip side, Tech Mahindra down by 2.45%, Infosys down by 2.40%, TCS down by 2.14%, HCL Technologies down by 1.77% and Zomato down by 1.66% were the top losers.

Meanwhile, facing criticism from the government over the central bank prioritising inflation over growth, the new Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that prospects of the Indian economy are expected to improve on the back of high consumer and business confidence in 2025. Malhotra in foreword to the Financial Stability Report said ‘As we strive to preserve financial stability to support a higher growth path for the Indian economy, our focus remains steadfast on maintaining stability of financial institutions and, more broadly, systemic stability’. He further said that despite the global uncertainties Indian economy is expected to pick up pace in the second half of the current financial year. Notwithstanding the uncertainties shrouding the global macro-financial ethos as it unfolds, prospects for the Indian economy are expected to improve after the slowdown in the pace of economic activity in the first half of 2024-25.

He said ‘Consumer and business confidence for the year ahead remain high and the investment scenario is brighter as corporations step into 2025 with robust balance sheets and high profitability’. He further said that financial sector regulators in India too are intensifying reforms and sharpening their surveillance against the backdrop of the soundness of the financial system bolstered by robust earnings, low levels of impaired assets and strong capital buffers, as this report highlights. He said stress test results reveal that capital levels of the banking system as well as of the Non-banking Financial Companies (NBFCs) sector will remain well above the regulatory minimum even under adverse stress scenarios. He said ‘We continue to secure and anchor public trust and confidence to support India's aspirational goals. We remain committed to developing a modern financial system that is customer-centric, technologically leveraged and financially inclusive’.

Referring to the global economy, he said it exhibits resilience in the face of formidable headwinds from political and economic policy uncertainty, persisting conflicts and an environment of fragmenting international trade and tariffs. Brightening the global prospects is the likelihood that the decline in inflation will continue and align with targets during the year ahead, allowing purchasing power to recover. He said as monetary policy gains headroom to further support economic activity, financial conditions can be expected to remain easy and contribute to an improvement in the trajectory of global GDP from a prolonged phase of low growth, and added that robust labour market and sound financial system too provide congenial conditions for this turnaround.

However, he said the medium-term outlook remains challenging, with downside risks from possible intensification of geopolitical conflicts, sporadic financial market turmoil, extreme climate events and rising indebtedness. He added stretched asset valuations, fragilities in the less regulated non-bank financial intermediaries, and threats from new and emerging technologies also add to the evolving uncertain outlook.

The CNX Nifty is currently trading at 23516.55, down by 128.35 points or 0.54% after trading in a range of 23508.40 and 23584.50. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 1.40%, Kotak Mahindra Bank up by 1.31%, ONGC up by 1.23%, SBI up by 0.63% and Tata Steel up by 0.24%. On the flip side, Infosys down by 2.40%, Adani Enterprises down by 2.09%, TCS down by 2.02%, Tech Mahindra down by 1.95% and Wipro down by 1.68% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 202.04 points or 0.87% to 22,988.16, Shanghai Composite weakened 20.18 points or 0.6% to 3,387.15 and Straits Times fell 7.55 points or 0.2% to 3,788.18. On the other hand, Hang Seng rose 64.71 points or 0.32% to 20,106.13 and Jakarta Composite was up by 43.33 points or 0.62% to 7,079.90.