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EQUITY
Key gauges end marginally lower amid volatility
Dec-24-2024

Indian equity benchmarks ended marginally lower in the volatile session on Tuesday dragged by Metal, Power and Utilities stocks. After making slightly positive start, key indices turned volatile as traders seemed reluctant to make more significant moves ahead of a market holiday on Wednesday for Christmas. However, key gauges gained some traction in late morning deals as traders took support with data showing that retail inflation for farm workers and rural labourers dipped to 5.35 per cent and 5.47 per cent in November compared to 5.96 per cent and 6 per cent, respectively, in October this year. Some support also came with Union Agriculture Minister Shivraj Singh Chouhan’s statement that the Centre and state governments are working on a new scheme to help farmers transport the farm produce to other states and markets. He added the contribution of the farm sector to the country's GDP is 18 per cent, and the government is working on many areas to further strengthen the sector. 

Markets managed to keep their heads above water in afternoon deals, taking support from report that the government of India and the Asian Development Bank (ADB) has signed a $500 million (about Rs 4,250 crore) loan to support green and sustainable infrastructure projects aligned with the country's climate commitments. Traders took note of Saurabh Garg, secretary, Ministry of Statistics and Programme Implementation’s statement that India needs to leverage data and make data-driven decisions if it wants to achieve a higher rate of growth. However, profit booking in late afternoon deals erased all the intraday gains to close marginally lower. FII outflows also weighed on the markets. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 168.71 crore, according to exchange data.

On the global front, European markets were trading in green ahead of Christmas break. Asian markets settled mostly higher on Tuesday following the broadly positive cues from Wall Street, as traders seemed reluctant to make more significant moves amid what is likely to be a quiet week due to the Christmas Day holidays. Optimism about more interest rate cuts by the U.S. Fed next year is aiding market sentiment. Back home, on the sectoral front, sugar stocks were in watch with a private report that sugarcane yields in India are declining due to last year's drought and this year's excessive rains, which could reduce the country's sugar production below consumption levels for the first time in eight years.

Finally, the BSE Sensex fell 67.30 points or 0.09% to 78,472.87, and the CNX Nifty was down by 25.80 points or 0.11% to 23,727.65.           

The BSE Sensex touched high and low of 78,877.36 and 78,397.79 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 0.09%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.59%, FMCG up by 0.58%, Auto up by 0.53%, Energy up by 0.52% and Telecom up by 0.40%, while Metal down by 0.93%, Power down by 0.73%, Utilities down by 0.52%, Consumer Durables down by 0.50% and TECK down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.92%, ITC up by 0.86%, Nestle up by 0.69%, Mahindra & Mahindra up by 0.62% and TCS up by 0.57%. On the flip side, Power Grid Corporation down by 1.62%, SBI down by 1.11%, Titan Company down by 0.98%, Tata Steel down by 0.95% and Indusind Bank down by 0.93% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the Indian data centre industry’s capacity is set to more than double to 2-2.3 GW by fiscal 2027, attributing to increased digitalisation in the economy. Enterprises are increasingly investing in cloud storage. Further, it stated the rising penetration of Generative Artificial Intelligence (GenAI) is expected to drive the demand over the medium term. The rapid advancement of GenAI, which requires higher computational power and low latency than traditional cloud computing functions, will also provide a tailwind to the data centre demand in India.

It asserted that the industry can expect healthy and stable cash flows, which will keep players’ credit profiles steady. A data centre is typically a large group of networked servers used by organizations for the remote storage or distribution of large amounts of data. Data localization plans are expected to trigger investments in data centres, besides incentives by various states to attract such investments.

Data centres cater to the computing and storage infrastructure demand, which is driven by two primary drivers. One, enterprises are rapidly shifting their businesses to digital platforms, including the cloud, a trend that has accelerated post Covid-19 pandemic. Two, increased accessibility of high-speed data has led to a surge in internet usage, including social media, over-the-top (OTT) platforms and digital payments. Besides, it said mobile data traffic logged a compound annual growth rate (CAGR) of 25 per cent over the last five fiscals. It stood at 24 GB per month at end-fiscal 2024 and is expected to rise to 33-35 GB by fiscal 2026.

The CNX Nifty traded in a range of 23,867.65 and 23,685.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.79%, Adani Enterprises up by 1.41%, Eicher Motors up by 1.04%, Nestle up by 0.86% and BPCL up by 0.85%. On the flip side, Power Grid Corporation down by 1.68%, JSW Steel down by 1.41%, SBI Life Insurance down by 1.28%, Titan Company down by 1.12% and Infosys down by 1.09% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 41.19 points or 0.51% to 8,143.91 and France’s CAC rose 40.37 points or 0.56% to 7,312.69.

Asian markets settled mostly higher on Tuesday tracking Wall Street gains overnight after the release of mixed US economic reports. Data showing that a measure of US consumer confidence deteriorated in December, while new home sales rebounded and core capital goods orders increased in November. Chinese and Hong Kong shares gained after China’s finance ministry reaffirmed it will increase public spending with a greater focus on boosting consumption to support the economy next year. However, Japanese shares fell as Finance Minister Katsunobu Kato reiterated Tokyo's discomfort over excessive foreign exchange moves, while the BoJ’s meeting minutes revealed that policymakers agreed in October to keep raising interest rates if the economy moves in line with their forecast. South Korean shares declined marginally after data showed South Korea's consumer sentiment dropped sharply this month to hit the weakest level in more than two years, while the country's main opposition party said it will start impeachment proceedings against Prime Minister and Acting President Han Duck-soo.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,393.53

42.27

1.25

Hang Seng

20,098.29

215.16

1.07

Jakarta Composite

7,065.75

-30.70

-0.43

KLSE Composite

1,602.99

6.79

0.43

Nikkei 225

39,036.85

-124.49

-0.32

Straits Times

3,769.55

17.22

0.46

KOSPI Composite

2,440.52

-1.49

-0.06

Taiwan Weighted

23,120.24

15.70

0.07
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