FMCG, Oil, financial stocks drag Sensex 200pts to 77,500; Nifty at 23,500

Benchmark Indian equity indices BSE Sensex and Nifty 50 were trading higher on Thursday.

At 11 AM, the BSE Sensex was lower by 50 points, or 0.07 per cent, at 77,640, while the Nifty 50 was flat at 23,558.

Following the opening bell, more than half the stocks on the BSE Sensex were trading in the green, with gains led by HCLTech (up 1.31 per cent), followed by Sun Pharma, Tata Steel, Reliance Industries, and HDFC bank, while losses were capped by Power Grid Corp (down 2.09 per cent), followed by UltraTech Cement, Mahindra & Mahindra, Adani Ports & SEZ, and Axis Bank.

On the Nifty 50, 34 out of 50 stocks were trading in the green. Gains were led by Eicher Motors (up 6.50 per cent), followed by

HCLTech, Tata Steel, Axis Bank, and Bajaj Finance. Losses were capped by UltraTech Cement (down 1.01 per cent), followed by BPCL, NTPC, Bharti Airtel, and Titan.

Across sectors, meanwhile, all indices barring FMCG were trading higher. The Realty index was ahead by 1.18 per cent,

followed by the Media index. Other notable gainers included PSU Bank, Pharma, Metal, Healthcare and Auto indices.

In the broader markets, the Nifty Midcap 100 was ahead by 0.66 per cent, and the Nifty Smallcap 100 was higher by 1.18 per cent.

With US inflation figures for October rising but coming in-line with expectations, anticipation of another rate cut by the Federal Reserve at its next meeting in December were strengthened somewhat, but the pace and quantum of cuts after that was still up for debate in the backdrop of Donald Trump’s plans to impose tariffs on trading partners.

Domestic markets entered into correction territory on Wednesday, with the benchmark Nifty and the broader market indices — Nifty Midcap 100 and Nifty Smallcap 100 — declining more than 10 per cent from their all-time highs.

The Nifty 50 ended Wednesday’s session at 23,559, down 324 points, or 1.4 per cent, while the Sensex closed at 77,691, a decline of 984 points, or 1.3 per cent. Since the record highs of September 26, the Nifty has declined 10.14 per cent, while the Sensex is down 9.5 per cent.

The broader markets also settled in the red, with Nifty Smallcap 100 and Nifty Midcap 100 falling 2.96 per cent and 2.64 per cent, respectively.

India’s risk gauge, the VIX, ended higher by 5.03 per cent at 15.33 points.

Market breadth was fairly negative with 5 declining stocks for every advancing share on the BSE.

All the sectoral indices also closed in the red, with Nifty PSU Bank and Realty indices facing the worst heat and ending lower by over 3 per cent each. This was followed by Bank Nifty, Auto, Media, Metal, Private Bank, and Select Healthcare indices, which ended down by over 2 per cent each.

In another development, stock exchanges on Wednesday announced the addition of 45 stocks to the new list of scrips eligible for trading in the futures and options (F&O) segment, including Zomato, Jio Financial, Paytm, Delhivery, and Avenue Supermarts. The new entrants will be available for trading in the F&O segment from November 29, the exchanges said.

Two large-cap-oriented mutual fund (MF) offerings — flexi-cap funds and large-cap funds — witnessed a spike in investor interest in October amid the decline in the equity market. Both categories logged their all-time high inflows last month.

In contrast, the fast-moving consumer goods (FMCG) sector is losing its status as a defensive sector.

Historically, FMCG stocks have outperformed in a falling market, providing downside protection to portfolios. However, during the current market selloff, the FMCG index has underperformed the broader market. The National Stock Exchange (NSE) Nifty FMCG Index is down 13.6 per cent since the end of September, when the equity market peaked, compared to a 8.7 per cent decline in the benchmark NSE Nifty 50 during the same period.

That apart, markets in the Asia-Pacific region were mixed on Thursday morning.

Australia’s S&P/ASX 200 was up 0.38 per cent, while Japan’s Nikkei 225 gained 0.42 per cent and the Topix added 0.59 per cent.

South Korea’s Kospi advanced 0.27 per cent, and the Kosdaq Index gained 0.59 per cent.

Hong Kong’s Hang Seng index was higher by 0.15 per cent but mainland China’s CSI300 was down by 0.36 per cent and the Shanghai Composite was down by 0.09 per cent.

However, a gauge of global stocks fell for a second straight session on Wednesday and longer-dated US Treasury yields rose in choppy trading as investors assessed the latest US inflation data and the path of interest rates from the Federal Reserve.

The Labor Department said the consumer price index rose 0.2 per cent for the fourth straight month, in line with expectations of economists polled by Reuters. In the 12 months through October, the CPI advanced 2.6 per cent, also matching forecasts, after climbing 2.4 per cent in September.

Treasury yields fell after the news, but rebounded to pressure equities. The benchmark US 10-year note yield rose 1.6 basis points to 4.449 per cent after falling as low as 4.361 per cent after the CPI report.

On Wall Street, stocks closed slightly higher as the inflation data likely kept the Fed on track to cut rates in December.

The Dow Jones Industrial Average rose 47.21 points, or 0.11 per cent, to 43,958.19, the S&P 500 advanced 1.39 points, or 0.02 per cent, to 5,985.38 and the Nasdaq Composite fell 50.66 points, or 0.26 per cent, to 19,230.74.

MSCI’s gauge of stocks across the globe fell 2.46 points, or 0.29 per cent, to 854.38, on track for a second straight decline after five sessions of gains. In Europe, the STOXX 600 index closed down 0.13 per cent to a three-month low.

Investors have swarmed toward assets expected to benefit from Donald Trump’s policies in his second term as US president, after he pledged to impose high tariffs on imports from key trading partners, lower taxes and loosen government regulations.

Bitcoin, the world’s biggest cryptocurrency, has shot up more than 30 per cent since the Nov. 5 election, above $93,000 to a record. Bitcoin was last up 0.82 per cent to $89,030.

Bond yields have also surged on concerns that while Trump’s policies will spur growth, they could also rekindle inflation after a long battle against price pressures following the COVID-19 pandemic.

Expectations for more Fed rate cuts have been dialed back over the past few weeks, but the bets have become more volatile recently. Expectations for a 25 bps cut at the Fed’s December meeting were at 82.3 per cent, up from 58.7 per cent on Tuesday and just below the 84.4 per cent a month ago, according to CME’s FedWatch Tool.

Comments from several Fed officials on Wednesday indicated that after a scare earlier this year that the labor market might be cooling too fast, they are refocusing on inflation risks as they weigh when, and how fast and far, to cut interest rates.

The dollar index, which measures the greenback against a basket of currencies, gained 0.47 per cent to 106.49, with the euro down 0.56 per cent at $1.0564.

Republicans on Wednesday clinched a majority in the House of Representatives and with it full control of Congress, which would give Trump power to advance his agenda of tax cuts for businesses, workers and retirees.

Early priorities are expected to include extending Trump’s 2017 tax cuts, funding the US-Mexico border wall, cutting unspent funds allocated by Democrats, eliminating the Department of Education and curbing the powers of agencies.

US crude settled up 0.46 per cent to $68.43 a barrel and Brent rose to $72.28 per barrel, up 0.54 per cent on the day, on short covering after prices dropped to a two-week low.

Gold prices extended losses for the fourth straight session on Wednesday, weighed down by a stronger dollar and elevated bond yields.

Spot gold was down 0.7 per cent at $2,580.39 per ounce by 12:20 AM IST, after hitting a near two-month low earlier in the session. US gold futures settled 0.8 per cent lower at $2,586.50 per ounce.