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Benchmark stock market indices rebounded after an initial dip in early trade, despite weak second-quarter earnings and continued foreign investor sell-offs impacting market sentiment.
At 10:24 am, the S&P BSE Sensex rose 65.31 points to 79,607.10, while the NSE Nifty50 gained a modest 5.30 points, reaching 24,204.65. Broader market indices mostly traded in the red, reflecting cautious investor sentiment.
Gains in the Nifty IT index, led by Wipro, Infosys, and Tech Mahindra, provided support, while losses in banking and financial services weighed down indices. Top losers included ICICI Bank, BPCL, and Coal India.
Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted a divergence in market trends. He attributed the Indian market's weakness to relentless foreign investor selling, driven by high valuations and slowing earnings growth in Q2. FIIs sold equities worth ₹1,13,858 crore in October and ₹16,445 crore so far in November.
The Government of India has revised the release timing of quarterly GDP estimates to 4:00 PM IST, replacing the earlier 5:30 PM slot. This move aligns GDP data dissemination with the closure of financial markets, mirroring recent changes for inflation and Index of Industrial Production (IIP) reports. The Ministry of Statistics and Programme Implementation (MoSPI) aims to reduce market disruptions while enhancing transparency and accessibility.
SBI economists forecast a deceleration in GDP growth, projecting 6.5% for Q2 FY2024-25, down from 6.7% in Q1, marking a 15-quarter low. Analysts cite sluggish demand across agriculture, industry, and services, with only 69% of economic indicators showing growth compared to 80% last year. Despite this slowdown, experts anticipate recovery starting December. The upcoming GDP report for July-September FY2024-25 will be released on November 29 at the revised 4:00 PM schedule.
Reliance Industries has experienced a significant decline in market capitalization, losing nearly $50 billion (approximately Rs 4.2 lakh crore) since its peak in July 2024. This drop is attributed to weaker earnings and broader economic challenges. Reliance’s stock performance has been lacklustre, trailing the NSE Nifty 50 Index by the widest margin in a decade. On November 4, the company’s valuation fell by Rs 50,205.1 crore to Rs 17,61,914.95 crore, amidst a sharp decline in Indian markets. The Sensex fell nearly 942 points to a three-month low, and the Nifty dropped over 1%, closing below 24,000. The downturn was exacerbated by heavy selling in Reliance and banking shares. The conglomerate’s sixth consecutive earnings miss, primarily due to subdued demand in its oils-to-chemicals segment, has further weighed on investor sentiment. Despite Reliance's challenges, Indian markets remain resilient, ranking among Asia’s top performers in 2024.
After the US Federal Reserve implemented its second consecutive interest rate cut of 25 basis points in 2024, following Donald Trump’s presidential election win, experts predict that the Reserve Bank of India (RBI) will likely maintain its current policy stance in December. Rakesh Pujara, Smallcase Manager at Compounding Wealth Advisors, emphasized that although the RBI remains committed to supporting economic growth, rising retail inflation driven by extended monsoons and supply chain disruptions may influence its decisions. He anticipates no immediate rate changes, though a cut could occur in early 2025.
Meanwhile, a report by Angel One Wealth highlighted the contrasting scenarios between the US and India. It noted that while the Fed's preemptive cuts address US macroeconomic conditions, India faces a balancing act between growth, persistent food inflation, and currency stability. The report suggests that a domestic rate cut could alleviate growth challenges while addressing inflationary concerns.
