Market Commentary - Mid-Session
Indices tumble in early trade; breadth weak As on : 19-Dec-24  09:34

The domestic equity indices traded with major losses in early trade. The Nifty slipped below the 23,900 level. All the sectoral indices on NSE traded in the red with metal, realty and PSU bank shares declining the most.

At 09:29 IST, the barometer index, the S&P BSE Sensex, tumbled 970.83 points or 1.21% to 79,211.82. The Nifty 50 index dropped 301.60 points or 1.25% to 23,897.25.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index plunged 1.52% and the S&P BSE Small-Cap index fell 1.39%.

The market breadth was weak. On the BSE, 539 shares rose and 2,340 shares fell. A total of 102 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,316.81 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 4,084.08 crore in the Indian equity market on 18 December 2024, provisional data showed.

Stocks in Spotlight:

Bank of Baroda slipped 1.64%. The bank's board has approved to raise Rs 10,000 crore through long term bonds for financing of infrastructure and affordable housing in single or multiple tranches during the FY25.

FDC shed 0.12%. The company received final approval from US Food and Drug Administration (USFDA) for abbreviated new drug application for Cefixime 400 mg tablets. The FDA had inspected the company's manufacturing facility in Himachal Pradesh.

IOL Chemicals and Pharmaceuticals rallied 3.83% after the company's board will meet on 27 December 2024, to consider stock split.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.51% to 6.896 as compared with previous close 6.861.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.0625, compared with its close of 84.9450 during the previous trading session.

MCX Gold futures for the 5 February 2024 settlement slipped 0.83% to Rs 76,017.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.04% to 108.07.

The United States 10-year bond yield added 0.31% to 4.512.

In the commodities market, Brent crude for February 2024 settlement lost 28 cents, or 0.38% to $73.11 a barrel.

Global Markets:

The Dow Jones index futures were up 108 points, signaling a positive opening for U.S. stocks today.

Asian stocks fell on Thursday, with technology shares leading the decline. This followed the Federal Reserve's decision to cut interest rates by 25 basis points on Wednesday, its third consecutive rate reduction. However, the Fed hinted at fewer rate cuts in 2025 due to persistent inflation and a resilient economy.

Investors are now focused on the Bank of Japan's policy decision later today. Market sentiment is divided over whether the bank will opt for a rate hike or maintain its current stance.

The Fed's rate cut brought the target range to 4.25%-4.50%. While Chair Jerome Powell emphasized that future rate reductions would depend on inflation progress, the central bank's updated economic projections suggest a less dovish stance than previously anticipated. Policymakers now foresee two 25-basis-point rate cuts next year, compared to the four cuts projected in September.

The Fed's projections also indicate that inflation remains above the 2% target. It expects inflation to be 2.4% this year and 2.5% next year. Additionally, the central bank forecasts slightly stronger economic growth and lower unemployment in 2025.

The prospect of higher-for-longer interest rates weighed heavily on Wall Street on Wednesday. Technology stocks bore the brunt of the sell-off, with NVIDIA, Tesla, Intel, and Broadcom experiencing significant declines.

The S&P 500 fell 3%, the NASDAQ Composite dropped 3.6%, and the Dow Jones Industrial Average declined 2.6%. The Dow's 10-day losing streak is its longest since 1974.

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