Sensex, Nifty extend losses into 3rd session on foreign fund outflows; all eyes on US Fed’s decision

PTI, Dec 18, 2024, 5:44 PM IST

Mumbai: Equity benchmark indices Sensex and Nifty stayed on the back foot for the third straight session on Wednesday as investors offloaded utility, capital goods and metal stocks amid foreign fund outflows.

Besides, investor sentiment remained subdued ahead of the outcome of the US Federal Reserve’s policy meeting, scheduled for Wednesday, traders said.

The 30-share BSE benchmark tumbled 502.25 points or 0.62 per cent to settle at 80,182.20, taking its downtrend to the third day. During the day, it tanked 634.38 points or 0.78 per cent to 80,050.07.

As many as 2,563 stocks declined while 1,442 advanced and 94 remained unchanged on the BSE.

The NSE Nifty declined 137.15 points or 0.56 per cent to 24,198.85.

“The near-term market construct has turned weak, with FIIs turning sellers on rallies. Yesterday’s massive FII sell figure of Rs 6,410 crore in the cash market indicates that more selling is in store on market bounces.

“The focus of global markets today will be the Fed decision expected tonight. A 25 bps rate cut is priced in by the market. So, the attention will be on the Fed commentary,” VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

From the 30-share blue-chip pack, Tata Motors, Power Grid, NTPC, Adani Ports, JSW Steel, ICICI Bank, Larsen & Toubro and Bajaj Finance were the main laggards.

In contrast, Tata Consultancy Services, Reliance Industries, Tech Mahindra and HCL Technologies were the gainers.

“Nifty fell for the third consecutive session, losing 137 points amid selling pressure ahead of the US Fed’s interest rate decision later on Wednesday. Over these three sessions, Nifty dropped by 2.3 per cent.

“FII selling intensified on Tuesday as they offloaded equities worth Rs 6,400 crore, inducing cautiousness in Indian markets. Investors will also watch out for interest rate decisions of Japan and England as well as US Q3 GDP data to be released tomorrow. We expect markets to remain sideways with the Fed commentary determining the near-term direction,” Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.

The BSE smallcap index declined 0.76 per cent, and the midcap gauge dipped 0.61 per cent.

Among sectoral indices, utilities tanked 2.06 per cent, power (1.78 per cent), capital goods (1.56 per cent), metal (1.44 per cent), industrials (1.30 per cent) and financial services (1.20 per cent).

BSE Focused IT, healthcare and IT were the gainers.

The rupee dropped 3 paise to close at an all-time low of 84.94 (provisional) against the US dollar on Wednesday.

“Investors shunned stocks led by banking ahead of the outcome of the US rate decision with a focus on the Fed chairman’s commentary on inflation and growth outlook in the backdrop of the worsening global economic situation.

“The rupee continuing its downward trajectory and hitting fresh lows also dampened the sentiment, as extended fall could further worsen trade deficit and hit inflation going ahead,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,409.86 crore on Tuesday, according to exchange data.

In Asian markets, Seoul, Shanghai and Hong Kong settled higher, while Tokyo ended lower.

European markets were trading in the positive territory in mid-session deals. Wall Street ended lower on Tuesday.

Global oil benchmark Brent crude climbed 0.48 per cent to USD 73.67 a barrel.

“15 companies are set to launch their IPOs by December 20, 2024, with many more in the pipeline. This surge in IPO activity is drawing substantial liquidity from the market, adding pressure to major indices.

“FIIs, who are major participants in the Indian equity markets, often wind down their trading activities towards the end of the year due to the Christmas Holiday in Europe and North America. This reduced participation can lead to lower demand for Indian equities, adding pressure to the Nifty,” Vinit Bolinjkar- Head of Research at Ventura Securities, said.

Falling for the second day in a row, the BSE benchmark tanked 1,064.12 points or 1.30 per cent to settle at 80,684.45 on Tuesday. The Nifty tumbled 332.25 points or 1.35 per cent to 24,336.