HEAVYWEIGHT SELL-OFF DRAGS BENCHMARKS LOWER, BROADER MARKET CLIMBS

The domestic equity benchmarks snapped early gains to close slightly lower on Wednesday, as the Reserve Bank of India (RBI) maintained its key policy rates. The Nifty50 struggled to break above the 25,200 resistance level, with a late sell-off in heavyweight stocks dragging the index lower. The broader market outperformed, with mid and small-cap stocks advancing. Pharma and realty shares led the way, while FMCG and energy stocks corrected.

In the barometer index, the S&P BSE Sensex was down 167.71 points or 0.21% to 81,467.10. The Nifty 50 index shed 31.20 points or 0.12% to 24,981.95.

ITC (down 3.17%), Reliance Industries (down 1.64%) and HDFC Bank (down 1.07%) were major drags.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index gained 1.06% and the S&P BSE Small-Cap index jumped 1.21%.

The market breadth was strong. On the BSE, 2,705 shares rose and 1,248 shares fell. A total of 97 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, slipped 3.44% to 14.09.

RBI Policy Outcome:

Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the Monetary Policy Committee (MPC) has decided to keep interest rates unchanged, aligning with market expectations, while shifting its policy stance from "withdrawal of accommodation" to "neutral." The MPC voted by a 5:1 majority to maintain the policy repo rate at 6.5%. The RBI also retained its GDP growth target for FY25 at 7.2%. However, Consumer Price Index (CPI) inflation for September is expected to rise significantly due to unfavorable base effects and increasing food prices, according to the governor. The minutes of the MPC�s meeting will be published on October 23, 2024. The next meeting of the MPC is scheduled during December 4 to 6, 2024.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper advanced 1.16% to 6.885 as compared with previous close 6.919.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.9600, compared with its close of 84.9700 during the previous trading session.

MCX Gold futures for 4 December 2024 settlement rose 0.08% to Rs 75,221.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.05% to 102.61.

The United States 10-year bond yield shed 0.45% to 4.018.

In the commodities market, Brent crude for December 2024 settlement lost 28 cents or 0.36% to $76.90 a barrel.

Global Markets:

European stocks advanced on Wednesday as positive sentiment wavered in the region, spurred on by volatility in China.

Most Asian shares ended lower on Wednesday, as investors remained cautious amid ongoing geopolitical tensions and a lack of concrete stimulus details from China.

Chinese shares experienced a sharp decline as investors were disappointed by the absence of specific measures to boost the economy. Despite repeated calls from investors, Beijing has been hesitant to implement targeted fiscal stimulus.

US stocks rebounded on Tuesday, following a decline the previous day, as oil prices eased and investors assessed the situation in the Middle East. The S&P 500 gained 0.97%, the Nasdaq Composite rose 1.45%, and the Dow Jones Industrial Average added 0.3%.

Markets are now closely watching for clues about future US interest rate policy, as doubts persist regarding the Federal Reserve`s plans for further rate cuts. The minutes of the Fed`s September meeting are scheduled for release later on Wednesday, and several Fed officials are also set to speak.

Consumer price index inflation data, due on Thursday, is expected to play a significant role in shaping the Fed`s outlook.

Stocks in Spotlight:

Tata Technologies rose 0.47%. The company has launched a joint venture with the BMW Group namely BMW TechWorks India, to focused on developing automotive software and business IT Solutions.

Easy Trip Planners surged 3.5% as board to mull bonus share issue on Oct 14.

Divi`s Laboratories jumped 7.6% to hit a record high of Rs 6028.95 today. Foreign broker initiates coverage with a `buy` rating & price target of Rs 6,400, citing its strong position in the GLP-1 API space.

Premier Energies surged 6.37% after the company`s subsidiary secured a significant solar module supply contract with BN Hybrid Power-1, a special purpose vehicle of BrightNight India. Under the terms of the agreement, Premier Energies will supply 173.35 MWp of cutting-edge Topcon technology solar modules to be used in BN Hybrid Power-1`s 300 MW FDRE (Wind, Solar and Energy Storage) Power Project located in Barmer, Rajasthan.

JSW Infrastructure shed 0.59%. The company said that it has received Letter of Intent from Maharashtra Maritime Board (MMB) for developing and operating a Port at village Murbe in Palghar District of Maharashtra.

Torrent Power rallied 6.50% after the company announced that it has received letter of award from Maharashtra State Electricity Distribution Company (MSEDCL) for supplying 2,000 Megawatt (MW) energy storage capacity. The total annual revenue will be Rs 1,680 crore.

Varun Beverages added 0.44%. The company said that its board has approved a proposal to raise upto Rs 7,500 crore, in one or more tranches, through qualified institutions placement (QIP) route.

Welspun Enterprises advanced 2.78% after the company has secured order worth Rs 1,989.40 crore from Brihanmumbai Municipal Corporation (BMC) for the construction of tertiary treated water conveyance tunnel from Dharavi to Ghatkopar.

Ajmera Realty & Infra India rallied 4.03% after the company reported collections of Rs 133 crore in Q2 FY25, up by 20% from Rs 111 crore recorded in Q2 FY24.

Rites surged 8% after the company announced that it has signed a Memorandum of Understanding (MoU) with Etihad Rail for developing railways and related infrastructure services works in UAE and wider region.

Arvind SmartSpaces jumped 6.20% after the company signed a new residential apartment project in Bengaluru, with a total estimated saleable area of 4.2 lakh sq. ft. and a top-line potential of Rs 600 crore.

Ceinsys Tech hit an upper circuit of 20% after the company received letter of award (LoA) from State Water and Sanitation Mission (SWSM), Water Supply and Sanitation Department (WSSD) for appointment of system integrators worth Rs 331.61 crore.

RMC Switchgears hit an upper circuit of 5% after the electrical equipment company bagged an order the development of solar power project aimed at solarizing agricultural feeders in Maharashtra for Rs 201 crore.

IPO Update:

The initial public offer (IPO) of Garuda Construction and Engineering received bids for 8,16,77,366 shares as against 1,99,04,862 shares on offer, according to stock exchange data at 17:00 IST on Wednesday (09 October 2024). The issue was subscribed 4.10 times.

The issue opened for bidding on Tuesday (08 October 2024) and it will close on Thursday (10 October 2024). The price band of the IPO is fixed between Rs 90 to Rs 95 per share. An investor can bid for a minimum of 157 equity shares and in multiples thereof.

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