- India’s Nifty and Sensex ended Tuesday lower, courtesy of risk-averse global markets and poor Indian PMI.
- Nifty and Sensex refreshed record highs on Monday amid India’s growth story and the global rally.
- The focus shifts toward US ISM Services PMI, Fed Chair Powell and US Nonfarm Payrolls data.
The Sensex 30 and Nifty 50, India’s key benchmark indices, corrected on Tuesday to settle in the red zone.
Risk aversion extended into Asia and Europe, as both the Indian and Chinese Services PMI data disappointed for February.
The National Stock Exchange (NSE) Nifty 50 and Bombay Stock Exchange (BSE) Sensex 30 closed nearly 0.25% lower on the day at 22,356.30 and 73,677.13 respectively.
Stock market news
- Among the top gainers on Nifty were Bharti Airtel, Tata Motors, SBI Bank, Bajaj Auto and ONGC. Meanwhile, the main laggards were Bajaj Finance, TCS, Nestle India, Infosys and Bajaj FinServ.
- IT stocks fell as CLSA downgraded TCS, HCL; reiterates sell call on Wipro, LTIMindtree.
- Bharti Airtel expanded its network footprint in Ernakulam and Idukki District under its rural enhancement project
- Markets are disappointed by an unexpected drop in the Chinese Caixin Services PMI to 52.5 in February while China’s 2024 GDP growth target set at around 5.0% also weighs on risk sentiment.
- Further, the HSBC India Services Purchasing Managers' Index, compiled by S&P Global, fell to 60.6 last month from January's six-month high of 62.0, missing estimates of 62.0.
- Moody's raised India's 2024 GDP growth estimate to 6.8% from 6.1% on Monday.
- India’s manufacturing sector climbed to a five-month high of 56.9 in February on Friday.
- The US stock markets closed lower on Monday, as a sense of caution prevailed ahead of an event-packed week.
- Last Friday, the US manufacturing sector contracted at an accelerating pace in February, with the ISM Manufacturing PMI dropping to 47.8 from 49.1 in January, missing the market expectation of 49.5 by a wide margin.
- Markets are currently pricing in about a 30% chance that the Fed could begin easing rates in May, slightly higher than a 20% chance a week ago, according to the CME FedWatch Tool. For the June meeting, the probability of a rate cut now stands at about 67%.
- India's Gross Domestic Product (GDP) expanded by 8.4% on an annual basis in the third quarter (October-December), as against 7.6% in the previous quarter, data released by the National Statistical Office (NSO) showed Thursday.
- It’s a holiday-shortened week for the Indian markets, as they will be closed, in observance of the Mahashivratri festival on Friday.
- The main event risks for markets this week will be India’s Services PMI, US Federal Reserve (Fed) Chair Jerome Powell’s testimony and the all-important US Nonfarm Payrolls data.
- Another event of note includes China's National People's Congress (NPC) meeting which could flag new stimulus measures.
Nifty 50 FAQs
The Nifty 50, or simply Nifty, is the most commonly followed stock index in India. It was launched in 1996 by the National Stock Exchange of India (NSE). It plots the weighted average share price of 50 of the largest Indian corporations, offering investors comprehensive exposure to 13 sectors of the economy. Each corporation's weighting is based on its "free-float capitalization", or the value of all its shares readily available for trading.
The Nifty is a composite so its value is dependent on the performance of the companies that make up the index, as revealed in their quarterly and annual results. Another factor is government policies, such as when in 2016 the government decided to demonetize 500 and 1000 Rupee banknotes. This led to a temporary cash shortage which negatively impacted the Nifty. The level of interest rates set by the Reserve Bank of India is a further factor as it determines the cost of borrowing. Climate change, pandemics and natural disasters are also drivers.
The Nifty 50 was launched on April 22, 1996 at a base level of 1,000. Its highest recorded level to date is 22,097 achieved on January 15, 2024 (this is being written in Feb 2024). The index first closed above the 10,000 level on October 17, 2017. The Nifty recorded its biggest daily decline on March 23, 2020 during the Covid pandemic, when it fell 1,125 points or 12.37%. The Nifty’s biggest gain in a single day occurred on May 18, 2009, when it rose 651 points after the results of the Indian elections.
Major corporations in the Nifty 50 include HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd and Kotak Mahendra Bank.
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