India’s Nifty and Sensex are trading without much direction this Thursday, marking the expiry day for monthly derivatives contracts. Both indices experienced a decline of over 1% on Wednesday, mainly influenced by significant losses in the auto sector stocks.
Traders are approaching the market cautiously as they await crucial data releases, including India’s third-quarter Gross Domestic Product (GDP) data and the expiry of derivatives contracts later this week.
Currently, the National Stock Exchange (NSE) Nifty 50 and the Bombay Stock Exchange (BSE) Sensex 30 are almost unchanged, with Nifty trading at 21,954.45 and Sensex at 72,371.82 respectively.
Wednesday witnessed notable losses in both Nifty and Sensex, reflecting global market concerns and profit-taking activities ahead of key events in the US and India.
Here are some highlights from the stock market:
- Notable gainers on Nifty include Mahindra & Mahindra, Tata Consumer Products, Britannia, Adani Enterprises, and Adani Ports. Conversely, top losers comprise Apollo Hospitals, Eicher Motors, Bajaj Auto, Bharti Airtel, and LTMindtree.
- Shriram Finance is in focus as it is set to replace UPL in the Nifty 50 index from March 28.
- According to recent government data, foreign direct investment (FDI) inflows in India witnessed a 13% decline to USD 32.03 billion in April-December 2023.
- Brightcom Group observed a 7% decline after the Securities and Exchange Board of India (Sebi) declined to lift restrictions on the promoter.
- Finance Minister Nirmala Sitharaman highlighted transformative reforms expected in sectors like digital infrastructure, space, artificial intelligence, specialized warehousing, agriculture, and tourism during the third term of the Narendra Modi government.
In the US, markets closed lower on Wednesday ahead of the release of crucial US PCE inflation data. Additionally, US GDP for the fourth quarter of 2023 was revised to an annual rate of 3.2%. Recent data on Durable Goods Orders and the CB Consumer Confidence index fell short of market expectations.
Market sentiment indicates a reduced likelihood of rate cuts by the US Federal Reserve (Fed) in the near term, with attention shifting to India’s GDP data and the derivatives expiry for potential market volatility on Thursday.
SENSEX FAQS
What is the Sensex?
The Sensex is the name of one of India’s most carefully watched stock indices. The phrase was invented in the 1980s by analyst Deepak Mohoni by combining the terms sensitive and index. The index is a weighted average of the share prices of 30 of the Bombay Stock Exchange’s most established companies. Each corporation’s weighting is determined by its “free-float capitalization,” or the value of all shares that are readily accessible for trade.
What are the variables that drive the Sensex?
Given its composite nature, the Sensex’s value is primarily determined by the performance of its component firms as reflected in their quarterly and yearly reports. Government policies are another issue. In 2016, for example, the government chose to phase out high-value currency notes, causing some firms’ share prices to decline. Meanwhile, the Sensex benefited from the government’s decision to reduce corporate tax in 2019. Other determinants include the level of interest rates established by the Reserve Bank of India, which determines the cost of borrowing, climate change, pandemics, and natural catastrophes.
What are the Sensex’s significant milestones?
The Sensex began trading on April 1, 1979, with a base level of 100. It achieved an all-time high of 73,328 on Monday, January 15, 2024 (this is published in February 2024). On February 7, 2006, the index closed over 10,000 for the first time. On March 13, 2014, the Sensex finished higher than Hong Kong’s Hang Seng index, becoming Asia’s most valuable stock index. The index’s largest single-day gain happened on April 7, 2020, when it increased 2,476 points; its worst single-day loss occurred on January 21, 2008, when it fell 1,408 points owing to the US subprime crisis.
What significant firms are listed on the Sensex?
The Sensex index includes major firms such as Reliance Industries Ltd, HDFC Bank, Axis Bank, ITC Ltd, Bharti Airtel Ltd, Tata Steel, HCL Technologies, Infosys, State Bank of India, Sun Pharma, Tata Consultancy Services, and Tech Mahindra.