Nifty 50 sinks below 24,250 amid selling pressure in financial stocks: Key factors affecting D-Street

Home equity stocks struggled below the bottom line amid selling pressure in financial services stocks on Wednesday. However, some interest buying in areas such as pharmaceuticals and oil and gas provided some support, preventing major gauges from taking deeper cuts. The Sensex fell by 384.5 points to 80,299.9 while the Nify50 fell below the 24,250 mark during the session.

At 10:35 am, both the major gauges were down 0.2 percent, with the Sensex down 185.1 points at 80,499.3 and the Nifty50 down 48.1 points at 24,287.9.

Here are some of the important things that affect Dalal Street now:

All Eyes on the Fed: Vigilance continues for investors around the world ahead of the Fed’s final annual rate decision where the US central bank is widely expected to deliver its fourth rate cut of the year. The highly anticipated event may not only mark the US central bank’s third rate cut of the year but also provide more clarity on its future rate decisions.

FII sales from time to time: While foreign institutional investors (FIIs) have already been the biggest buyers of Indian stocks in six of the 11 sessions so far this month, many analysts fear it may take some time before they switch to the ongoing selling mode on Dalal Street. However, domestic institutional investors (DIIs) continue to fill the gap created by foreign institutional sales, a trend that has been reflected in almost two straight months of FII outflows back into the market since late September. As of December 16, FIIs and DIIs have bought shares worth Rs 11,428 crore and Rs 4,438 crore respectively, according to interim exchange data.

The Rupee Is Not Out Of The Woods Yet: The rupee started the day relatively low at 84.92 against the US dollar on Wednesday, inches from the previous day’s low. This marks the latest in a series of declines over the past few days. While the depreciating rupee favors foreign-heavy businesses such as IT companies, it raises costs for sectors that rely heavily on commodities such as metals and electronics. Additionally, companies with very high levels of overseas borrowing face higher repayment costs due to the depreciation of the rupee.

Slow Economic Growth: Official data released last month showed that the country’s GDP growth fell to a seven-quarter low of 5.4 percent in the July-September period. While many experts believe that GDP growth may have slowed down for now, others fear that it may have a longer-term impact on business activity.

Is Inflation Under Control? The consumer inflation reading for November stood at 5.48 percent, in line with most economic estimates and within the upper end of the RBI’s medium-term tolerance range. Many economists believe that the reduction in inflation gives the RBI room to cut the benchmark interest rate in its February policy review.

Measure Cut Expectations: Another deterrent to further selling in the market is the market-wide expectation of an imminent devaluation in February. In its December policy review, the RBI’s Monetary Policy Committee (MPC) decided to keep the repo rate fixed at 6.5 percent while deciding to cut the reserve ratio (CRR) by 50 bps in two steps in a bid to inject liquidity. in the system.