Benchmarks hit the day's low; FMCG shares rise for 2nd day

The domestic equity benchmarks slumped and hit the day's low in mid-morning trade. The Nifty traded below the 18,600 mark. FMCG, however, witnessed decent buying for second consecutive session.

At 11:27 IST, the barometer index, the S&P BSE Sensex, was down 177.43 points or 0.28% to 62,448.93. The Nifty 50 index lost 60.80 points or 0.33% to 18,581.95.

In the broader market, the S&P BSE Mid-Cap index shed 0.45% while the S&P BSE Small-Cap index declined 0.58%.

The market breadth was negative. On the BSE, 1411 shares rose and 1877 shares fell. A total of 149 shares were unchanged.

On the political front, various exit polls on Monday predicted a big majority for the BJP in Gujarat and a dead heat in Himachal Pradesh where most pollsters gave an edge to the ruling party over the Congress. The counting of votes in both states will take place on 8 December. Elections for the Himachal Pradesh assembly took place on 12 November, while polling in Gujarat happened in two phases on 1 and 5 December.

RBI MPC Meet Outcome:

The Reserve Bank of India (RBI) raised the policy repo rate by 35 bps to 6.25% after the conclusion of the Monetary Policy Committee (MPC) meeting today, 7 December 2022.

RBI governor Shaktikanta Das announced that the central bank has hiked lending rate by 35 basis points as inflation has started showing signs of easing and economic growth tapering.

Standing Deposit Facility rate and Marginal Standing Facility Rate were also increased by 35 basis points each to 6% and 6.5%.

Das said the MPC voted 4-2 to remain focused on withdrawal of accommodation so that inflation remains within the target going forward while supporting growth.

On balance, MPC was of the view that further calibrated action was warranted to keep inflation expectation anchored, break core inflation persistence and contain second round effects.

RBI expects inflation to be above 4% in the next 12 months. The GDP growth forecast for October-December 2022 is lowered to 4.4%. It is lowered to 4.2% for January-March 2023 period.

Buzzing Index:

The Nifty FMCG index rose 0.60% to 45,558.25. The index has added 0.90% in two sessions.

Dabur India (up 1.8%), Emami (up 1.7%), Godrej Consumer Products (up 1.28%), Marico (up 1.24%) and Hindustan Unilever (up 1.12%) were the top gainers.

Among the other gainers were Tata Consumer Products (up 0.63%), Nestle India (up 0.6%), United Breweries (up 0.53%), ITC (up 0.44%) and Varun Beverages (up 0.32%).

On the other hand, Radico Khaitan (down 0.81%), Britannia Industries (down 0.21%) and United Spirits (down 0.21%) turned lower.

Stocks in Spotlight:

Larsen & Toubro (L&T) advanced 2.13%. The EPC major announced that its construction arm has secured 'mega' orders for its minerals and metals (M&M) business. As per L&T classification, the value of the mega project is above Rs 7,000 crore.

REC rose 1.04%. The company said that its board approved sale & transfer of MP power transmission package-I to Megha Engineering & Infra.

Kama Holdings advanced 1.12%. The company said that its board will consider share buyback on Monday, 12 December 2022.

Global Markets:

Asian stocks are trading lower on Wednesday after major U.S. indexes fell more than 1% each overnight as recession concerns weigh on markets.

US stocks tumbled Tuesday, building on the previous session's losses, as fears of a recession gripped Wall Street.

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