On November 12, the Indian stock market witnessed a challenging session as initial optimism quickly faded, leading to a significant sell-off. The Nifty 50 dropped 1.15% to close at 23,863 points, while the Sensex lost 1.01%, ending at 78,694 points. This marked the fourth consecutive day of losses for both indices, signaling a continued ‘sell on the rise’ approach among investors as they navigate uncertain market and economic conditions.

The downtrend extended across the broader markets, with mid and small-cap indices also impacted. The Nifty Midcap 100 index declined by 1.16%, closing at 55,257 points, and the Nifty Smallcap 100 index was down by 1.40% to 17,991 points. This broad-based decline reflects caution in the markets amid weak high-frequency economic indicators and global uncertainties.

Broader Market Trends and Economic Indicators

The broader market declines were also seen across Asian indices, many of which recorded similar losses. Compounding domestic challenges, reports indicate that the Indian government may adjust quarterly spending limits to meet its FY25 capital expenditure targets. According to analysts, a slowdown in federal spending has affected recent economic indicators, adding pressure on sectors reliant on government investment. This spending slowdown is likely impacting current market sentiment, with investors closely watching any changes in fiscal policy that could boost spending in the coming quarters.

Major Sectoral Performances

Almost all sectoral indices, except for Nifty IT (which ended flat), closed in the red. The hardest-hit sectors included:

• Nifty PSE, which recorded a 2.41% decline amidst selling pressure in public sector enterprises.
• Nifty Auto was also hit hard, falling nearly 2% as concerns around demand and rising input costs weighed on auto stocks.
• Nifty PSU Bank declined by 1.92%, with public sector banking stocks experiencing notable sell-offs.
• Additional sectoral indices, including Nifty FMCG, Nifty Metal, Nifty Energy, and Nifty Consumer Durables, each recorded losses of up to 1.5%, driven by investor concerns over rising costs and demand volatility.

This sectoral decline suggests investors are exercising caution, with weak earnings reports, global uncertainty, and government spending delays contributing to a risk-off sentiment across most sectors.

Key Stock Performances in Nifty 50

The Nifty 50 index saw 44 constituents ending in the red, with notable decliners in various sectors. Among the stocks making headlines:

Gainers

• Alembic Pharmaceuticals: Shares surged following USFDA approval for its Ivabradine tablets, a generic version of Corlanor used in heart failure treatment. The drug's annual market is estimated at $145.3 million, strengthening Alembic’s position in the pharmaceutical sector.

• HMA Agro Industries: The stock reached a 10% upper circuit, buoyed by a 5.4x increase in net profit year-on-year, reaching Rs 51.9 crore in Q2FY25. This growth was driven by inventory destocking and deferred tax benefits, boosting its revenue by 22.7% YoY.

• UNO Minda: Posted a 9% YoY rise in net profit, attributed to improved cost efficiencies in inventory management. The company's growth was particularly notable in its switches, lighting, and casting segments, highlighting strength in the industrial sector.

• NBCC (India): NBCC received new orders worth Rs 448.7 crore from clients like GAIL and New India Assurance, enhancing its growth prospects in infrastructure and public sector construction.

• L&T Technology Services: Announced a $110 million acquisition of Intelliswift Software Inc, expanding its portfolio in AI and digital solutions. The acquisition is expected to reinforce L&T’s position in tech-enabled infrastructure services.

Losers

• Britannia Industries: Led the declines with a 7.5% drop after Q2 results missed expectations. Profitability was impacted by higher commodity costs and weak consumer demand.

• Bharat Electronics: The stock dropped by 3.2% amid profit booking and a cautious forward outlook, adding to broader market losses in the defense sector.

• Blue Dart Express: Reported a 14% YoY decline in Q2 net profit, primarily due to higher freight and employee costs, though revenue rose by 9.6% YoY.

• Hyundai Motor India: Net profit declined by 15.5% YoY due to rising input costs and high inventory levels, leading to an 8.4% decrease in revenue for Q2FY25.

• NMDC: The company missed profit estimates with net profit growth of 18.1% YoY, underperforming in its iron ore segment despite 22.5% YoY revenue growth.

Broader Economic and Spending Context

Analysts suggest that government spending may accelerate in the coming quarters as the Indian government considers adjustments to quarterly spending limits to meet capex goals for FY25. The recent slowdown in federal spending, however, has contributed to weaker economic indicators, which could delay any immediate positive impact on market sentiment.

Global Market Influence and Major International Deals

Indian markets remain influenced by global factors, with US and European markets showing mixed performances that contribute to domestic volatility. In global M&A news, Cardinal Health acquired stakes in GI Alliance and Advanced Diabetes Supply Group for $3.9 billion, reflecting strong momentum in M&A that could affect investor sentiment positively.

Investment Strategy and Outlook

In this period of volatility, a stock-specific, sectoral investment strategy may be advantageous. Sectors like pharmaceuticals and infrastructure show resilience amid broader declines, with companies like Alembic Pharmaceuticals and L&T Technology Services benefiting from regulatory approvals and strategic acquisitions. As investors await clarity on government spending for the fiscal year, there may be selective opportunities in fundamentally strong sectors poised for mid- to long-term growth.

Summary

The Indian stock market continued its downward trend on November 12, weighed down by sectoral and stock-specific losses. Key indices like Nifty 50 and Sensex suffered for a fourth straight session, and the midcap and smallcap indices also recorded notable declines. With the Nifty PSE, Nifty Auto, and Nifty PSU Bank experiencing some of the day’s steepest declines, Britannia, Bharat Electronics, and Blue Dart led individual stock losses. However, companies like Alembic Pharmaceuticals and NBCC saw gains, reflecting resilience in select sectors.

As investors navigate ongoing market volatility, a targeted approach focusing on resilient sectors like pharmaceuticals and infrastructure could offer selective opportunities, especially as investors await fiscal updates that may impact future market movements.

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