Market Slips Amid Weak Global Cues and Domestic IT, PSU Bank Pressure

Indian stock indices closed marginally in the red on Wednesday, affected by weak US market signals and a drop in domestic IT and PSU bank stocks. Despite recent gains, concerns about a potential US economic slowdown weighed on investor sentiment.

Indian stock indices closed marginally in the red on Wednesday, reflecting weak cues from US markets and a decline in domestic IT and PSU bank stocks. Profit booking also impacted the indices, with Sensex ending at 82,352.64 points, down 202.80 points or 0.25%, and Nifty closing at 25,198.70 points, down 81.15 points or 0.32%. The S&P 500 index fell over 2.12% overnight.

Over the past month, Sensex and Nifty had risen about 5% cumulatively. Vinod Nair, Head of Research at Geojit Financial Services, stated that weak US manufacturing data heightened concerns about a potential US economic slowdown, impacting domestic indices. With no major domestic triggers, indices are expected to rely on global cues for direction.

Ajit Mishra, SVP of Research at Religare Broking Ltd, noted that bulls are maintaining their stance despite the possibility of consolidation if global pressures increase. Recent rallies in Indian stocks were driven by strong foreign portfolio investments, steady GST collections, and robust GDP growth. On Tuesday, the World Bank revised India's growth forecast from 6.6% to 7% for 2024-25.

In the April-June quarter of the current financial year 2024-25, the Indian economy grew by 6.7% in real terms, compared to 8.2% in the same quarter last year. Many global rating agencies have also revised their forecasts for India's growth upwards. August's GST collections reached Rs 1.74 lakh crore, up 10% year-on-year. Total GST collection in 2024 has been 10.1% higher at Rs 9.13 lakh crore compared to the corresponding period in 2023.

(With inputs from agencies.)