Sensex, Nifty fall as lower GDP numbers weigh on investor sentiment
India’s benchmark indices were subdued on Monday after the release of lower-than-expected GDP figures on Friday.
The Nifty 50 opened with a modest gain of 9 points at 24,140, while the Sensex dropped 58 points, starting at 79,743.87.
By 9:42 am, the Sensex had declined further by 140.80 points, or 0.18%, to 79,661.99, and the Nifty had slipped 12.25 points, or 0.05%, to 24,118.85.
On the National Stock Exchange, 1,254 stocks advanced, while 1,076 declined.
India’s economy grew by 5.4% year-on-year in the July-September quarter, according to data released on Friday. This growth figure fell short of the Reserve Bank of India’s (RBI) forecast of 7%.
The combination of subdued GDP data and weak second-quarter corporate earnings contributed to increased selling pressure.
Among sectoral indices, Nifty Auto, Media, Metal, Pharma, and Realty saw gains, while Nifty Bank, FMCG, IT, and Oil & Gas sectors posted losses.
Among the Nifty 50 constituents, only 15 stocks advanced, while 34 declined. Shares of Adani Green Energy surged by over 6%.
Ajay Bagga, a banking and market expert, said, “The lower-than-expected GDP number is weighing on Indian markets. While GDP is a lagging indicator and largely factored in, weak corporate earnings indicate slow growth.”
He added, “Without counter-cyclical fiscal and monetary measures, GDP may remain stagnant, further elevating market valuations and creating pressure.”
The Reserve Bank of India is expected to lower the cash reserve ratio (CRR) in its upcoming monetary policy meeting on December 6, which could provide some relief to banking stocks. However, with CPI inflation at 6.2%, interest rate cuts remain unlikely.
In broader Asian markets, Taiwan’s Weighted Index rose by over 2%, while Japan’s Nikkei 225, Hong Kong’s Hang Seng, and South Korea’s KOSPI traded flat.
