NIFTY50 & SENSEX close in red; broader market close in green, NIFTY small-cap jumps over 1%

Indian equity markets spent most of their time in green territory, but selling pressure in the last leg of trade forced indices to end below neutral lines. Traders avoided taking risk ahead of HSBC Composite Purchasing Managers' Index (PMI) Flash, HSBC Manufacturing PMI Flash, and HSBC Services PMI Flash data due on tomorrow. As for broader indices, the BSE Midcap index ended with gains of over half a per cent, while the Small cap index concluded with a gain of over a per cent.

Markets made cautious start following a lackluster trade on Wall Street overnight as well as mixed cues from Asian counterparts. However, soon markets gained traction, as some support came after Michael Debabrata Patra, deputy governor, Reserve Bank of India (RBI) said India is likely to recover to its long term growth trend of 8%.

Markets remained higher in the afternoon session despite the labour ministry statement stating that retail inflation for farm workers and rural labourers increased to 6.36% and 6.39%, respectively, in September from 5.96% and 6.08% in August this year. In last leg of trade, markets come off from day’s high levels tracing weak cues from European markets and settled in red terrain.

On the global front, European markets were trading mostly in red due to concerns about slowing Chinese growth and the widening U.S. fiscal deficit. Asian markets ended mixed, tracking elevated U.S. treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and fears the U.S. may be heading toward fiscal collapse. Back home, domestic rating agency Crisil has said that the Reserve Bank of India’s (RBI) recent notification asking financiers to review their gold loan practices can slow down loan growth in the near term and lead to an uptick in asset quality stress.

The BSE Sensex ended at 80,081.98, down by 138.74 points or 0.17% after trading in a range of 79,891.68 and 80,646.31. There were 8 stocks advancing against 22 stocks declining on the index. The broader indices ended in green; the BSE Mid cap index gained 0.48%, while the Small cap index was (+0.93%).

The NIFTY50 ended at 24,435.50, (-36.60) points or (+0.15%) after trading between 24,378.10 and 24,604.25. There were 20 stocks advancing against 30 stocks declining on the index.

European markets were trading mostly in red; the UK’s FTSE 100 decreased 18.39 points or 0.22% to 8,288.15 and France’s CAC was (-26.44) points or 0.35% to 7,508.66. On the flip side, Germany’s DAX was up by 14.24 points or 0.07% to 19,436.15.

Asian markets settled mixed on Wednesday, tracking elevated US treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and concerns about the US fiscal deficit. Japanese shares declined as investors were reluctant to place major bets ahead of the country's upcoming lower house election results.

Meanwhile, Chinese shares rose after reports emerged that the government may deploy as much as 2 trillion yuan (US$280 billion) of special treasury bonds to establish a stock market stabilisation fund. Seoul shares gained with automakers and technology shares leading the rally, while the Korean won continued to decline against the dollar.