News Wrap | Sensex, Nifty Slip A Day Before Diwali; Poll Indicates RBI Rate Cut In December

Starting with Asian equity markets, most indices ended lower despite news that China may consider a 1.4 trillion dollar debt package to stimulate its economy over the next few years. The Shanghai Composite finished down six-tenths of a percent, and Hong Kong’s Hang Seng slipped more than one and a half percent. In contrast, Japan’s Nikkei rose by nearly one percent. The Bank of Japan kicked off its two-day policy meeting on Wednesday, with expectations it will keep key interest rates unchanged at 0.25 percent.

"Back home, Indian equities closed in the red, unable to sustain the momentum from the previous two sessions. Both the Sensex and Nifty slipped by half a percent, with the Sensex closing below 80,000 and the Nifty just above 24,300. Of the fifty Nifty constituents, 19 advanced while 39 declined on Wednesday. Adani Enterprises led the gains, rising nearly four percent following strong second-quarter results, while Cipla was the biggest laggard, dropping four percent.

The big news in telecom – According to a CNBC-TV18 report, the Department of Telecommunications has issued a draft cabinet note proposing a waiver of bank guarantees for spectrum acquired by telecom companies prior to 2022. This waiver has been a longstanding request from Vodafone Idea, which has been navigating significant financial challenges.

Shifting focus to the economy – As signs emerge that India’s growth may be entering a slower phase, economists anticipate a possible rate cut by the Reserve Bank of India. According to a Reuters poll of 57 economists, a narrow majority of 30 expect the central bank to lower its key rate by 25 basis points to 6.25 percent at its next policy meeting. The RBI’s monetary policy panel is scheduled to meet from the fourth to the sixth of December.

Staying with the RBI – India’s central bank recently relocated 102 tonnes of gold from the Bank of England to facilities within India. With this shift, the gold reserves held domestically by the RBI have increased to 510.5 tonnes, while its overall gold holdings stand at 855 tonnes. Since September 2022, India has repatriated a total of 214 tonnes of gold, highlighting its preference for retaining more assets within its borders amid evolving global geopolitical dynamics. This strategic move by the RBI is seen as a hedge against uncertain times.

With that, we wrap up this edition of The Business Hook News Wrap podcast. We'll be back next week with the next edition after a short Diwali holiday. Wishing you all a very Happy Diwali! And don’t miss our Diwali Special episode of Invest Smart with Feroze Azeez of Anand Rathi Wealth Management, where he shares savvy investment ideas for a prosperous Samvat 2081.