Image source: Pixabay
 

After opening the day higher, Indian share markets gave up the gains as the session progressed and ended the day on a weak note.

Benchmark indices took a sharp knock on the bourses on Thursday after the Reserve Bank of India's decision to keep the repo rate steady with no guidance on rate cut, put pressure on private bank stocks.

At the closing bell, the BSE Sensex stood down by 724 points (down 1%).

Meanwhile, the NSE Nifty closed down by 213 points (down 1%).

SBI, BPCL, and Hindalco were among the top gainers today.

ITC, Nestle, and ICICI Bank on the other hand, were among the top losers today.

The GIFT Nifty was trading at 21,827 down by 195 points, at the time of writing.

Broader markets ended on mixed. The BSE MidCap index ended flat and the BSE SmallCap index ended 0.4% lower.

Sectoral indices ended mixed with stocks in the energy sector, telecom sector, and oil & gas sector witnessing the most buying. Meanwhile, stocks in the realty sector, banking sector, and auto sector witnessed selling pressure.

Shares of TCS, Siemens, and KSB hit their respective 52-week highs today.

Asian share markets ended mixed. The Shanghai Composite ended 1.3% lower, while the Nikkei index ended 2% higher. Meanwhile, Hang Seng ended 1.3% lower.

The rupee is trading at 82.97 against the US$.

Gold prices for the latest contract on MCX are trading flat at Rs 62,496 per 10 grams.

Meanwhile, silver prices are trading marginally higher at Rs 70,345 per 1 kg.

Here are three reasons why Indian Markets are falling today.

#1 Disappointing RBI Policy

The Reserve Bank of India (RBI) Governor announced that the central bank's Monetary Policy Committee (MPC) decided to keep the key interest rates unchanged at 6.5%.

The decision's impact was seen on bank and financial services stocks, which fell after starting off the session on a positive note. Nifty Bank was down 0.9%, while Nifty Financial Services fell over 1%.

#2 Oil on Boil

Oil extended gains on Thursday after Israel rejected a ceasefire offer from Hamas, while a weaker dollar supported prices.

Brent crude futures nears US$ 80 a barrel. US WTI crude futures climbed past US$ 74.12 a barrel.

Israeli Prime Minister Benjamin Netanyahu rejected Hamas' latest offer for a ceasefire and return of hostages held in the Gaza Strip.

#3 Selloff in Index Heavyweight stocks

Shares of ITC fell 4% and was the biggest contributor to today's fall. Apart from that, Index heavyweights such as Axis Bank, Nestle, and ICICI Bank were the other notable losers.
 

Why ITC Share Price is Falling

In news from the FMCG sector, ITC fell 4% after its largest shareholder, British American Tobacco (BAT), said it was working towards completing the regulatory process to pare its stake in the diversified conglomerate.

BAT holds a 29% stake in ITC, which is worth Rs 1.5 tn.

The company said it has been working for some time on completing the regulatory process to give it the flexibility to monetize some of its shareholdings. It will update shareholders with further information whenever available.

After falling 20% over 2023, BAT shares were trading higher by 5.5% on the LSE.

If BAT were to pare its stake by four percentage points to have a 25% shareholding in ITC, the value of the shares offloaded would be around Rs 207.6 bn at ITC's current market cap.

The complexity of divesting ITC's shares is immense and there are two key pain points. India imposes restrictions and limitations on foreign ownership in domestic tobacco companies.

ITC is one of the best dividend-paying stocks.

Apart from that, we also covered an editorial a couple of months ago explaining why the prospects for ITC look good. 
 

Cummins India Zooms 10%. Here's Why.

Moving on to news from the engineering sector, shares of Cummins India rallied over 10% on 8 February 2024 to hit a new all-time high of Rs 2,648.0 on the National Stock Exchange (NSE), a day after the company reported impressive earnings for the quarter ended December 2023.

The company's Q3 results showed a marked improvement in the company's performance compared to the same period last year.

The company reported its highest-ever quarterly consolidated net profit at Rs 4.6 bn in the October-December quarter, up 26% from Rs 3.6 bn reported in the year-ago quarter.

It also recorded its highest-ever revenue of Rs 25.3 bn, a YoY growth of 16.2% compared to Rs 21.8 bn in Q3 FY23.

The company recorded the highest quarterly revenue and profits based on robust domestic demand and is well-positioned to support domestic and export demand.

The company has a strong liquidity and financial position to support its operations and growth plans.

More By This Author: