Post Session: Quick Review

Indian equity markets ended flat with negative bias on Tuesday after a weak HSBC India Manufacturing PMI and output of eight core industries data dampened the investors sentiments. Volatility occurred during the day following hawkish comments from Federal Reserve Chair Jerome Powell that submerged bets of big interest rate cuts, while Mid-East tension kept risk sentiment in check. As for broader indices, the BSE Mid cap index and Small cap index ended in green. 

After making cautious start, soon markets added points for little time tracking broadly positive cues from global peers. Sentiments got boost as NITI Aayog CEO B V R Subrahmanyam said India's industrial sector is growing at a fast pace and the country can now aim to achieve 9% plus economic growth. Subrahmanyam said India's manufacturing sector has been generating sufficient number of jobs. However, indices failed to hold their initial gains and turned negative as sentiments got hit after government data showed that the growth in production of eight key infrastructure sectors entered a negative zone after three-and-a-half years, contracting 1.8% in August 2024 due to decline in output of coal, crude oil, natural gas, refinery products, cement and electricity. Also, Reserve Bank of India said the country’s current account deficit widened marginally to $9.7 billion or 1.1% of GDP in April-June 2024, as against $8.9 billion or 1% in the year-ago period. Further, markets wavered between gains and losses. Traders were cautious as the HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell to 56.5 last month from 57.5 in August - the weakest since January - and slightly below a preliminary estimate of 56.7. Growth in India's manufacturing industry cooled to an eight-month low in September as solid demand and output eased slightly. In late afternoon session, markets continued their volatile trade ahead of HSBC Composite PMI Final and HSBC Services PMI Final data going to be out on October 04. 

On the global front, European markets were trading mostly in green after ECB President Christine Lagarde hinted at another cut in interest rates at the Bank's next policy meeting in October, citing falling inflation and data pointing to a slowdown in the region. Asian markets ended mostly in green as investors react to comments from Federal Reserve Chair Jerome Powell. Powell indicated inflation is cooling and interest rates may decrease further over time but there is no rush to cut rates quickly. Back home, ICRA in its latest report has said that revenues of Indian pharma companies are likely to expand by 9-11 per cent in the current financial year (FY25), albeit a moderation from the increase of 13-14 per cent recorded in the previous year.

The BSE Sensex ended at 84,266.29, down by 33.49 points or 0.04% after trading in a range of 84,098.94 and 84,648.40. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.56%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.05%, TECK up by 0.72%, Basic Materials up by 0.71%, Consumer Durables up by 0.41% and Auto was up by 0.30%, while Telecom down by 0.86%, Oil & Gas down by 0.71%, Energy down by 0.64%, Utilities down by 0.35% and Realty was down by 0.24% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tech Mahindra up by 2.93%, Mahindra & Mahindra up by 2.22%, Kotak Mahindra Bank up by 1.55%, Infosys up by 1.53% and SBI up by 1.19%. On the flip side, Indusind Bank down by 2.64%, Asian Paints down by 1.54%, Hindustan Unilever down by 1.27%, Tata Motors down by 0.96% and Tata Steel down by 0.86% were the top losers. (Provisional)

Meanwhile, India's manufacturing sector growth slowed down in the month of September, as rates of expansion in factory production and sales receded for the third straight month, both of which were at their weakest since the turn of the year but above their respective long-run averages. Besides, international orders rose at the slowest pace in a year-and-a-half. 

According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 56.5 in September as against 57.5 in August 2024, highlighting a robust improvement in the health of the sector that was nonetheless the weakest since January. With manufacturing growth softening throughout the second fiscal quarter, the average PMI reading slipped to its lowest since the three months to December 2023.

Despite this loss of growth momentum, net employment and quantities of purchases rose, while business confidence was broadly aligned with its long-run average. On the price front, there were moderate increases in input costs and selling charges. Positive demand trends, successful advertising and favourable client interest featured as the main determinants of sales growth among the qualitative part of the survey. The upturn, which was substantial but the slowest in 2024 so far, was reportedly curbed by fierce competition.

The CNX Nifty ended at 25,796.90, down by 13.95 points or 0.05% after trading in a range of 25,739.20 and 25,907.60. There were 20 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 3.06%, Mahindra & Mahindra up by 2.28%, Britannia up by 1.70%, Adani Enterprises up by 1.60% and Infosys up by 1.53%. On the flip side, Indusind Bank down by 2.62%, ONGC down by 1.90%, Asian Paints down by 1.55%, Bajaj Auto down by 1.53% and Titan Company down by 1.26% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 31.76 points or 0.39% to 8,268.71 and Germany’s DAX was up by 55.76 points or 0.29% to 19,380.69. On the flip side, France’s CAC was down by 8.79 points or 0.12% to 7,626.96.

Asian markets settled mostly higher on Tuesday ahead of US labor market data due this week that could offer more clarity on the pace of US interest rate cuts. Market sentiments improved further by tracking Wall Street gains overnight as markets react to remarks by US Fed Chair Jerome Powell, who suggested the Federal Reserve will continue to lower interest rates but stressed the downward path for interest rates is not on a preset course. Japanese shares gained on a weakening yen as the BoJ Summary of Opinions indicated no immediate plans for further rate hikes and a key survey showed that big manufacturer sentiment held steady in the third quarter. Meanwhile, Hong Kong, Chinese and South Korean share markets were closed for holidays.