Post Session: Quick Review

Indian equity benchmarks crashed in Thursday’s trading session, with both Sensex and Nifty closing the day over 2% cut, as traders remained cautious about escalating tensions in the Middle East following Iran's ballistic missile attack against Israel. Stronger-than-expected U.S. private sector employment data also dimmed prospects of aggressive rate cuts by the US Fed. Indices made a gap-down opening, as the foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 5,579 crore on October 1. Some cautiousness came as the Sebi’s six-step plan to curb retail participation in speculative index derivatives may lead to a substantial drop in volumes - potentially by 30-40 per cent. 

Losses got intensified in the second half of the session, as some pessimism came as goods and services tax (GST) revenue growth rate declined in September to Rs 1.73 lakh crore as the rise in collections from domestic transactions as well as imports slowed. In August 2024, the mop-up was Rs 1.75 lakh crore. Traders got cautious amid a private report that the escalating tension in the Middle East, following Iran’s missile attack on Israel, can disrupt oil supply. No wonder, oil prices spiked after the news of Iran’s military operation broke out. There is fear that the regional conflict may snowball into a wider war which can alter the trajectory of interest rates globally. The major central banks in several major advanced economies, except Japan, and emerging markets have moved towards easing their monetary policies. However, the Middle East crisis is set to pose a new challenge for central banks.

On the global front, European markets were trading mostly in red, after the UK service sector activity continued to expand in September amid rising domestic demand, though the pace of growth eased since August. The final survey data from S&P Global showed that the S&P Global Services Purchasing Managers' Index dropped to 52.4 in September from 53.7 in the previous month. The flash score was 52.8. However, a reading above 50 indicates expansion in the sector. Asian markets settled mixed on Thursday, as the private sector in Singapore continued to expand in September, albeit at a slower pace, with a PMI score of 56.6. That's down from 57.6 in August, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, agriculture sector stocks remained in focus as the data made available by state-run weather bureau India Meteorological Department showed southwest monsoon rains in India hit four years high this season, experiencing about 108 per cent of the long period average at 934.8 mm. Above-normal monsoon rains helped farmers sow more crops this Kharif season and it bodes well for the overall agriculture sector, which is the mainstay source of livelihoods for millions of Indians. Besides, NBFCs stocks were in watch, as Crisil Ratings has said that non-banking financial companies (NBFCs) are increasingly attempting to access funding sources beyond banks, such as through non-convertible debentures (NCD), commercial papers (CP), foreign currency borrowings (FCB) and securitisation, to continue their growth march. 

The BSE Sensex ended at 82497.10, down by 1769.19 points or 2.10% after trading in a range of 82434.02 and 83752.81. There were 1 stock advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 2.27%, while Small cap index was down by 1.84%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 4.49%, Capital Goods down by 3.18%, Auto down by 2.94%, Industrials down by 2.75% and Oil & Gas down by 2.52%, while there were no gaining sectoral indices on the BSE. (Provisional)

The only gainer on the Sensex was JSW Steel up by 1.18%. On the flip side, Larsen & Toubro down by 4.18%, Axis Bank down by 4.12%, Tata Motors down by 4.08%, Reliance Industries down by 3.91% and Maruti Suzuki down by 3.90% were the top losers. (Provisional)

Meanwhile, applauding the Insolvency and Bankruptcy Board of India (IBBI) for the noteworthy achievements of the Insolvency and Bankruptcy Code (IBC) in the short span of 8 years, India's G20 Sherpa and Former CEO of NITI Aayog Amitabh Kant has highlighted that India's global ranking in World Bank’s Ease of Doing Business Index improved significantly, jumping 79 positions from 142 in 2014 to 63 in 2016, thanks to the transformative framework established by the IBC.

Kant characterized the IBC as a ‘lighthouse of a new era,’ emphasizing its role in promoting credit discipline and contributing to a historic reduction in non-performing assets (NPAs). Citing the Reserve Bank of India’s report from June 2024, he highlighted that the gross non-performing assets have reached a 12-year low of 2.8%, with net non-performing assets at 0.6%. These statistics underscore the positive impact of the IBC on the Indian economy.

The Insolvency and Bankruptcy Board of India celebrated its Eighth Annual Day on October 1, 2024. The 8th Annual Day of IBBI was a momentous occasion, reflecting on the achievements and contributions made in the field of insolvency and bankruptcy over the years.

The CNX Nifty ended at 25250.10, down by 546.80 points or 2.12% after trading in a range of 25230.30 and 25639.45. There were 2 stocks advancing against 48 stocks declining on the index. (Provisional)

The only gainers on Nifty were JSW Steel up by 1.15% and ONGC up by 0.03%. On the flip side, BPCL down by 5.27%, Shriram Finance down by 4.51%, Larsen & Toubro down by 4.27%, Axis Bank down by 4.15% and Tata Motors down by 4.09% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC fell 60.15 points or 0.8% to 7,517.44 and Germany’s DAX lost 114.46 points or 0.6% to 19,050.29, while UK’s FTSE 100 increased 26.3 points or 0.32% to 8,317.16.

Asian markets settled mixed on Thursday due to signs of escalating geopolitical tensions in the Middle East following the conflict between Iran and Israel. Meanwhile, robustness in the US jobs market reinforced expectations that the US central bank will not rush to cut interest rates. Mainland Chinese markets and South Korean markets were closed for the National Day holiday, while Taiwan market was shut down for Typhoon Krathon. Japanese shares gained after Japanese Prime Minister Shigeru Ishiba said the country is not in an environment for further rate hikes, while the yen extended its drop. Hong Kong shares dropped as real estate and technology shares led the falls.