Key gauges fall for sixth day in row

Indian equity benchmarks ended lower and extended the losing streak for the sixth consecutive session on Monday amid selling across the sectors, barring TECK and IT stocks. Worries over the escalation of the conflict in the Middle East weighed on investor sentiment. The markets opened higher as traders took support with a survey by Confederation of Indian Industry (CII) showing that private capital expenditure by India Inc. is likely to increase amid improving domestic demand despite a weak external environment and rising shipping costs. Some support also came as the Reserve Bank said India’s forex reserves jumped by $12.588 billion to a new all-time high of $704.885 billion for the week ended September 27.  Traders also took a note of Finance Minister Nirmala Sitharaman’s statement that India will witness the steepest rise in living standards of the common man on the back of the government’s initiatives and the efforts towards doubling per capita income in few years.  

However, key indices erased all the gains in late morning deals and slipped into red to end near day's lows. Traders turned cautious with report that foreign investors turned net sellers in October, offloading shares worth Rs 27,142 crore in just the first three days of October due to intensifying conflict between Israel and Iran, a sharp rise in crude oil prices, and improved performance of Chinese markets. Traders also remained on sidelines ahead of an upcoming RBI monetary policy meeting, the release of September-quarter corporate earnings and the outcome of state elections in Haryana and Jammu and Kashmir. Traders overlooked the Ministry of Labour & Employment’s statement that India has witnessed significant employment growth of nearly 36%, adding around 170 million jobs during 2016-17 and 2022-23. With a robust democracy, dynamic economy, and a culture that celebrates unity in diversity, India’s journey toward becoming a global powerhouse continues to inspire the world. 

On the global front, European markets were trading mostly in red after official data showed Germany's factory orders declined at a faster-than-expected pace in August. Asian markets settled higher on Monday following the broadly positive cues from Wall Street, as traders reacted to stronger than expected US jobs growth data that eased concerns about the economic outlook, but dashed hopes of aggressive rate cuts in the coming months. However, escalating tensions in the Middle East weighed on market sentiment. Back home, on the sectoral front, banking stocks were in watch with a private report that banks recorded a higher growth year-on-year (Y-o-Y) in raising deposits during the second quarter of financial year 2025 (Q2FY25) compared to Q1FY25, owing to intensified efforts to raise liabilities by offering higher rates and innovative schemes.

Finally, the BSE Sensex fell 638.45 points or 0.78% to 81,050.00, and the CNX Nifty was down by 218.85 points or 0.87% to 24,795.75.      

The BSE Sensex touched high and low of 82,137.77 and 80,726.06 respectively. There were 7 stocks advancing against 23 stocks declining on the index. 

The broader indices ended in red; the BSE Mid cap index fell 1.85%, while Small cap index was down by 3.27%.

The few gaining sectoral indices on the BSE were TECK up by 0.46% and IT up by 0.32%, while Utilities down by 3.63%, PSU down by 3.41%, Power down by 3.14%, Basic Materials down by 2.54% and Telecom down by 2.49% were the top losing indices on BSE. 

The top gainers on the Sensex were Mahindra & Mahindra up by 1.46%, ITC up by 1.40%, Bharti Airtel up by 1.31%, Infosys up by 0.80% and Bajaj Finance up by 0.74%. On the flip side, Adani Ports & SEZ down by 4.17%, NTPC down by 3.50%, SBI down by 3.36%, Power Grid Corporation down by 2.92% and Indusind Bank down by 2.43% were the top losers.

Meanwhile, the Global Trade Research Initiative (GTRI) has said that the escalation in the US-China trade war is expected to help India increase its exports and attract investments from American companies. It said that last month, the US Senate introduced two bills that could intensify the trade war and have major global economic impacts if passed.

GTRI stated that the 'Neither Permanent Nor Normal Trade Relations Act' (PNTR Act) and the 'Axing Non-Market Tariff Evasion Act' (ANTE Act) aim to counter China's trade practices by raising tariffs and imposing new trade barriers. The PNTR Act seeks to phase out China's favourable trade status, while the ANTE Act targets non-market economies like China and Russia with tougher measures. While these bills aim to protect US industries, they also create opportunities for countries like India to grow their manufacturing sectors. As US companies look for alternatives to China, India could see increased investment in electronics, textiles, and manufacturing, enhancing its position in global supply chains.

In this background, it said India should reconsider its proposals to invite Chinese firms and investment aimed at boosting exports. The higher tariffs on Chinese products present an opportunity for India to strengthen its manufacturing sector. It also said that both bills create a potential for growth in local industries. As US companies reduce their reliance on China, India's expanding manufacturing sector, especially in electronics, textiles, and other industries, could attract more investment.

The GTRI suggested to the government that India should actively work to attract investment from multinational companies seeking alternatives to China. It will be essential to boost domestic production capabilities, especially in electronics, machinery, textiles, and solar panel manufacturing, to fill the gap left by reduced Chinese imports to the US. India should also reconsider inviting Chinese firms for export-related investments, as US actions against Chinese companies could impact India's own exports if tied to Chinese investments.

The CNX Nifty traded in a range of 25,143.00 and 24,694.35. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Trent up by 1.86%, Mahindra & Mahindra up by 1.48%, Bharti Airtel up by 1.32%, ITC up by 1.28% and Bajaj Finance up by 0.67%. On the flip side, Adani Ports & SEZ down by 4.29%, Bharat Electronics down by 3.54%, Adani Enterprises down by 3.20%, Coal India down by 3.18% and NTPC down by 3.10% were the top losers. 

European markets were trading mostly in red; France’s CAC fell 2.46 points or 0.03% to 7,538.90 and Germany’s DAX lost 60.73 points or 0.32% to 19,060.20, while UK’s FTSE 100 increased 22.75 points or 0.27% to 8,303.38.

Asian markets settled higher on Monday tracking Wall Street gains last Friday as upbeat US jobs data raised optimism about the American economy, the world’s largest, even though the data dashed expectations of aggressive rate cuts in the coming months. Meanwhile, investors were awaiting inflation data and comments from US Federal Reserve officials for further cues on interest rate path. Japanese shares lead gains and the yen slumped against the dollar after Japan's top currency diplomat issued a warning against speculative moves on the foreign exchange market. Moreover, Hong Kong shares surged after top US banks Citi and Goldman Sachs joined peers Morgan Stanley and UBS in raising their targets for key China indices, while more Chinese stimulus measures are expected. Chinese market remained closed until Tuesday for the Golden Week holiday.