Post Session: Quick Review

Indian equity markets came off from their intraday high levels and ended with marginal gains. Sensex settled just above the psychological 81,600 level, while Nifty closed shy of 25,000 mark. Throughout the day, markets traded with limited gains ahead of Q2FY25 earnings. Investors were eyeing for the second quarter results of IT bellweather TCS which kicks off the earnings season for India Inc. As for broader indices, the BSE Mid cap index ended in red, while Small cap index ended in green.

Markets made positive start and remained higher following the broadly positive cues from Wall Street overnight as well as mostly positive trend in Asian counterparts, as traders remain optimistic about more interest rate cuts by the US Fed, and several other central banks. The minutes from the US Fed's September meeting showed officials agreed to cut interest rates, but were unsure how aggressive to get. Traders overlooked private report said that India's retail inflation in September likely overshot the Reserve Bank of India's (RBI) 4 per cent medium-term target for the first time since July due to a persistent rise in vegetable prices and a lower year-ago base. In afternoon session, indices came off from day’s highs but continued to trade in green. Sentiments remained upbeat, as the Reserve Bank of India (RBI) in its latest ‘Industrial Outlook Survey of the Manufacturing Sector for Q2:2024-25’ has said that manufacturers maintained their optimism on demand conditions for Q3:2024-25. Besides for Q3:2024-25, cost of financing and salary outgo are likely to rise, while pressures from raw material cost are expected to ease, and selling price growth momentum may continue. The business expectations index (BEI) improved to 120.3 in Q3:2024-25 from 119.1 in the previous quarter. In late afternoon session, markets remained in green and ended with minor gains.

On the global front, European markets were trading lower due to lingering Middle East tensions and ahead of U.S. CPI data due later in the day. Asian markets ended mostly in green with Chinese and Hong Kong markets leading the surge on hopes that policymakers will announce more stimulus to revive growth at a press briefing by China's finance ministry on Saturday. Back home, credit rating agency ICRA in its latest report has said that the Indian construction entities are likely to maintain healthy revenue growth in FY25 with a projected YoY growth of 12-15% in this fiscal, aided by an adequate order book position and the government’s thrust on infrastructure activity.

The BSE Sensex ended at 81,611.41, up by 144.31 points or 0.18% after trading in a range of 81,538.94 and 82,002.84. There were 16 stocks advancing against 13 stocks declining on the index, while 1 stock remained unchanged. (Provisional) 

The broader indices ended mixed; the BSE Mid cap index declined 0.36%, while Small cap index was up by 0.43%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.11%, Power up by 0.75%, Utilities up by 0.70%, Industrials up by 0.65% and PSU was up by 0.52%, while Healthcare down by 1.39%, IT down by 1.07%, TECK down by 0.87%, Realty down by 0.42% and FMCG was down by 0.42% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 3.90%, JSW Steel up by 1.82%, HDFC Bank up by 1.63%, Power Grid up by 1.58% and Indusind Bank up by 1.43%. On the flip side, Tech Mahindra down by 2.82%, Sun Pharma down by 1.90%, Infosys down by 1.68%, Titan Company down by 1.00% and Tata Motors down by 0.97% were the top losers. (Provisional)

Meanwhile, expressing some cautiousness, Finance Minister Nirmala Sitharaman has said the Carbon Border Adjustment Mechanism or CBAM is unilateral and arbitrary and will hurt India’s exports after its implementation by the European Union. CBAM are tariffs that will apply on energy-intensive goods imported into the European Union (EU). The EU has decided to impose carbon tax CBAM from January 1, 2026, on seven carbon-intensive sectors, including steel, cement, and fertiliser. Engineering goods will come under the purview of this import duty. She said it is a border tax introduced by the EU, and such moves are going to create a trade barrier.

Against this, she said, India has voiced its concern several times to the EU, and the government is also looking at ways to reduce the cost of transactions. The decision by the EU may affect the profitability of Indian exporters, as Europe is among the top export destinations for the country. India’s total trade with the EU was $137.41 billion in 2023-24, with imports at $61.48 billion and exports at $75.93 billion. However, she said it was unlikely that India’s opposition to the CBAM would be a barrier to finalising the Free Trade Agreement (FTA) with the EU. She said ‘I am sure it won’t be escalated to the level of hurting the (FTA) talks’.

She further exuded the confidence that India would achieve net Zero by 2070. She said ‘we are on track to achieve 2030 carbon emission reduction goals’, and added that the Budget has allocated made huge allocation for battery storage. On India’s green initiatives, Sitharaman said Prime Minister Narendra Modi has led from the front in setting the agenda for the country, and the commitments given in the UN climate change conference COP 21 were fulfilled by India well ahead of time, with its own resources.

On the decarbonisation of India’s economy, she said the government has brought in the PLI (production-linked incentive) scheme for 13 sunrise sectors, which included green energy. She said ‘We also have PLI for automobiles and electric vehicles. So, budget has never been a constraint in promoting the green sectors’. About the ‘PM Surya Ghar Muft Bijli Yojana’, she said the scheme has been provided budgetary support and received an overwhelming response from the citizens. She added two million applications have come since its launch, and the target is 10 million.

The CNX Nifty ended at 24,998.45, up by 16.50 points or 0.07% after trading in a range of 24,979.40 and 25,134.05. There were 23 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 4.18%, HDFC Bank up by 1.79%, Bharat Electronics up by 1.59%, Maruti Suzuki up by 1.44% and Power Grid up by 1.39%. On the flip side, Cipla down by 3.67%, Tech Mahindra down by 2.36%, Trent down by 2.34%, Sun Pharma down by 2.23% and Hero MotoCorp down by 1.77% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 8.24 points or 0.1% to 8,235.50, France’s CAC fell 17.19 points or 0.23% to 7,542.90 and Germany’s DAX was down by 30.2 points or 0.16% to 19,224.73.

Asian markets settled mostly higher on Thursday tracking Wall Street gains overnight ahead of key US inflation readings due this week that could influence the Fed's interest-rate trajectory. Meanwhile, minutes from the Federal Reserve's September meeting released overnight showed a substantial majority of Federal officials at the meeting favoured the larger half-point rate cut, but were divided over the economic outlook and are in no rush for another half-point cut. Chinese and Hong Kong shares led gains on expectations that Chinese policymakers will announce more stimulus to revive growth at a press briefing by China's finance ministry on Saturday. Japanese shares gained as China's central bank PBoC launched a new Swap Facility with an initial scale of 500 billion yuan ($71 billion) to bolster the capital market.