Post Session: Quick Review

Indian equity markets extended their southward journey for yet another day with the Sensex and the Nifty losing around 318.76 and 86.05 points, respectively ahead of weekly F&O expiry. Sell off across the globe dampened the investors sentiments. Positive India’s trade deficit data failed to cheer markets sentiments. As for broader indices, the BSE Mid cap index ended in red, while Small cap index concluded in green.

Markets made cautious start and turned volatile following the broadly negative cues from Wall Street overnight as well as mixed cues from Asian counterparts, as some traders looked to cash in on recent strength in the markets and booked some profits. Traders were concerned as Reserve Bank of India (RBI) data showed that India’s outward foreign direct investment (FDI) commitments declined by about $900 million to $3.72 billion in September 2024, compared to $4.63 billion in September 2023. Besides, SBI research stated that the soaring figures of retail inflation in September could force the Reserve Bank of India (RBI) to continue with neutral stance for a longer duration, and added that first rate cut could be based on growth, and need not be inflation. The research stated on the rationale that if inflation remains sketchy in the coming months, the apex bank will consider growth as the criteria for rate cut. In afternoon session, markets added more losses, as traders paid no heed towards report that Reserve Bank of India (RBI) deputy governor Michael Debabrata Patra has said the retail inflation is projected to average 4.5 per cent in 2024-25 and align with the target on a durable basis by 2025-26. In last leg of trade, markets come off from day’s lows but soon once again extended their losses. Investors ignored private report stated that India’s trade deficit narrowed to a five-month low of $20.8 billion in September from $29.7 billion a month back as merchandise export growth turned positive for the first time in three months.

On the global front, European markets were trading mostly in red as the focus now turns to upcoming earnings from TSMC and Morgan Stanley. Asian markets ended mostly in red due to lingering Middle East tensions, shifting U.S. rate cut expectations and reports suggesting that the U.S. is mulling a cap on export licenses for AI chips to specific countries. Back home, telecom stocks remained in focused after communications minister Jyotiraditya Scindia said India is resolved to lead the world in 6G, and termed the telecom sector of the country as aggressive and ambitious. He added said with the Bharat 6G Alliance, India hopes to contribute at least 10 per cent patents to 6G standardisation.

The BSE Sensex ended at 81,501.36, down by 318.76 points or 0.39% after trading in a range of 81,358.26 and 81,932.15. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.10%, while Small cap index was up by 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 0.91%, Realty up by 0.64%, Energy up by 0.25%, Oil & Gas up by 0.20% and Basic Materials was up by 0.10%, while IT down by 1.17%, Auto down by 0.97%, TECK down by 0.76%, Consumer Disc down by 0.69% and Utilities was down by 0.40% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC Bank up by 0.92%, Bharti Airtel up by 0.91%, Reliance Industries up by 0.75%, Asian Paints up by 0.37% and SBI up by 0.16%. On the flip side, Mahindra & Mahindra down by 2.87%, Infosys down by 2.05%, JSW Steel down by 1.28%, Adani Ports down by 1.20% and Tata Motors down by 1.13% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) deputy governor Michael Debabrata Patra has said the retail inflation is projected to average 4.5 per cent in 2024-25 and align with the target on a durable basis by 2025-26. The government has tasked the RBI to ensure that consumer price index (CPI) based retail inflation at 4 per cent with a tolerance band of +/- 2 per cent around it. The inflation has remained below 6 per cent in the last three months.

Patra also stressed that the Indian experience is unique in view of the incidence of repetitive shocks to food and fuel prices, which challenged the conduct of monetary policy. He said in India, price stability is a shared responsibility under which the government sets the target, and the central bank achieves it. This allows monetary-fiscal coordination without posing risks to financial stability, fiscal consolidation or growth - perhaps a template for countries vulnerable to inflationary pressures emanating from supply shocks.

He further said that in the years ahead, the conduct of inflation targeting (IT) - based monetary policy may face even greater challenges. Central banks face an existential threat to their central mandates from climate change through supply shocks such as food and energy shortages and a decline in productive capacity. He added that while formulating monetary policy, it is considered good housekeeping to evaluate the balance of risks. From this perspective, IT policy frameworks of the future need to be more robust, realistic and nimble, while exploiting synergies with prudential, fiscal and structural policies and leveraging.

The CNX Nifty ended at 24,971.30, down by 86.05 points or 0.34% after trading in a range of 24,908.45 and 25,093.40. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC Life Insurance up by 1.76%, Dr. Reddy's Lab up by 1.50%, Grasim Industries up by 1.03%, Bharti Airtel up by 0.97% and HDFC Bank up by 0.93%. On the flip side, Trent down by 3.92%, Mahindra & Mahindra down by 2.78%, Infosys down by 2.00%, Hero MotoCorp down by 1.95% and Adani Ports down by 1.16% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC fell 41.99 points or 0.56% to 7,479.98 and Germany’s DAX was down by 66.02 points or 0.34% to 19,420.17. On the flip side, UK’s FTSE 100 was up by 49.45 points or 0.6% to 8,298.73.

Asian markets settled mostly down on Wednesday tracking Wall Street’s fall overnight after data showed business activity at manufacturing firms in New York State contracted unexpectedly in October. Market sentiments weakened further by lingering geopolitical tensions in the Middle East and reports suggesting that the US government is mulling a cap on export licenses for AI chips to specific countries. Meanwhile investors are focusing to upcoming US economic data that will influence expectations about the US Federal Reserve's interest rate cuts. The Atlanta Fed's Raphael Bostic said he penciled in just one more rate cut of 25 basis points this year, while San Francisco Fed's Mary Daly said one or two cuts in 2024 would be reasonable. Chinese shares gained marginally as China's housing minister set to hold a press briefing on Thursday that will likely provide more details of measures to promote the steady and healthy development of the property sector. Japanese shares declined on tracking chip shares sell-off after ASML Holding warned of a slower-than-expected recovery for some semiconductor end-markets after orders came in below expectations for the third quarter as chip makers held back spending on key production equipment.