Post Session: Quick Review

Indian equity markets spent most of their time in green territory but selling pressure in last leg of trade forced indices to end below neutral lines. Traders avoided to take risk ahead of HSBC Composite Purchasing Managers' Index (PMI) Flash, HSBC Manufacturing PMI Flash, HSBC Services PMI Flash data due on tomorrow.  As for broader indices, the BSE Mid cap index ended with gains of over half a percent, while Small cap index concluded with gain of over a percent.

Markets made cautious start following a lackluster trade on Wall Street overnight as well as mixed cues from Asian counterparts. However, soon markets gained traction, as some support came after Michael Debabrata Patra, deputy governor, Reserve Bank of India (RBI) said India is likely to recover to its long term growth trend of 8 per cent. Traders took note of S&P Global Market Intelligence’s statement that India's growth, although moderating, remains strong with a forecasted average of 6.8 per cent for the fiscal year 2024 25 and 6.6 per cent for 2025 26. It also said despite a slowdown in economic momentum due to weaker public sector investment, the outlook for India's economy is buoyed by several positive factors. Traders overlooked report that International Monetary Fund (IMF) kept its growth forecasts for India unchanged at 7 per cent and 6.5 per cent for FY25 and FY26, respectively. It held that pent up demand accumulated during the pandemic has been exhausted as the economy “reconnects” with its potential growth. Markets remained higher in afternoon session despite labour ministry statement stated that retail inflation for farm workers and rural labourers increased to 6.36 per cent and 6.39 per cent, respectively, in September from 5.96 per cent and 6.08 per cent in August this year. In last leg of trade, markets come off from day’s high levels tracing weak cues from European markets and settled in red terrain. 

On the global front, European markets were trading mostly in red due to concerns about slowing Chinese growth and the widening U.S. fiscal deficit. Asian markets ended mixed tracking elevated U.S. treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and fears the U.S. may be heading toward fiscal collapse. Back home, domestic rating agency Crisil has said that the Reserve Bank of India’s (RBI) recent notification asking financiers to review their gold loan practices can slow down loan growth in the near-term and lead to an uptick in asset quality stress.

The BSE Sensex ended at 80,081.98, down by 138.74 points or 0.17% after trading in a range of 79,891.68 and 80,646.31. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.98%, TECK up by 1.25%, Telecom up by 0.41%, FMCG up by 0.27% and Consumer Durables was up by 0.14%, while Power down by 1.39%, Capital Goods down by 1.17%, Healthcare down by 0.85%, Industrials down by 0.75% and Auto was down by 0.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Finance up by 4.95%, Tech Mahindra up by 2.01%, TCS up by 1.31%, HDFC Bank up by 1.23% and HCL Tech up by 1.16%. On the flip side, Mahindra & Mahindra down by 3.04%, Sun Pharma down by 2.79%, Larsen & Toubro down by 1.77%, Adani Ports down by 1.72% and Power Grid down by 1.69% were the top losers. (Provisional)

Meanwhile, International Monetary Fund (IMF) in the World Economic Outlook has said that India's Gross Domestic Product (GDP) growth is likely to moderate from 8.2 per cent in 2023 to 7 per cent in 2024 and 6.5 per cent in 2025 because the pent-up demand accumulated during Covid has exhausted, as the economy reconnects with its potential. About the global economy, the IMF said the battle against inflation has largely been won, even though price pressures persist in some countries. It said after peaking at 9.4 per cent year over year in the third quarter of 2022, headline inflation rates are now projected to reach 3.5 per cent by the end of 2025, below the average level of 3.6 per cent between 2000 and 2019.

It has projected global economic growth to stay steady at 3.2 per cent in 2024 and 2025, even though a few countries, especially low-income developing countries, have seen sizable downside growth revisions. According to Pierre-Olivier Gourinchas, a French economist and IMF Chief Economist, the global economy remained unusually resilient throughout the disinflationary process. He said ‘Growth is projected to hold steady at 3.2 per cent in 2024 and 2025, but some low-income and developing economies have seen sizable downside growth revisions, often tied to intensifying conflicts’.

In advanced economies, growth in the United States is strong, at 2.8 per cent this year, but will revert toward its potential in 2025. For advanced European economies, a modest growth rebound is expected next year, with output approaching potential. The growth outlook is very stable in emerging markets and developing economies, around 4.2 per cent this year and next, with continued robust performance from emerging Asia. Despite the good news on inflation, downside risks are increasing and now dominate the outlook. An escalation in regional conflicts, especially in the Middle East, could pose serious risks for commodity markets.

The CNX Nifty ended at 24,435.50, down by 36.60 points or 0.15% after trading in a range of 24,378.10 and 24,604.25. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finance up by 4.76%, Tech Mahindra up by 2.32%, Bajaj Auto up by 2.11%, Tata Consumer up by 1.63% and HCL Tech up by 1.26%. On the flip side, Mahindra & Mahindra down by 3.25%, Sun Pharma down by 2.55%, Power Grid down by 1.81%, NTPC down by 1.79% and Shriram Finance down by 1.74% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 18.39 points or 0.22% to 8,288.15 and France’s CAC was down by 26.44 points or 0.35% to 7,508.66. On the flip side, Germany’s DAX was up by 14.24 points or 0.07% to 19,436.15. 

Asian markets settled mixed on Wednesday, tracking elevated US treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and concerns about the US fiscal deficit. Japanese shares declined as investors were reluctant to place major bets ahead of the country's upcoming lower house election results. Meanwhile, Chinese shares rose after reports emerged that the government may deploy as much as 2 trillion yuan (US$280 billion) of special treasury bonds to establish a stock market stabilization fund. Seoul shares gained with automakers and technology shares leading the rally, while the Korean won continued to decline against the dollar.