Benchmarks end flat with negative bias on Thursday

Indian equity benchmarks ended flat with a negative bias on Thursday, as unabated foreign fund outflows and disappointing Q2 earnings dented investor sentiment. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 5,684.63 crore on Wednesday, according to exchange data. After making a cautious start, key gauges slipped into red as traders got cautious with Member of Economic Advisory Council to the Prime Minister (EAC-PM) Sanjeev Sanyal’s statement that artificial intelligence (AI) will both create and destroy jobs and a lot depends on how it is adopted. He claimed AI will impact highly skilled people and functions will be disintermediated. However, markets soon erased some of their initial losses but remained muted throughout the session as some pessimism remained among traders with Finance Minister Nirmala Sitharaman stating that India will impose restrictions on foreign direct investment (FDI) in the national interest to ensure safeguards due to its location in a highly sensitive neighbourhood.  

However, losses were limited as traders took support with minutes of the Reserve Bank of India (RBI) monetary policy committee's latest meeting stating that India's food inflation expected to ease by Q4 of fiscal year 2024-25 on better kharif arrivals and rising prospects of a good rabi season, despite a significant pick-up in September inflation print. Some support also came with the survey showing that growth in India's business activity picked up slightly in October after softening last month, led by stronger demand in the manufacturing sector. It also showed job creation rose at the fastest pace since February 2006. HSBC's flash India Composite Purchasing Managers' Index, compiled by S&P Global, rose to 58.6 this month from September's final reading of 58.3, which was a 10-month low. 

On the global front, European markets were trading higher as strong earnings from a slew of companies and dovish comments from Bank of England (BoE) Governor Andrew Bailey offset disappointing business activity readings from the region. Asian markets settled mostly down on Thursday following the broadly negative cues from Wall Street, as traders reacted to rising bond yields and amid bets the US Fed will take a more measured approach on interest rate cuts. The continued tension in the Middle East also weighed on the markets. 

Finally, the BSE Sensex fell 16.82 points or 0.02% to 80,065.16, and the CNX Nifty was down by 36.10 points or 0.15% to 24,399.40. 

The BSE Sensex touched high and low of 80,259.82 and 79,813.02 respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.13%, while Small cap index was down by 0.72%.

The top gaining sectoral indices on the BSE were PSU up by 0.69%, Bankex up by 0.54%, Utilities up by 0.48%, Healthcare up by 0.43% and Power up by 0.42%, while FMCG down by 2.66%, Realty down by 1.21%, Telecom down by 1.02%, IT down by 0.64% and Industrials down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.77%, Mahindra & Mahindra up by 1.35%, Titan Company up by 1.28%, SBI up by 1.15% and Adani Ports & SEZ up by 1.02%. On the flip side, Hindustan Unilever down by 5.83%, Nestle down by 2.88%, ITC down by 1.81%, Maruti Suzuki down by 1.61% and Asian Paints down by 0.65% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has said that India wants to enhance its influence in the world as one in every six persons is Indian and the world cannot ignore India's economy. Sitharaman stated that no country, whether US which is far away or China which is very close cannot ignore India. She stated that India has always backed multilateral institutions and did not at any time seek to undermine any multilateral institution. She said that expectations pinned on multilateral institutions are fissured away as no solutions are coming out of them.

On how nations like India and other big emerging markets step up and play a role that helps to take ownership of that process and drive the reform forward, Sitharaman said, 'Yes, absolutely possible. And on this, I just want to again start from where a thought of my Prime Minister came in and this is well thought through. He once said India's priority is not to impose its dominance. In the sense we have the biggest democracy, we have in the world, the largest population but to enhance its influence. Now why do we want to have our influence enhanced? It's only because the fact that today one in every six person in the world is an Indian and you just cannot ignore our economy and the way in which it is growing, that's the second.'

She added ‘And third, the skilled manpower which today is in India and also everywhere else running large corporations which are for running institutions which are in large countries, developed countries. But yet that particular point that Larry mentioned, that in today's world, the course which developed countries took, starting from producing textiles, cycles, bicycles and something else, and reaching development, is no longer available. It is going to be something else’.

The CNX Nifty traded in a range of 24,480.65 and 24,341.20. There were 26 stocks advancing against 24 stocks declining on the index. 

The top gainers on Nifty were Ultratech Cement up by 2.66%, Shriram Finance up by 1.82%, Mahindra & Mahindra up by 1.48%, Titan Company up by 1.45% and Grasim Industries up by 1.40%. On the flip side, Hindustan Unilever down by 5.81%, SBI Life Insurance down by 4.67%, Hindalco down by 3.71%, Nestle down by 2.76% and Bajaj Auto down by 2.69% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 46.11 points or 0.56% to 8,304.75, France’s CAC rose 58.53 points or 0.78% to 7,556.01 and Germany’s DAX gained 125.19 points or 0.65% to 19,502.81. 

Asian markets settled mostly down on Thursday tracking Wall Street’s fell overnight with uncertainty ahead of outcome of the November 5 US presidential election and bets the US central bank will take a more measured approach on interest rate cuts. Seoul shares declined on tech losses and data revealed South Korea narrowly avoided a technical recession in the third quarter, growing just 0.1% on-quarter far below the market expectations of 0.5% gain. Chinese shares dropped on concerns that the US-China tech war will escalate regardless of whether Donald Trump or Kamala Harris wins the US presidential election. Although, Japanese shares gained as the yen weakened against the US dollar after BoJ governor Kazuo Ueda said it is becoming difficult to judge how large future rises in borrowing costs will be.