Post Session: Quick Review

Indian equity benchmarks traded with massive losses during the day but in last leg of trade markets come off from day’s low points and ended with cut of over half a percent. Markets extended their southward journey for fifth session amid continued foreign outflows hit investors sentiments. Foreign institutional investors (FIIs) offloaded equities worth Rs 5,062.45 crore on October 24, according to exchange data. Traders closely watched earnings reports from heavyweights.  The broader indices, the BSE Mid cap index and Small cap index ended deep in red on last trading day of week.

Markets made slightly positive start but unable to protect their gains and slipped into red, as traders were concerned after rating agency CRISIL said the revenue growth of Indian companies for the July-September quarter is estimated to be 5-7 per cent year-on-year (Y-o-Y), marking the slowest growth in 16 quarters. Some cautiousness also came after Union Finance Minister Nirmala Sitharaman has stressed that job creation is the most critical issue worldwide, particularly given the persistent economic challenges and rapid technological advancements that are reshaping the labor market. In afternoon session, markets extended their losses to touch day’s low levels. Sentiments were downbeat with ratings agency ICRA’s report stating that the slew of regulatory measures and tighter funding conditions in the domestic markets to result in a steady slowdown in credit growth for the lenders, i.e. banks and non-bank financial companies (NBFCs). It estimates the incremental bank credit growth to slow down to Rs 19.0-20.5 trillion in FY2025, which will translate into a YoY growth of around 12%, compared to Rs 22.3 trillion in FY2024 (YoY growth of 16.3%). In last leg of trade, indices trimmed some of their losses with Nifty and Sensex settling near the psychological 24,200 and 79,400 levels, respectively.

On the global front, European markets were trading higher as market's focus on the health of the corporate sector. Geopolitical tensions in the Middle East as well as election uncertainty in the U.S. are also expected to weigh on market sentiment. Asian markets ended mixed after inflation in Japan's capital Tokyo fell below 2 percent for the first time since May. The data from the Ministry of Internal Affairs and Communications showed that excluding fresh food, consumer price inflation weakened to 1.8 percent in October from 2.0 percent in September. Back home, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the Indian pharmaceutical market (IPM) continued to deliver mid-single digit growth for the last three consecutive months at 5.3% in September 2024.

The BSE Sensex ended at 79,402.29, down by 662.87 points or 0.83% after trading in a range of 79,137.98 and 80,253.19. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.48%, while Small cap index was down by 2.44%. (Provisional)

The only gaining sectoral indices on the BSE were FMCG was up by 0.50%, while Oil & Gas down by 3.09%, Consumer Durables down by 2.74%, Energy down by 2.66%, PSU down by 2.56% and Utilities was down by 2.53% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 2.24%, Axis Bank up by 1.85%, Hindustan Unilever up by 0.96%, Sun Pharma up by 0.53% and ICICI Bank up by 0.51%. On the flip side, Indusind Bank down by 18.79%, Mahindra & Mahindra down by 3.56%, Larsen & Toubro down by 3.01%, NTPC down by 2.73% and Adani Ports down by 2.33% were the top losers. (Provisional)

Meanwhile, the rating agency Crisil in its latest report has said that India Inc is likely to have clocked a slower revenue growth of 5-7% on-year for the three months ended September, marking the slowest pace in the past 16 quarters, because of stagnant performance in the construction vertical, which accounts for a fifth of India Inc's revenue, besides a decline in the industrial commodities vertical and subdued growth in investment-linked sectors. The report is based on its analysis of 435 companies that account for almost half of the listed market capitalisation. These companies posted 8.3% growth in the April-June quarter.

The cement sector’s revenue growth also slipped 2-3% on a high base of the corresponding quarter last year and lower realisations due to weak prices. Additionally, sluggish government spending after elections slowed construction activity, which, along with above-normal monsoon, limited cement volume growth. The monsoon also impacted the petrochemicals sector, which reported flat on-year revenue growth in the second quarter. The agriculture sector, including fertilisers (2% of the sample set's revenue), saw a 20-22% drop in revenue due to fall in raw material prices.

On a positive note, the exports segment (around 22% of the sample set) grew around 5%. In this space, the pharmaceutical sector maintained its momentum with 11% revenue growth, driven by strong demand in regulated markets and easing of pricing pressure in the US. IT services (around 70% of the segment's revenue) experienced a more modest growth of 3-4%, as clients in the banking and financial services sectors in North America and Europe deferred non-essential projects.

Consumer discretionary, staple products and services (around 36% of the sample set's revenue) recorded 15% revenue growth. In the consumer discretionary products sector, two-wheeler players saw 15-16% revenue growth, driven by higher volumes due to rural recovery and price rise. The textiles sector saw volume-driven growth, with stable prices. In the consumer discretionary services vertical, telecom services’ revenue rose 12-13%, fuelled by tariff hikes across technologies, premium charges for 5G services and subscriber migration to plans with higher average revenue per user.

The ‘others’ vertical (2% of the sample set), clocked 4% on-year growth. Aluminium (80% of revenue contribution in this category) posted on-year growth of 3-4%, driven by higher global aluminium prices due to lower production in China. India Inc’s profitability is estimated to have improved 70-90 basis points (bps) on-year during the quarter. The overall earnings before interest, tax, depreciation, and amortisation (Ebitda) for around 435 companies grew around 10% on-year.

The CNX Nifty ended at 24,180.80, down by 218.60 points or 0.90% after trading in a range of 24,073.90 and 24,440.25. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 2.25%, Axis Bank up by 1.88%, Britannia up by 1.02%, Hindustan Unilever up by 0.92% and Sun Pharma up by 0.62%. On the flip side, Indusind Bank down by 18.63%, Adani Enterprises down by 4.83%, BPCL down by 4.71%, Shriram Finance down by 4.70% and Mahindra & Mahindra down by 3.73% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 5.72 points or 0.07% to 8,275.10, France’s CAC rose 6.53 points or 0.09% to 7,509.81 and Germany’s DAX was up by 44.66 points or 0.23% to 19,487.66.

Asian markets settled mixed on Friday ahead of Japanese elections set to take place this weekend, while uncertainty over the US presidential election also kept sentiments mixed. However, Chinese shares gained ahead of the upcoming session of China's top legislature in the first week of November to discuss a wide range of issues facing the world’s second-largest economy. In South Korea, the Kospi marginally rose after tech gains on Wall Street, even with investors remaining concerned over a possible slower pace of the Federal Reserve's interest rate cuts.