Post Session: Quick Review

Indian markets concluded the Tuesday’s trade near day’s high levels amid value buying in last leg of trade. Most part of the day, indices traded in red ahead of the release of key US economic data later in the week that could impact the expectations regarding how quickly the US Fed will lower interest rates. However, sharp recovery in late afternoon session helped markets to end in green. The broader indices, the BSE Mid cap index and Small cap index ended with gains of over half a percent.  

Markets made cautious start and remained lower tracking mostly negative cues from Asian counterparts as traders remain cautious with rising geopolitical tensions in the Middle East. Traders paid no heed towards finance ministry’s statement that India's economic outlook remains bright, underpinned by a stable external sector, positive farm prospects and chances of higher government spending to make up for the shortfall during the general elections but ‘underlying demand conditions bear watching’. It also said India's inflation appears largely under control despite sporadic spikes in prices of certain vegetable. In afternoon session, indices continued to trade lower, as investors were concerned as private report said the Indian economy has entered a phase of 'cyclical growth slowdown' and the Reserve Bank's estimate of 7.2 per cent GDP expansion is 'overly optimistic'. However, in late afternoon session, indices trimmed their losses and turned positive. Traders got relief, as the finance ministry in its September economic review said that favourable agricultural conditions coupled with expectations of a better harvest will likely push rural demand up in the coming months. While the monsoon has disrupted the supply of vegetables, affecting inflation, the ministry noted that a normal monsoon will likely improve prospects of a rabi output. Finally, Nifty and Sensex settled above the psychological 24,450 and 80,300 levels respectively.   

On the global front, European markets were trading higher after a survey showed Germany's consumer confidence is set to recover more strongly in November to hit a more than two-and-a-half-year high. Asian markets ended mostly higher on Tuesday after the unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in September. That was below expectations for 2.5 percent, which would have been unchanged from the August reading. The jobs-to-applicant ratio was 1.24 - beating forecasts for 1.23, which again would have been unchanged from the previous month. Back home, India and Russia are accelerating efforts to establish a rupee-ruble trade mechanism, aiming to reduce reliance on the US dollar amid growing global financial complexities.

The BSE Sensex ended at 80,369.03, up by 363.99 points or 0.45% after trading in a range of 79,421.35 and 80,450.48. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.74%, while Small cap index was up by 0.71%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 2.33%, Bankex up by 2.20%, Realty up by 1.46%, Capital Goods up by 1.28% and Utilities was up by 1.26%, while Auto down by 1.52%, TECK down by 0.81%, Telecom down by 0.74%, IT down by 0.50% and Healthcare was down by 0.47% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 5.13%, ICICI Bank up by 3.13%, NTPC up by 2.11%, Bajaj Finserv up by 2.07% and Adani Ports up by 1.52%. On the flip side, Maruti Suzuki down by 4.11%, Tata Motors down by 4.06%, Sun Pharma down by 2.14%, Bharti Airtel down by 1.61% and Indusind Bank down by 1.53% were the top losers. (Provisional)

Meanwhile, the finance ministry in its September edition of Monthly Economic Review has said that the performance of the Indian economy has been satisfactory during the first half of the ongoing fiscal year but concerns remain with regard to demand conditions going forward. The outlook for the Indian economy is good, underpinned by a stable external sector, positive agricultural outlook, expected improvements in demand supported by the festival season, and the likelihood of an increase in government spending, which will boost investment activity. However, at the margin, demand conditions in the economy bear watching.

Urban demand appears to moderate due to softening consumer sentiments, limited footfall due to above-normal rainfall, and seasonal periods during which people tend to refrain from new purchases. Further, risks to growth arise from escalating geopolitical conflicts, deepening geoeconomic fragmentation and elevated valuations in financial markets in some advanced economies. Their spillover effects on India could cause negative wealth effects, impacting household sentiments and altering spending intentions on durable goods. After two months of low inflation, consumer price inflation rose in September, primarily driven by the effects of erratic monsoon on a few vegetable supplies. Barring a sharp rise in prices of a few vegetables, inflation appears well contained.

In the medium term, it said, favourable factors, such as rejuvenated reservoir levels, healthy Kharif crop sowing brightening the agriculture output prospects, and ample food grain stocks, would help contain price pressures. Sentiment towards India among international direct and portfolio investors is positive, it said, adding that sustaining the growth momentum is essential to turn these positive sentiments into actual direct and portfolio investments in the country. However, foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities. The latest outflow came after a nine-month high investment of Rs 57,724 crore in September.

The report said the external sector continues to perform well, as reflected in rising capital inflows, a stable rupee and comfortable foreign exchange reserves. Forex reserves surpassed the $700 billion mark at the end of September 2024, making India one of the top four countries with more than $700 billion reserves. With regards to the job market, the report said the manufacturing sector continued to show rising employment, as reflected in the Annual Survey of Industries results for 2022-23. Given the overall subdued inflation, barring a few food items, the real price of money may have gone up, it said ‘we maintain that the Indian economy will grow between 6.5 and 7.0 per cent in the current fiscal year’. Risks stem from global factors such as geopolitical conflicts, rising geo-economic fragmentation, uncertainties about the trade policies of major economies and consequent financial market reactions.

The CNX Nifty ended at 24,466.85, up by 127.70 points or 0.52% after trading in a range of 24,140.85 and 24,484.50. There were 31 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were SBI up by 5.13%, Bharat Electronics up by 5.04%, Eicher Motors up by 3.76%, SBI Life up by 3.45% and HDFC Life Insurance up by 3.36%. On the flip side, Tata Motors down by 4.06%, Maruti Suzuki down by 3.81%, Hero MotoCorp down by 2.85%, Dr. Reddy's Lab down by 2.81% and Cipla down by 1.70% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 26.71 points or 0.32% to 8,312.33, France’s CAC rose 50.9 points or 0.67% to 7,607.84 and Germany’s DAX was up by 96.88 points or 0.49% to 19,628.50. 

Asian markets ended mostly higher on Tuesday tracking Wall Street’s gains overnight as investors looked ahead to a slew of US economic data as well as earnings from several of the biggest tech-related companies like Alphabet, Meta, Microsoft, Apple and Amazon due this week for directional cues. Japanese shares gained as the weaker yen boosted exporters, despite the political uncertainty following Sunday’s general election which left the ruling coalition short of a majority. However, Chinese shares declined ahead of a top leadership meeting next week.