Markets likely to start November month on pessimistic note

Indian markets fell notably on Thursday to extend losses from the previous session as investors awaited U.S. non-farm payrolls figures. Markets remain closed on Friday on account of Diwali. However, a special one-hour Muhurat trading session between 6.00 pm and 7.00 pm was held ended Samvat 2081's first trading session on a positive note. Today, the start of November month is likely to be in red ahead of the US presidential elections on November 5 followed by the US Federal Reserve's monetary policy meeting scheduled for November 7 and 8. Domestically, investors will eye macroeconomic data such as HSBC Manufacturing Purchasing Managers' Index (PMI) Final for October to be out later in the day, and HSBC composite and services PMI Final on November 06. Sustained foreign fund outflows likely to dent sentiments. Foreign investors pulled out a massive Rs 94,000 crore (around $11.2 billion) from the Indian stock market in October, making it the worst-ever month in terms of outflows, triggered by the elevated valuation of domestic equities and attractive valuations of Chinese stocks. Also, the RBI said India's forex reserves dropped by $3.463 billion to $684.805 billion in the week ended October 25. However, some respite may come later in the day as the International Monetary Fund (IMF) in its Regional Economic Outlook for Asia-Pacific said India remains the world’s fastest growing economy with investment and private consumption driving its growth. Some support may come as the government data showed that gross GST collection in October rose 9 per cent to over Rs 1.87 lakh crore, the second-highest ever, on pick-up in domestic sales and improved compliance. The Central GST collection stood at Rs 33,821 crore, State GST at Rs 41,864 crore, Integrated IGST at Rs 99,111 crore and cess at Rs 12,550 crore during the month. There will be some buzz in coal stocks as the Coal Ministry said coal production rose by 7.4 per cent to 84.45 MT in October compared to 78.57 MT in the corresponding month of the previous fiscal. Auto stocks will be in focus after auto sales data released for October. As per a private report, in wholesale terms, the passenger vehicle sector recorded a modest 1.8 per cent increase from the previous year, to a total of 401,447 units. Retail sales posted a 20 per cent rise on the festive push. There will be some reaction in power stocks as India's power consumption rose marginally by about one per cent to 140.47 billion units (BU) in October compared to a year ago, mainly due to heavier base effect. Stocks related to gold will be in focus as the government revised norms related to the permissible amount of wastage with regard to the export of gold, silver and platinum jewellery. Meanwhile, several prominent companies will announce their September quarter earnings, including ABB India, Sun Pharma Advanced Research Company, Procter & Gamble Health, Bata India, Exide Industries, Gland Pharma, KEC International, Indian Railway Catering and Tourism Corporation, Indian Railway Finance Corporation, Amara Raja Energy & Mobility, Raymond, JK Paper, and VST Tillers Tractors. In the primary market, shares of Afcons Infrastructure will be listed on bourses.

The US markets ended higher on Friday rebounding from the previous day's sell-off as Amazon's strong earnings countered a significant drop in U.S. job growth in October. Asian markets are trading mostly in green on Monday as investors geared up for a busy week that includes the U.S. presidential election and Federal Reserve’s monetary policy meeting.

Back home, Indian equity benchmarks ended in negative territory for the second consecutive session on Thursday dragged down by losses in IT, TECK and Consumer Durables stocks. Ongoing foreign fund outflows and lackluster corporate earnings also contributed to a decline in market sentiment. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 4,613.65 crore. After making a cautious start, key gauges slipped into red and traded under pressure throughout the day as traders got anxious with the government data showing that the growth in production of eight key infrastructure sectors slowed down to 2 per cent in September as against 9.5 per cent in the same month last year. However, the output growth is positive against a contraction of 1.6 per cent in August. Key indices extended fall in late afternoon deals, as traders were cautious ahead of HSBC India Manufacturing Purchasing Managers' Index (PMI) data, which is scheduled to be released on November 04.  Besides, in a cautious outlook for the upcoming fiscal year, India Ratings and Research (Ind-Ra) projects a decline in inflation for FY25, yet it emphasizes that immediate rate cuts from the Reserve Bank of India (RBI) are unlikely. Traders took a note of the government data showing that the Centre’s fiscal deficit at the end of the first half of financial year FY25 touched 29.4 per cent of the full-year target. In absolute terms, fiscal deficit - the gap between government’s expenditure and revenue - was at Rs 4,74,520 crore at September-end. Traders overlooked report that India and Saudi Arabia have discussed ways to enhance cooperation in areas of fertilizers, petrochemicals, and mining to boost trade and investments. These sectors were discussed during a meeting between Commerce and Industry Minister Piyush Goyal and Saudi Minister for Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef in Riyadh. The bilateral trade between the two countries stood at $43 billion in 2023-24 as against $53 billion in 2022-23. Meanwhile, Sensex and Nifty ended on a strong note on special Muhurat trading session for Samvat 2081 on November 1. A broad-based buying was seen across all sectors, led by auto pack, reacting to their strong October sales figures. Finally, the BSE Sensex rose 335.06 points or 0.42% to 79,724.12, and the CNX Nifty was up by 99.00 points or 0.41% to 24,304.35.