Indian markets hit with sharp fall on Monday

Indian equity benchmarks hit with a sharp fall on Monday’s trading session as investors exercised caution ahead of the US presidential election and awaited upcoming economic decisions from global central banks. After a cautious start, markets remained under selling pressure for the whole day, as sustained foreign fund outflows dented 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. Besides, the RBI said India's forex reserves dropped by $3.463 billion to $684.805 billion in the week ended October 25. 

Losses got intensified during the middle of the session, amid a private report stating that India’s economic growth likely moderated in July-September, primarily due to a slowdown in consumption and investment amid heavy monsoon rains in several parts of the country. Towards end of the session, indices staged minor recovery, as some relief came after India's manufacturing sector regained growth momentum in the month of October, fuelled by faster increases in total new orders and international sales. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) surged to 57.5 in October as against 56.5 in September, indicating a substantial and accelerated improvement in operating conditions. 

On the global front, European markets were trading higher, after Spain's factory sector expanded at the fastest pace in over two-an-a-half years in October, driven by significant growth in output and new orders amid an improvement in market demand. The results of the latest purchasing managers' survey by S&P Global showed that the HCOB Spain manufacturing purchasing managers' index rose to 54.5 from 53.0 in September. Asian markets ended mostly higher on Monday, after China's manufacturing activity returned to growth in October as companies ramped up production and purchasing to meet higher demand amid improving confidence. The survey results from S&P Global showed that the Caixin manufacturing Purchasing Managers' Index rose to 50.3 in October from 49.3 in September. A reading above the neutral mark of 50.0 indicates expansion.

Back home, auto stocks remained 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. Besides, stocks related to the power industry were in focus, as India's power consumption rose marginally by about one per cent to 140.47 billion units (BU) in October 2024 as compared to a year ago, mainly due to heavier base effect. In the year-ago period, the power consumption grew by over 22 per cent to 139.44 BU from 113.94 BU in October 2022. 

Finally, the BSE Sensex fell 941.88 points or 1.18% to 78,782.24, and the CNX Nifty was down by 309.00 points or 1.27% to 23,995.35. 

The BSE Sensex touched high and low of 79,713.14 and 78,232.60 respectively. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index declined by 1.31%, while Small cap index was down by 1.65%.

The top losing sectoral indices on the BSE were Realty down by 3.00%, Oil & Gas down by 2.54%, Energy down by 2.51%, Utilities down by 2.22% and Telecom down by 2.11%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.00%, Tech Mahindra up by 1.94%, SBI up by 1.07%, HCL Tech up by 0.29% and Infosys up by 0.19%. On the flip side, Adani Ports & SEZ down by 3.23%, Reliance Industries down by 2.77%, Sun Pharma down by 2.68%, NTPC down by 2.59% and Bajaj Finserv down by 2.44% were the top losers.

Meanwhile, Union Defence Minister Rajnath Singh has exuded confidence that the country will export more than Rs 50,000 crore defence items by 2029-30, adding that the government is committed to collaborate with the academia for self-reliance in defence production.

Singh said government’s efforts of achieve self-reliance are yielding desired results as the defence exports, which were around just Rs 600 crore ten years ago, crossed a record number of Rs 21,000 crore in FY 2023-24. Highlighting the increasing role of technology in the defence ecosystem across the globe amidst ongoing conflicts, he that the use of drones, laser warfare, cyber warfare, precision guided missiles and hypersonic missiles has transformed warfare into a technology-oriented operation. 

Further, he stated ‘The biggest hurdle in achieving ‘Aatmanirbharta’ in defence is that we are compelled to import some high-end technologies necessary for our items. There is a need to focus on defence application of modern cutting-edge technologies in view of the changing nature of warfare.’

The CNX Nifty traded in a range of 23,816.15 and 24,316.75. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.35%, Tech Mahindra up by 2.17%, Cipla up by 1.61%, SBI up by 1.05% and Dr. Reddy's Lab up by 0.69%. On the flip side, Hero MotoCorp down by 4.27%, Grasim Industries down by 4.01%, Bajaj Auto down by 3.55%, Adani Ports & SEZ down by 3.24% and BPCL down by 3.05% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 55.01 points or 0.67% to 8,232.16, France’s CAC rose 24.75 points or 0.33% to 7,433.86 and Germany’s DAX gained 15.94 points or 0.08% to 19,270.91. 

Asian markets ended mostly higher on Monday tracking a positive lead from Wall Street in spite of the uncertainty caused by the US presidential election outcome and the US Federal Reserve's monetary policy announcement later in the week. Chinese and Hong Kong shares were gained ahead to a meeting of China's National People's Congress, that is expected to unveil a new fiscal stimulus measures to stabilize the Chinese economy through local government debt swaps and injections of capital into banks. South Korean shares rose after the country's opposition Democratic Party leader agreed to support the government's move to scrap a planned tax on financial investments. Meanwhile, Japanese market shut for Culture Day holiday.