Post Session: Quick Review

Indian equity markets fell sharply on Thursday after previous sessions’ rally. Investors awaited the US Federal Reserve interest rate decision. Foreign fund outflows also dented sentiment. Throughout the day, markets traded under selling pressure amid weakness in IT and Metal sector’s stocks. Investors preferred to sell their riskier stocks. The broader indices, the BSE Mid cap index and Small cap index also ended in red. There were no gaining sectoral indices on the BSE.

After making slightly positive start, soon markets slipped into red and extended their losses amid foreign fund outflows. As per NSE data, Foreign Institutional Investors (FII) were net sellers of Indian equities worth Rs 4,445.59 crore on November 06. Some cautiousness came in as a SBI report said it sees Q2 real GDP growth slowing down further to 6.5 per cent in the September quarter of this fiscal year. Amid concerns over the country's economic growth rate and if it is slowing down, it expects FY25 growth to come closer to 7 per cent. Sentiments remained down-beat as RBI Governor Shaktikanta Das stated that capital expenditure spending of the centre and states are picking up but high subsidy outgo is a concern. He said subsidy outgo was very high and government expenditure in the first quarter is pulling down the GDP numbers. In afternoon session, indices continued their weak trade. Traders took note of report that Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the incoming data on economic growth is ‘mixed’, but the positive factors outweigh the negative ones. He stressed that the underlying economic activity by and large remains strong. He said it can be noted that many analysts have been voicing concerns about growth, especially after official data showed growth slowing to a 15-quarter low of 6.7 per cent in the first quarter of FY25. In last leg of trade, markets remained lower, as traders avoided to take risk amid weekly F&O expiry. 

On the global front, European markets were trading higher boosted by banks and resources shares, with the focus on policy decisions from the Federal Reserve and other major central banks, including the Bank of England (BoE), later in the day. Asian markets ended mostly in green as focus shifted to interest-rate decisions from the Bank of England and the Federal Reserve due later in the day. Back home, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri has said that India's petrochemical sector is on track to touch $300 billion next year, with the potential to reach upwards of $1 trillion in 2040.

The BSE Sensex ended at 79,541.79, down by 836.34 points or 1.04% after trading in a range of 79,419.34 and 80,563.42. There were 2 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.67%, while Small cap index was down by 0.44%. (Provisional)

The top losing sectoral indices on the BSE were Metal down by 2.54%, Utilities down by 1.82%, Basic Materials down by 1.65%, Realty down by 1.45% and Power was down by 1.42%, while there were no gaining sectoral indices on the BSE. (Provisional)

The only gainers on the Sensex were SBI up by 0.53% and TCS up by 0.26%. On the flip side, Tata Motors down by 2.36%, Tech Mahindra down by 2.21%, Ultratech Cement down by 2.01%, JSW Steel down by 1.99% and Sun Pharma down by 1.96% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has clarified that changing the monetary policy stance to ‘neutral’ does not mean a rate cut in the central bank’s next policy announcement. He said ‘It should not be assumed that we have done this, so therefore the next step is a rate cut. A change in stance doesn’t mean that the next step is a rate cut, in the very next meeting. It’s not so’. The RBI has not changed interest rates for nearly two years but has adopted a neutral stance in its policy statement in October. This has sparked speculation of a likely rate cut in the next policy. hinting at significant upside risks to inflation expectations, he said the next course of action has to be taken very carefully. According to the RBI, significant risks include continuing geopolitical conflicts, geo-economic fragmentation, climate and weather-related risks, and commodity prices going up. He had said in his monetary policy statement last month that September and October inflation prints were expected to be higher. September retail inflation came at 5.5 per cent.

He asserted that ‘I reiterate it again today, October inflation, CPI numbers are again going to be very high, perhaps higher than the September number. So, therefore, we had warned it in my monetary policy statement’. The RBI monetary policy committee’s shift to ‘neutral’ indicates that it is open to adjusting interest rates based on economic conditions. Before that, the stance had been ‘withdrawal of accommodation’, meaning a more restrictive monetary policy stance where the central bank aims to reduce the money supply in the economy to contain inflation.

The CNX Nifty ended at 24,199.35, down by 284.70 points or 1.16% after trading in a range of 24,179.05 and 24,503.35. There were 5 stocks advancing against 45 stocks declining on the index. (Provisional)

The top gainers on Nifty were Apollo Hospital up by 6.55%, SBI up by 0.56%, HDFC Life Insurance up by 0.42%, TCS up by 0.27% and Larsen & Toubro up by 0.03%. On the flip side, Hindalco down by 8.49%, Trent down by 6.47%, Shriram Finance down by 3.66%, Grasim Industries down by 3.15% and Tech Mahindra down by 2.51% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 2.88 points or 0.04% to 8,169.56, France’s CAC rose 39.54 points or 0.54% to 7,409.15 and Germany’s DAX was up by 225.96 points or 1.19% to 19,265.27.

Asian markets settled mostly higher on Thursday tracking Wall Street gains overnight after Donald Trump was elected as US president for the second time, while investors’ focus shifted to interest-rate decisions from the Bank of England and the Federal Reserve due later in the day. Chinese and Hong Kong shares rallied amidst robust Chinese exports data and hopes for more fiscal stimulus measures outweighed concerns over trade frictions posed by a second Donald Trump presidency. Although, Japanese shares declined as investors locked profits following the sharp gains in the last session.