Post Session: Quick Review

Indian equity benchmarks held the red territory till the end of session with Nifty and Sensex settling below the psychological 24150 and 79,500 levels, respectively amid persistent foreign fund outflows. Besides, traders avoided to take risk ahead of key macroeconomic i.e. Index of Industrial Production (IIP) and Consumer price index (CPI), which going to be out on November 12. However, indices traded with limited losses during the day amid US Fed delivered the widely expected decision to lower interest rates by a quarter point and signaled no intention to skip cutting rates. The Bank of England also cut interest rates. As for broader indices, the BSE Mid cap index and Small cap index ended with heavy losses.

Markets made slightly positive start and soon turned volatile amid persistent foreign fund outflows. The foreign institutional investors (FIIs) sold equities worth Rs 4,888 crore on November 7. Traders were cautious as S&P Global’s report stated that fight for deposits in an eventually declining rate cycle in India will add pressures on the net interest margins (NIM) for banks by 20 basis points. It said banks may see a further margin squeeze if credit and deposit growth remain steady. Investors overlooked Piyush Goyal, Union Minister of Commerce and Industry, commended EEPC India’s target to reach $300 billion in engineering exports by 2030, calling it a bold testament to the courage and conviction of new India. Goyal highlighted the crucial role of the engineering sector in realizing India’s vision of Viksit Bharat and emphasized the government’s ongoing efforts to streamline regulations, promote ease of doing business, and support sustainable, high-quality manufacturing. In afternoon session, markets continued to trade in red as sentiments got hit after report stated that a 21% increase in onion prices in just four days to a five-year high of more than Rs 60 per kg in several markets is likely to weigh on inflation data for November. Potato and cooking oil prices are also expected to stay higher this month. Indices remained lower till the end as traders sold their riskier stocks. 

On the global front, European markets were trading lower on the back of mixed earnings results, while heavyweight luxury firms fell after Richemont's results failed to impress. Asian markets ended mixed after the Bank of England and the U.S. Federal Reserve cut interest rates by a quarter point. Trader’s focus shifted to stimulus announcements from China later in the day as the meeting in the Standing Committee of the National People's Congress ends. Back home, airline sector remained in focus as credit rating agency ICRA in its latest report has said that domestic air passenger traffic in India reached 138.5 lakh in October, marking a 6.3% rise compared to 130.3 lakh in the previous month.

The BSE Sensex ended at 79,486.32, down by 55.47 points or 0.07% after trading in a range of 79,117.37 and 79,807.26. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.18%, while Small cap index was down by 1.52%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.70%, IT up by 0.54%, TECK up by 0.39%, Auto up by 0.14% and FMCG was up by 0.08%, while Realty down by 2.98%, Energy down by 2.10%, Oil & Gas down by 2.08%, PSU down by 1.84% and Utilities was down by 1.59% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 2.69%, Titan Company up by 2.13%, Tech Mahindra up by 1.59%, Infosys up by 1.31% and Nestle up by 1.30%. On the flip side, Asian Paints down by 2.62%, Tata Steel down by 2.35%, SBI down by 2.11%, Reliance Industries down by 2.01% and NTPC down by 1.98% were the top losers. (Provisional)

Meanwhile, Niti Aayog CEO BVR Subrahmanyam has said that India should be a part of the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). India pulled out of the RCEP in 2019 after entering negotiations in 2013. The RCEP bloc comprises 10 ASEAN group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners - China, Japan, South Korea, Australia and New Zealand.

Subrahmanyam said ‘India is one of few countries which are not a part of large trade agreements. India should be a part of RCEP (Regional Comprehensive Economic Partnership) and CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and become a member’. He added ‘...that will be best for India's Micro, Small & Medium Enterprises (MSME) sector. The 40 per cent of India's exports are from MSME. Big corporates are not great exporters’.

CPTPP is a free trade bloc spanning five continents, made up of Pacific rim countries of Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam and Japan. He also said ‘I don't think we have captured the 'China plus one' opportunity as much as we could have’, and added that countries like Vietnam, Indonesia, Malaysia, Turkey, and Mexico have probably benefited more from 'China plus one' than India.

He emphasised that India will have to get into the global value supply chain as 70 per cent of the world's trade happens through the global supply chain. Pointing out that India's tariffs are higher compared to other countries, he said ‘We have 2-3 major bottlenecks, we have tariffs, which are higher. I think if we don't cut tariffs, then we are not going to be benefited because that is the pain point’. He admitted that investment by the private sector is not happening at the pace 'we would like to'.

He further said ‘The private sector is here to make profit.. capacity utilisation (in the private sector) is still running around 70 per cent’. India is one of the shining stars on the global horizon, policy consistency and reforms that have led to a spectacular growth path. He said ‘We ended last fiscal year at about 8.2 per cent growth rate and are poised to be the third largest economy by 2027. Today, our contribution to incremental global growth is about 20 per cent, which will only increase’.

The CNX Nifty ended at 24,148.20, down by 51.15 points or 0.21% after trading in a range of 24,066.65 and 24,276.15. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Mahindra & Mahindra up by 2.89%, Titan Company up by 2.10%, Tech Mahindra up by 1.84%, Infosys up by 1.49% and Nestle up by 1.45%. On the flip side, Trent down by 3.18%, Coal India down by 2.60%, Asian Paints down by 2.58%, Tata Steel down by 2.24% and Shriram Finance down by 2.03% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 53.5 points or 0.66% to 8,087.24, France’s CAC fell 59.11 points or 0.8% to 7,366.49 and Germany’s DAX was down by 127.92 points or 0.67% to 19,234.60.

Asian markets ended mixed on Friday after the Bank of England and the US Federal Reserve cut interest rates by a quarter point, while US Fed Chair Jerome Powell said the central bank will evaluate data to adjust the pace and destination of interest rates as inflation nears the 2% target. Meanwhile, lingering concerns on a second presidential term for Donald Trump also kept sentiments mixed. Japanese shares gained as technology shares followed their US peers higher overnight, despite weak household spending data and stronger yen. On a monthly basis, Japan’s household spending decreased 1.3%, after a strong 2% gain in August and beats market estimate of 0.7%. Chinese and Hong Kong shares declined as investors’ focus shifted to stimulus announcements from China later in the day as the meeting in the Standing Committee of the National People's Congress ends.