Post Session: Quick Review

Indian equity markets continued their bearish trend on Wednesday by ending with cut of over a percent as a rise in October retail inflation reduced expectations of a rate cut by the Reserve Bank of India (RBI) next month. Since morning, markets remained under pressure amid ongoing foreign institutional investors (FIIs) sell-off.  Besides, broader indices -- the BSE Mid cap index and Small cap index witnessed hefty losses during the day.  There were no gaining sectoral indices on the BSE in the day. 

Markets made negative start and extended their losses following the broadly negative cues from Wall Street overnight coupled with weakness in Asian counterparts. Sentiments got hit amid sharp rise in retail inflation. Retail inflation breached the Reserve Bank’s upper tolerance level, soaring to a 14-month high of 6.21 per cent in October mainly on account of rising food prices. Inflation based on the consumer price index (CPI) was 5.49 per cent in September and 4.87 per cent in the year-ago month. Traders overlooked report that India's industrial growth rebounded to 3.1 percent in September after contracting to a 22-month low of 0.1 percent in the previous month, as all three major industries recorded an improvement owing to stocking ahead of the festive season. Market participants also ignored report that India Exim Bank said India’s merchandise exports are likely to grow 1.85% year-on-year to $107.5 billion in the third quarter of FY25 on the back of sustained momentum in economic activity and improving demand prospects in trading partners supported by expected global monetary easing.  In late afternoon session, markets magnified their losses, as traders avoided to take risk. Finally, Nifty and Sensex settled below the psychological 23,600 and 77,700 levels respectively.

On the global front, European markets were trading higher as investors reacted to upbeat earnings news and awaited U.S. consumer price inflation data later in the day for directional cues. Asian markets ended mostly in red as investors fretted about the impact of U.S. President-elect Trump's proposed tariffs on inflation and interest rates. Back home, finance ministry has said that public sector banks (PSBs) have shown robust performance in the first half of the current fiscal year (H1FY25) with a 26 per cent growth in net profit, increase in business and decline in non-performing assets (NPAs).

The BSE Sensex ended at 77,690.95, down by 984.23 points or 1.25% after trading in a range of 77,533.30 and 78,690.02. There were 3 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 2.56%, while Small cap index was down by 3.08%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 3.23%, Industrials down by 2.95%, Capital Goods down by 2.72%, Metal down by 2.54% and Basic Materials was down by 2.45%, while there were no gaining sectoral indices on the BSE.  (Provisional)

The top gainers on the Sensex were NTPC up by 0.21%, Tata Motors up by 0.18% and Infosys up by 0.01%. On the flip side, Mahindra & Mahindra down by 3.23%, Tata Steel down by 3.02%, Adani Ports down by 2.82%, SBI down by 2.18% and JSW Steel down by 2.18% were the top losers. (Provisional)

Meanwhile, breaching the Reserve Bank of India’s (RBI) upper tolerance level, India’s retail inflation based on Consumer Price Index (CPI) rose to a 14-month high of 6.21 percent in October 2024, as food inflation galloped on the back of rising vegetable prices. Inflation was 5.49 per cent in September and 4.87 percent in the year-ago month.

Retail inflation trended below the RBI’s upper tolerance band of 6 percent since September last year. It was at 6.83 percent in August 2023. The RBI, which mainly factors in the CPI while arriving at its bi-monthly monetary policy, has been tasked by the government to ensure retail inflation remains at 4 percent with a margin of 2 percent on either side.

The NSO, Ministry of Statistics and Programme Implementation (MoSPI) in its data has showed that Rural CPI (General) in October 2024 stood at 6.68 percent over 5.87 percent in September 2024. The Urban CPI (General) stood at 5.62 per cent in October as against 5.05 per cent in September. The index value for Rural, Urban and Combined CPI (General) stood at 199.5, 193.7 and 196.8 respectively, in October 2024. The price data are collected from selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of October 2024, NSO collected prices from 100.0 percent villages and 98.5 percent urban markets while the market-wise prices reported therein were 88.3 percent for rural and 92.8 percent for urban.

The Consumer Food Price Index (CFPI) recorded a significant year-on-year (Y-o-Y) inflation rate of 10.87 percent, driven largely by rising prices of vegetables, fruits, oils and fats. In September, food inflation stood at 9.24 percent and 6.61 percent in October 2023. Housing inflation also rose, with October 2024 recording a rate of 2.81 percent, slightly up from September’s 2.72 percent. The housing index is calculated only for urban areas. Electricity costs continued their upward trend, with the electricity index rising to 162.5 and a Y-o-Y inflation rate of 5.45 percent in October, compared to 5.39 percent in September. During the month of October, 2024 significant decline in inflation is observed in Pulses & products, Eggs, Sugar & confectionery and spices subgroup. 

The CNX Nifty ended at 23,559.05, down by 324.40 points or 1.36% after trading in a range of 23,509.60 and 23,873.60. There were 4 stocks advancing against 46 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia up by 0.38%, NTPC up by 0.28%, Tata Motors up by 0.18% and Hindustan Unilever up by 0.14%. On the flip side, Hero MotoCorp down by 4.33%, Hindalco down by 3.84%, Tata Steel down by 3.47%, Mahindra & Mahindra down by 3.44% and Eicher Motors down by 3.16% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 26.14 points or 0.32% to 8,051.91, France’s CAC rose 23.18 points or 0.32% to 7,250.16 and Germany’s DAX was up by 83.62 points or 0.44% to 19,117.26.

Asian markets settled mostly down on Wednesday tracking Wall Streets’ overnight fall on profit booking in anticipation that US President-elect Donald Trump's pledged policies on tariffs will rekindle inflation and keep US interest rates high. Meanwhile, investors were awaiting key US consumer and producer inflation readings this week for hints of a possible Federal Reserve rate cut in December. Trump's choice of China hawks in his Cabinet and China's faltering growth have kept Hong Kong shares subdued. Japanese shares tumbled after data showed Japan's producer price index rose by 3.4% year-on-year in October, beating expectations. But weaker yen increased bets for the Bank of Japan to raise interest rates. However, Chinese shares gained as China began marketing its first US dollar sovereign bonds in three years in Saudi Arabia.