Key gauges end Monday's trading session in negative territory

Indian equity benchmarks ended Monday's trading session in negative territory, weighed down by weak global cues. Markets made a slightly positive start but soon slipped into red terrain as traders turned cautious with Reserve Bank Governor Shaktikanta Das’ statement that the central bank has ensured a soft landing after having faced with various headwinds, but risks of inflation coming back and growth slowing down do remain. Some concern also came as India’s foreign exchange reserves declined for the sixth straight week, mainly due to the Reserve Bank of India’s intervention in the foreign exchange market as the rupee came under pressure from sustained foreign investment outflows. However, markets managed to erase most of their losses in early afternoon deals, taking support from Central Board of Direct Taxes (CBDT) chairman Ravi Agarwal’s statement that the government will exceed the Rs 22.07 lakh crore direct tax collection target set for the current fiscal. Some support also came amid a private report stating that India has emerged as the third most-improving geography in terms of business environment.  

But, markets failed to hold recovery and added more losses in late afternoon session owing to relentless foreign fund outflows. According to exchange data, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,849.87 crore on Thursday. Foreign investors have pulled out Rs 22,420 crore from the Indian equity market so far this month, owing to high domestic stock valuations, increasing allocations to China, and the rising US dollar as well as Treasury yields. Some anxiety also came amid reports that overseas investors are cutting their holdings of Indian bonds at the fastest pace since at least June, as rising US yields damp the appeal of the Asian nation’s fixed-income securities. 

On the global front, European markets were trading mostly in red as investors awaited speeches from ECB policymakers including chief Christine Lagarde later in the day for interest rate guidance. Lingering concerns over potential impacts from U.S. President-elect Donald Trump's global economic policies also served to keep underlying sentiment cautious. Asian markets settled mostly down on Monday due to renewed concerns over Trump's potential tariffs and uncertainty over Fed's policy.

Back home, on the sectoral front, stocks related to textiles sector were in focus as Confederation of Indian Textile Industry (CITI) in its report, citing government data, has said that textiles exports from India during October were about 11.56 per cent higher at $1,833.95 million, compared to the same month last year. At the same time, apparel exports registered a significant growth of 35.06 per cent during the same period October at $1,227.44 million. Auto stocks were in watch as the Federation of Automobile Dealers Associations (FADA) stated that the automobile retail demand during this year’s festive season witnessed a surge with sales growing at the rate of 11.76 per cent over last year’s 38.37 lakh units. 

Finally, the BSE Sensex fell 241.30 points or 0.31% to 77,339.01, and the CNX Nifty was down by 78.90 points or 0.34% to 23,453.80.  

The BSE Sensex touched high and low of 77,886.97 and 76,965.06 respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.17%, while Small cap index was down by 0.69%.

The top gaining sectoral indices on the BSE were Metal up by 2.14%, FMCG up by 0.66%, Realty up by 0.62%, Auto up by 0.58% and Consumer Durables up by 0.29%, while IT down by 2.34%, TECK down by 1.99%, Oil & Gas down by 1.64%, Energy down by 1.21% and Utilities down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.39%, Hindustan Unilever up by 1.44%, Mahindra & Mahindra up by 1.37%, Nestle up by 1.35% and SBI up by 1.20%. On the flip side, TCS down by 3.05%, Infosys down by 2.82%, NTPC down by 1.56%, Tech Mahindra down by 1.50% and HCL Technologies down by 1.41% were the top losers.

Meanwhile, Former Reserve Bank of India (RBI) governor C Rangarajan has said that India's healthcare expenditure is currently less than 2 per cent of its Gross Domestic Product (GDP) and the governments must urgently increase it. He stressed on the importance of ensuring efficient fund utilisation before increasing healthcare spending.

Rangarajan said ‘in India, there is a consistent discussion on raising healthcare expenditure to at least 2.8 per cent of the GDP. However, current data indicates that we are spending only about 1.8 or 1.9 per cent of the GDP’. He said the governments should increase healthcare spending, focus on establishing hospitals that offer free services, and ensure these funds are utilised efficiently. He also stated that education and health are crucial for accelerating the country's progress. However, in India's social expenditure system, more resources are allocated to education than to health, which may not be the ideal approach.

Talking on international practices, he noted that insurance-linked medical services, common in developed nations, have limited relevance in India. Instead, he advocated for cross-subsidisation principles to establish more institutions that can serve both the poor and the affluent. He added that medical services in many Indian hospitals are comparable to those in developed countries.

The CNX Nifty traded in a range of 23,606.80 and 23,350.40. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.79%, Hero MotoCorp up by 2.69%, Tata Steel up by 2.33%, Nestle up by 1.47% and Hindustan Unilever up by 1.46%. On the flip side, TCS down by 3.11%, Dr. Reddy's Lab down by 2.75%, Infosys down by 2.65%, BPCL down by 2.62% and Cipla down by 2.38% were the top losers.

European markets were trading mostly in red; France’s CAC fell 0.5 points or 0.01% to 7,269.13 and Germany’s DAX lost 7.13 points or 0.04% to 19,203.68, while UK’s FTSE 100 increased 19.78 points or 0.25% to 8,083.39. 

Asian markets settled mostly down on Monday tracking Wall Street’s fall last Friday as recent economic data on inflation and retail sales coupled with comments from Fed officials including Chair Jerome Powell weakened the case for a December interest rate cut by the Federal Reserve. Moreover, renewed concerns over Donald Trump's potential tariffs and escalating tensions between Russia and Ukraine have also pressurized market sentiments. Japanese shares dropped as the Japanese yen initially regained some strength and after Bank of Japan chief Kazuo Ueda failed to offer strong hints on the timing of additional interest rate hikes. However, Hong Kong shares gained after Chinese securities regulator said it will expand the scope of stock eligible to trade via Stock Connect.