Post Session: Quick Review

Indian equity benchmarks ended near their intraday high points on Tuesday’s trading session. Markets made a negative start of the day as ICRA Ratings’ report stated that total infrastructure credit by banks and NBFC-Infrastructure Finance Companies (NBFC-IFCs) remained sluggish in the first quarter of the current fiscal (Q1FY22) due to the disruptions caused by the second wave of the COVID-19 pandemic. In the first half of the trading session, key indices remained volatile, as traders remained cautious, after a gauge of India’s services sector eased but remained in the expansion zone. The India Services Business Activity Index, compiled by IHS Markit, stood at 55.2 in September compared with 56.7 in August. A reading above 50 indicates expansion in business activity.

However, in the second half of the trading session, markets gained momentum to end higher, taking support with Economic Affairs Secretary Ajay Seth’s statement that India is on the path of economic recovery supported by various government reforms in the last seven years under Prime Minister Narendra Modi's leadership. Notwithstanding the COVID-19 pandemic, he said, the government continued with the reform process and many strategic reforms were announced even during pandemic. Some support also came after the government extended the Credit Guarantee Scheme for Subordinate Debt (CGSSD) for stressed MSMEs till March 31, 2022. The scheme was approved by the government on June 1, 2020. It was launched on June 24 the same year to provide credit facility through lending institutions to the promoters of stressed MSMEs.

On the global front, European markets were trading higher, as surging bank stocks and a positive earnings update from German chipmaker Infineon calmed nerves following a tech-fuelled selloff on Wall Street. Asian markets ended mostly lower on Tuesday, after overall consumer prices in the Tokyo region of Japan were up 0.3 percent on year in September. The Ministry of Internal Affairs and Communications said that was in line with expectations following the 0.4 percent contraction in August. Core CPI, which excludes volatile food prices, was up 0.1 percent on year - shy of expectations for an increase of 0.2 percent following the flat reading in the previous month.

The BSE Sensex ended at 59744.88, up by 445.56 points or 0.75% after trading in a range of 59127.04 and 59778.87. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.33%, while Small cap index up by 0.54%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.23%, Energy up by 2.52%, Telecom up by 2.28%, Power up by 1.86% and PSU up by 1.46%, while Realty down by 1.63%, Healthcare down by 0.37%, Metal down by 0.15% and FMCG down by 0.02% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 4.96%, Bharti Airtel up by 2.63%, Reliance Industries up by 2.08%, HCL Tech. up by 2.06% and Titan Co up by 2.04%. On the flip side, Sun Pharma down by 1.33%, Power Grid down by 0.91%, ITC down by 0.76%, Ultratech Cement down by 0.73% and Tata Steel down by 0.58% were the top losers. (Provisional)

Meanwhile, India’s service sector growth eased but remained in the expansion zone in the month of September, as the loosening of COVID-19 restrictions supported an improvement in market conditions and overall demand. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index stood at 55.2 in September from 56.7 in August. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- stood at 55.3 in September, from 55.4 in August.

Buoyed by signs of improvements in underlying demand, Indian service providers took on additional staff during September. The increase in employment ended a nine-month sequence of job shedding, but was marginal overall as some panellists indicated having sufficient workforces to deal with their workloads. The report further said that travel restrictions continued to weigh on international demand for Indian services. New export business contracted for the nineteenth month in a row, and at a sharp rate that was the quickest since May.

On the price front, there was another increase in firms' expenses, but the rate of inflation subsided. Selling prices rose again, albeit only marginally. Amid reports of higher fuel, material, retail and transportation prices, average cost burdens faced by Indian service providers rose further during September.

The CNX Nifty ended at 17822.30, up by 131.05 points or 0.74% after trading in a range of 17640.90 and 17833.45. There were 30 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 10.87%, Indusind Bank up by 4.36%, Coal India up by 4.21%, Indian Oil Corp. up by 2.89% and Bharti Airtel up by 2.62%. On the flip side, Cipla down by 2.40%, Hindalco down by 2.06%, Shree Cement down by 1.79%, Tata Consumer Products down by 1.58% and Sun Pharma down by 1.38% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 41.08 points or 0.59% to 7,052.09, France’s CAC increased 32.23 points or 0.5% to 6,509.89 and Germany’s DAX was up by 33.33 points or 0.22% to 15,069.88.

Asian markets ended mostly lower on Tuesday, tracking weakness in Wall Street overnight. Market sentiments weakened further amid mounting concerns about the developer’s financial health after Chinese property developer Fantasia Holdings failed to repay a maturing bond, adding to the risks stemming from China Evergrande Group’s debt crisis. Meanwhile, Chinese markets will remain shut until Friday for the Golden Week holidays. Growing anxiety within the Biden administration about the debt ceiling tussle in the United States and rising Treasury yields also weighed on markets. Japanese shares declined to one-month lows as surging oil prices stoked further worries about inflation and monetary tightening globally, while new Japanese Prime Minister Fumio Kishida's proposal to raise tax on capital gains also dampened sentiment.