Benchmarks end higher on Monday

Indian equity benchmarks recovered from opening lows and ended more than half a percent higher on Monday, led by buying in Oil & Gas, Consumer Durables and Power stocks. The benchmarks edged lower in opening deals, as traders got anxious with a private report that the excise duty cuts on diesel and petrol will cost Rs 45,000 crore and lead to a 0.3 percentage point widening in the Centre’s fiscal deficit. Some cautiousness also came with report that even though the retail inflation rate fell to a five-month low of 4.35 per cent in September, there was concern on the part of reputed agencies, from the International Monetary Fund (IMF) to Nomura, and companies over inflationary pressure. The wholesale price inflation (WPI) rate came down in September to the level seen in April, but remained elevated at 10.7 per cent. Adding to the pessimism, another private report stated that rapid strides in digital payments notwithstanding, the Indian economy will likely remain cash-dependent for many years to come, at least that’s what the automated teller machine makers and cash logistics companies are betting on.

However, benchmark indices staged a strong recovery in afternoon trading as traders turned optimistic with industry chamber PHDCCI stating that India's economic recovery gained momentum in recent months on the back of rapid progress in vaccinations, festive season and consequent improvement in consumer and industry sentiments. The PHDCCI Economy GPS Index for October 2021 increased to 131 as compared with 113.1 in the previous month. Some solace also came with State Bank of India (SBI) Chairman Dinesh Kumar Khara’s statement that India is ready to move into the next orbit of growth with the hugely successful implementation of the COVID-19 vaccination program. Additional support also came after Reserve Bank of India (RBI) in its latest report showed that India's forex reserves have increased by $1.919 billion to $642.019 billion for the week ended October 29 on a healthy increase in the currency assets and value of gold. Meanwhile, the Finance Ministry has asked for suggestions on taxation from industries and trade bodies for Budget 2022-23, which is going to set the tone for the growth of India's economy hit by the COVID-19 pandemic.

On the global front, Asian markets ended mostly higher on Monday following the positive cues from Wall Street, as traders react to better than expected employment data from the U.S. and the spike in crude oil prices. The upbeat jobs data added to optimism about the outlook for the economy, despite lingering concerns about supply chain issues and rising inflation. European markets were trading mostly in red even as a survey showed that investor morale in the euro zone rose in November for the first time since July. Back home, on the sectoral front, banking stocks were in focus as RBI data showed that bank credit grew by 6.84 per cent to Rs 110.46 lakh crore and deposits by 9.94 per cent to Rs 157.12 lakh crore in the fortnight ended October 22. Power stocks too were in action as Coal dispatch to the power sector has increased by 27.13 per cent to 59.73 million tonnes (MT) in October, owing to a spurt in power demand amid unprecedented rise in import prices.

Finally, the BSE Sensex rose 477.99 points or 0.80% to 60,545.61and the CNX Nifty was up by 151.75 points or 0.85% to 18,068.55.           

The BSE Sensex touched high and low of 60,609.16 and 59,779.19, respectively and there were 22 stocks advancing against 8 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 1.20%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.29%, Consumer Durables up by 2.25%, Power up by 1.92%, Capital Goods up by 1.51% and Utilities up by 1.46%, while Healthcare down by 0.58% and Bankex down by 0.17% were the few losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 4.54%, Ultratech Cement up by 4.20%, Bajaj Finserv up by 3.98%, Tech Mahindra up by 3.81% and Kotak Mahindra Bank up by 3.36%. On the flip side, Indusind Bank down by 10.45%, Mahindra & Mahindra down by 1.48%, SBI down by 1.31%, Maruti Suzuki down by 0.67% and Asian Paints down by 0.66% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, the PHD Chamber of Commerce and Industry (PHDCCI) has said that the country’s economic recovery gained momentum in recent months on the back of rapid progress in vaccinations, festive season and consequent improvement in consumer and industry sentiments. The PHDCCI Economy GPS Index for October 2021 increased to 131 as compared with 113.1 in the previous month. During the April-October 2021 period, it stood at 114.8 as compared with 78.7 in the previous financial year.

However, its President Pradeep Multani said that at this juncture, there is a need to address the high commodity prices and shortages of raw materials to support the consumption and private investments in the country. Multani said the drivers of household consumption need to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on the expansion of capital investments. The PHD Chamber of Commerce and Industry (PHDCCI) Economy GPS Index is a composite index of three lead economic and business indicators with a base year at 2018-19=100, which measures the broad economic and business activity.

The PHDCCI Economy GPS Index, based on the monthly values of three high-frequency indicators viz., GST collection (Rs crore), passenger vehicle sales (units) and Sensex (daily average), helps to find the direction of the economy. The chamber said GST collections indicate the momentum of business activity, passenger vehicle sales is a broad indicator of demand activity in the economy and the movement of the Sensex indicates the mood of both domestic and foreign investors.

The CNX Nifty traded in a range of 18,087.80 and 17,836.10 and there were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 4.53%, Indian Oil Corporation up by 4.53%, Bajaj Finserv up by 4.18%, Ultratech Cement up by 4.09% and Tech Mahindra up by 3.73%. On the flip side, Indusind Bank down by 10.52%, Divi's Lab down by 5.15%, Mahindra & Mahindra down by 1.37%, SBI down by 1.29% and Hindalco Industries down by 0.71% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 2.10 points or 0.03% to 7,301.86, Germany’s DAX decreased 19.92 points or 0.12% to 16,034.44 and France’s CAC increased 8.97 points or 0.13% to 7,049.76.

Asian markets ended mostly higher on Monday even as investors stayed cautious ahead of inflation data from the United States and China later this week. Chinese shares ended marginally higher after exports data showed exports from China beat forecasts in October to deliver a record trade surplus. China's exports rose 27.1% in dollar terms last month from a year earlier, and exceeded expectations of a 22.8% gain. While, imports increased 20.6%, leaving a trade surplus of $84.54 billion. Though, Japanese shares ended lower despite the new government is considering an economic stimulus package worth more than 30 trillion yen ($265 billion) to revive the economy from the corona-virus pandemic.