Post Session: Quick Review

Thursday turned out to be a disappointing day of trade for Indian equity benchmarks with frontline gauges tumbling below their crucial 59,500 (Sensex) and 17,800 (nifty) levels. Markets made a negative start as traders remained cautious after rating agency Icra said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission. The agency expects the real GDP to expand 6-6.5 per cent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022). Key gauges extended losses after the UN trade body said that Foreign Direct Investment (FDI) flows to India in 2021 were 26 per cent lower, mainly because large M&A deals recorded in 2020 were not repeated. Sentiments also remained dampened with private survey stating that MSMEs have cited challenges related to high costs, exchange-related issues and concerns around frauds while doing business across borders.

Selling was intensified as major indices tested 59,100 (Sensex) and 17,650 (Nifty) levels. Though, markets made some recovery from thereon and ended off intraday lows as traders took some support with the Reserve Bank of India’s (RBI) digital payments index (DPI), which was launched in January 2021 to indicate the extent of digitisation of payments across the country, shows that the index for September 2021 stood at 304.06 against 270.59 in March. This indicates the rapid adoption and deepening of digital payments across the country. Traders took note of report that India will push for a waiver of certain provisions of the global intellectual property rights agreement for Covid-19 medicines and products at a mini ministerial meeting called by the World Trade Organization to firm up its pandemic response.

Global markets too were trading in red with all the major European were in red as the global sovereign-bond selloff paused and investors turned their focus to corporate earnings. Asian markets ended mostly in green as China underscored its diverging monetary and economic picture by cutting benchmark mortgage rates. Back home, textile industry stocks remained in focus as a joint report by global consulting firm Kearney and The Confederation of Indian Industry (CII) said Indian textile exports can hit $65 billion if industry majors take the right steps and there is proper execution of government schemes. Aviation industry’s stocks remained in watch as DGCA data showed that domestic airlines flew 83.8 million passengers in 2021 registering a growth of 33 per cent over the previous year. In 2020 airlines had transported 63 million passengers.

The BSE Sensex ended at 59464.62, down by 634.20 points or 1.06% after trading in a range of 59068.31 and 60045.48. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index slipped 0.07%, while Small cap index was up by 0.05%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.30%, Utilities up by 1.16%, Metal up by 0.41%, Basic Materials up by 0.33% and Realty up by 0.26%, while IT down by 1.69%, TECK down by 1.45%, Energy down by 1.34%, Healthcare down by 1.11% and FMCG down by 1.00% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 4.86%, Bharti Airtel up by 1.60%, Asian Paints up by 0.81%, Maruti Suzuki up by 0.35% and Ultratech Cement up by 0.28%. On the flip side, Bajaj Finserv down by 4.57%, Infosys down by 2.33%, TCS down by 2.25%, Sun Pharma down by 2.20% and Hindustan Unilever down by 2.13% were the top losers. (Provisional)

Meanwhile, Moody's Investors Service in its latest report has said that post-pandemic recovery will sustain growth in insurance premiums, improving profitability amid favourable government reforms in the state-owned insurance sector. It said the Indian insurance industry's growth prospects are favourable, underpinned by an expected 9.3 per cent GDP expansion in fiscal 2021, which ends March 2022, and by strong demand for health insurance in the wake of the pandemic,.

According to the report, total premiums grew 9 per cent in the first nine months of fiscal 2021, slightly ahead of the 8.6 per cent increase in fiscal 2020, with general insurance premiums (including health) up 11 per cent and life new business premiums rising seven per cent. It also said robust premium growth is positive for insurers' profitability, which is currently weak because of persistently low prices and the rising cost of claims.

The report further said the government's plans to recapitalise India's dominant state-owned insurers and list the country's biggest insurer, Life Insurance Corporation of India (LIC), on the stock market will encourage a more disciplined approach to underwriting in the respective general and life insurance sectors. It said this will pave the way for price increases across the market, further supporting insurers' profitability. It added that rising premiums and prices, in turn, will help insurers absorb higher claims. This pushed the average net loss ratio for general insurers to 95 per cent in the first three months of the financial year 2020-21 from 81 per cent in the previous year.

The CNX Nifty ended at 17757.00, down by 181.40 points or 1.01% after trading in a range of 17648.45 and 17943.70. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Power Grid up by 4.89%, Bharti Airtel up by 1.66%, Grasim Industries up by 1.36%, JSW Steel up by 1.16% and Britannia Industries up by 0.83%. On the flip side, Bajaj Finserv down by 4.53%, Bajaj Auto down by 3.73%, Divi's Lab down by 3.39%, Infosys down by 2.32% and TCS down by 2.25% were the top losers. (Provisional)

European markets were trading in red, UK’s FTSE 100 decreased 12.52 points or 0.16% to 7,577.14, France’s CAC declined 43.15 points or 0.60% to 7,129.83 and Germany’s DAX was down by 29.99 points or 0.19% to 15,779.73.

Asian markets settled mostly higher on Thursday, shrugging off drops in Europe and on Wall Street overnight as China underscored its diverging monetary and economic picture by cutting benchmark mortgage rates. Upward pressure on US yields eased as investors took advantage of higher yields resulting from the recent sell-off to buy the debt and as the Treasury saw strong demand for a sale of 20-year bonds. Hong Kong shares ended higher after China's interest rate cut to prop up a slowing economy, with investors pinning hopes on further easing in policies by Beijing. Japanese shares rebounded as bargain-hunting kicked in following selloffs in yesterday's trade. However, concerns over inflation on the back of climbing oil prices along with spreading of Omicron variant kept the market sentiments cautious to some extent.