Post Session: Quick Review

Indian equity benchmarks extended losing streak for fourth straight session with frontline gauges ending with a cut of over one and a half percent amid weak global cues coupled with depreciating rupee. Markets made a gap down opening as traders remain worried over falling rupee. Indian rupee touched a fresh record low against US dollar tracking losses in domestic as well as global equities markets. The home currency opened at 81.55 and touched an all time low of 81.55 a dollar. Sentiments also remain dampened on report that the Reserve Bank of India is set to raise interest rates again this week on September 30 with a slim majority expecting a half-point hike and some others expecting a smaller 35 basis point rise. The RBI has lagged many of its global peers, despite inflation sticking above the top end of its target range of 2-6 percent all year.

However, buying near intraday lows provided some recovery for markets as traders went for bargain hunting taking some support with Finance Minister Nirmala Sitharaman’s statement that the rupee has held back very well when compared to other currencies against the US Dollar. She added that the Reserve Bank and the Finance Ministry are keeping a very close watch over the developments. Recovery proved short-lived and markets witnessed brutal selloff once again in fag end of the trade to end near intraday lows as traders took a note of the Asian Development Bank’s (ADB) report stating that with economic activity still to reach pre-pandemic levels, the RBI may slow down the pace of rate hikes until next year to quell soaring inflation while supporting growth. Traders also remain concerned with S&P Global Ratings’ projection that India's economic growth at 7.3 percent in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022.

On the global front, European markets were trading lower as concern for the global growth outlook has been increasing as inflation remains high and central banks resort to aggressive interest rate hikes to try to tame rising prices. Asian markets ended lower on concerns that high inflation and aggressive policy tightening could trigger a global economic recession. Back home, foreign investors have slowed down the pace of equity buying in India in September so far, as they invested a little over Rs 8,600 crore, on sharp depreciation in rupee. Meanwhile, stocks related to insurance industry were trading lower despite data from insurance sector regulator Irdai showing that non-life insurers registered a 12 per cent yearly growth in their gross direct premium income during August this fiscal at Rs 24,471.95 crore.

The BSE Sensex ended at 57,145.22, down by 953.70 points or 1.64% after trading in a range of 57,038.24 and 57,708.38. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 2.84%, while Small cap index was down by 3.33%. (Provisional)

The lone gaining sectoral indices on the BSE was IT up by 0.14%, while Metal down by 4.50%, Realty down by 4.29%, Auto down by 3.86%, Utilities down by 3.72%, Power down by 3.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HCL Tech up by 1.46%, Asian Paints up by 1.14%, Infosys up by 1.06%, Ultratech Cement up by 0.44% and TCS up by 0.40%. On the flip side, Maruti Suzuki down by 5.49%, Tata Steel down by 4.22%, ITC down by 3.96%, Bajaj Finance down by 3.27% and Axis Bank down by 3.20% were the top losers. (Provisional)

Meanwhile, S&P Global Ratings has projected India's Gross domestic product (GDP) growth at 7.3 percent in the current fiscal (FY23) with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022. In its Economic Outlook for the Asia Pacific, it said India's growth next year will get support from domestic demand recovery after the coronavirus pandemic.

On inflation, S&P Global Ratings pegged the average rate in the current fiscal at 6.8 percent and projected it to fall to 5 percent in the next fiscal beginning April 2023. India's headline Consumer Price Inflation (CPI) is likely to remain outside the Reserve Bank of India's (RBI) upper tolerance limit of 6 percent until the end of 2022. That's amid substantial weather-induced wheat and rice price increases as well as sticky core inflation. And food inflation may rise again.

It further said retail or consumer price inflation has remained above RBI's upper tolerance threshold of 6 percent for the eighth month in a row and was at 7 percent in August. Wholesale price inflation remained in double digits for the 17th straight month and was at 12.41 percent in August. According to S&P Global Ratings, elevated core inflation would drive up policy rates further in India, and projected policy interest rates to be 5.90 percent by the end of this fiscal. 

The CNX Nifty is currently trading at 17,016.30, down by 311.05 points or 1.80% after trading in a range of 16,978.30 and 17,196.40. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 1.26%, HCL Tech up by 1.21%, Infosys up by 1.08%, Divi's Lab up by 0.75% and Ultratech Cement up by 0.61%. On the flip side, Tata Motors down by 6.05%, Hindalco down by 5.79%, Adani Ports down by 5.52%, Maruti Suzuki down by 5.44% and Eicher Motors down by 4.69% were the top losers. (Provisional)

European markets were trading lower, France’s CAC declined 30.24 points or 0.52% to 5,753.17, Germany’s DAX shed 58.28 points or 0.47% to 12,225.91 and UK’s FTSE 100 decreased 62.47 points or 0.89% to 6,956.13.

Asian markets settled down on Monday, tracking weakness in Wall Street last Friday as recession fears continue to grow following concerns over aggressive monetary policy tightening by the US Federal Reserve. Japanese shares declined as a measure of Japan's factory activity hit a 20-month low in September. Japanese authorities’ currency intervention also added more pressure on market sentiments. Chinese shares dropped ahead of factory activity data due later in the week. Meanwhile, the Reserve Bank of India’s monetary policy committee is scheduled to meet later this week.