Post Session: Quick Review

Indian equity benchmarks ended Thursday’s session in negative territory after a day's breather ahead of a key US inflation reading. Key indices made negative start as traders were cautious after India's retail inflation spiked to 7.41% in September, mainly due to costlier food items. For the ninth month in a row, retail inflation has remained above the Reserve Bank of India's tolerance level of 6%. Domestic sentiments also got hit after India's industrial growth, as per the Index of Industrial Production (IIP), slid to an 18-month low of -0.8% in August from 2.2% in July. Markets added more losses in afternoon session, as sentiment weakened after rating agency Crisil's research wing in its latest report stated that India Inc is likely to report a three per cent year-on-year fall in profits for the July-September period (Q2FY23). This fall in profitability will be the fourth straight quarter of the decline in profits for the listed companies. Profitability is seen declining 300 basis points (bps) due to elevated commodity prices.

Traders took note of Global rating agency S&P said India is facing a “mixture of factors that may shake its sovereign credit metrics”. Nevertheless, it conceded that strong economic growth and external balance sheet are expected to offset risks inherent in the growing external headwinds. But if the economy witnesses a prolonged downturn in real and nominal GDP growth, “material downward pressure on the sovereign ratings could emerge, especially if large government deficits are left unchecked. However, in late afternoon session, losses got restricted, as traders took some support after Finance Minister Nirmala Sitharaman said her Budget for the next financial year will be ‘very carefully structured’ to help the economy sustain growth momentum and rein in prices. She identified high energy prices among the biggest problems facing the Indian economy in the near future. But, markets failed to erase all loses and closed the session with cut of over half a percent. Sentiments remained down-beat with SBI Research in its latest 'Ecowrap' report said that the unseasonal rains in different parts of India, particularly in cereal-producing states, could have a 'significantly large impact' on cereal and vegetable prices.

On the global front, European markets were trading higher despite turbulent U.K. bond market and news of more Russian missile strikes on Ukrainian towns. All Asian markets ended lower following the broadly negative cues from global markets overnight, as traders were cautious as they reacted to the US Fed's minutes from its latest monetary policy meeting and await the data on U.S. consumer price inflation later in the day. Back home, as per exchange data, foreign institutional investors (FIIs) remained net sellers in the Indian capital market on Wednesday as they sold shares worth Rs 542.36 crore. Sector wise, agriculture sector remained in limelight, as Union Minister for Agriculture and Farmers Welfare, Narendra Singh Tomar has said that the Agriculture sector is the backbone of the country and the country’s rural economy and agriculture have such strength that the country can easily overcome even the adverse situations, noting that the Indian Agriculture sector has shown this during the Covid pandemic.

The BSE Sensex ended at 57,235.33, down by 390.58 points or 0.68% after trading in a range of 57,055.75 and 57,568.14. There were 8 stocks advancing against 21 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.73%, while Small cap index was down by 0.45%. (Provisional)

The only gaining sectoral indices on the BSE were Healthcare up by 0.17% and Metal was up by 0.13%, while Capital Goods down by 1.22%, Bankex down by 1.21%, Realty down by 1.08%, PSU down by 1.03% and Industrials was down by 0.98% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HCL Tech up by 3.29%, Sun Pharma up by 1.30%, Dr. Reddy's Lab up by 0.60%, Reliance Industries up by 0.29% and Ultratech Cement up by 0.08%. On the flip side, Wipro down by 6.81%, SBI down by 2.14%, Larsen & Toubro down by 1.76%, ICICI Bank down by 1.61% and Asian Paints down by 1.16% were the top losers. (Provisional)

Meanwhile, the PHD Chamber of Commerce and Industry (PHDCCI) has said going by the current trend, it is expecting the Indian economy to grow at 6-7 per cent during current fiscal year (FY23). Chamber's new president Saket Dalmia said production has bounced back and there is a big demand in the country. The statement comes a day after the International Monetary Fund (IMF) cut its economic growth forecast for India to 6.8 per cent in 2022. The Reserve Bank of India too has cut the economic growth projection for FY23 to 7 per cent from 7.2 per cent estimated earlier on account of extended geopolitical tensions and aggressive monetary policy tightening globally.

Further,  Dalmia also said the chamber has identified 75 potential products such as agriculture and chemicals to promote their exports in 75 countries like the US and Europe to help India achieve trade the target of USD 750 billion by 2027. He said the US, Canada, Germany, France, the UK, Japan, the UAE, and China, among others would be the major focused markets to boost exports of these goods. The other products include textiles, auto, and pharmaceutical items.

Besides, he also said cost of capital is a key challenge for the MSME sector and the chamber has requested the RBI and the government to look into the issues. He added cost and access to capital is a big challenge and banks have 'not done anything or not enough at this front.

The CNX Nifty ended at 17,014.35, down by 109.25 points or 0.64% after trading in a range of 16,956.95 and 17,112.35. There were 16 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL up by 3.16%, Sun Pharma up by 1.34%, Coal India up by 1.06%, Tata Motors up by 0.62% and Britannia up by 0.57%. On the flip side, Wipro down by 7.07%, Adani Ports down by 2.38%, SBI down by 2.31%, SBI Life down by 2.00% and Larsen & Toubro down by 1.84% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 10.26 points or 0.15% to 6,836.41, France’s CAC increased 24.05 points or 0.41% to 5,842.52 and Germany’s DAX was up by 90.28 points or 0.74% to 12,262.54.

Asian markets settled down on Thursday ahead of US consumer price inflation data due later in the day, which could offer more clarity on the Federal Reserve's rate-hike plans to combat soaring inflation. Meanwhile, the US Producer Price Index (PPI) rose at an annual pace of 8.5% in September, down slightly from the 8.7% rise in August. US PPI rose 0.4% month-over-month, the largest rise since May, the Bureau of Labour Statistics said. Further, recession fears and rising Covid-19 cases in China also adding more pressure in market sentiments. Chinese shares dropped ahead of a key Party congress where Xi Jinping is expected to extend his leadership for another term.