Key gauges end lower on weak global cues

Indian equity markets ended lower on Thursday, on the back of weakness in Auto and Consumer Durables stocks amid widespread selling pressure in global markets. A depreciating rupee also put pressure on domestic equities. Markets made a gap-down opening and stayed in red for whole day, as traders remained concerned amid a private report said that India's GDP growth will slow down to 5.5 per cent in FY24 from the 6.9 per cent expected in the current fiscal 2022-23. The slowdown was attributed to slowing global growth and tightening of monetary policies. It said India will be among the lesser affected economies in the world, but made it clear that the world's fifth largest economy is not immune from global headwinds. Traders paid no heed towards private report stated that with an average gross domestic product growth of 5.5 per cent in the past decade, India is already the fastest-growing economy in the world. It added that India is expected to overtake Japan and Germany to become the world’s third-largest economy by 2027. India is also gaining power in the world order.

Sentiments remained down-beat in late afternoon deals, even as a private report stated that Indian consumer price inflation is likely to slow in October to 6.73% on weaker food price rises and a strong base one year ago but remained stubbornly well above the 6% upper limit of the Reserve Bank of India's tolerance band. Meanwhile, another private report stated that the government may soon introduce changes to the capital tax regime, making it simpler. The primary consideration will be parity within the assets, and the Centre may even consider changing the tax rates. The multiple holding periods may also be rationalised.

On the global front, European markets were trading lower as investors fretted about inconclusive U.S. midterm election results and tightening COVID-19 curbs in China. Traders also awaited key U.S. inflation data later in the day that is expected to show some moderation in price growth. Asian markets settled mostly down on Thursday as a surge in COVID-19 cases spurred lockdowns in the southern Chinese manufacturing hub of Guangzhou and uncertainty continued over the outcome of the U.S. midterm elections.  A crash in the crypto market also dented investors' appetite for riskier assets.

Back home, coal stocks were in watch as the Centre said that the demand for coal in India is still to reach its peak and the dry fuel will continue to play a key role in the energy mix till 2040 and beyond. Therefore, shift from coal will not happen in foreseeable future in the country. Stocks related to tourism sector also were in focus as Additional Secretary in the Ministry of Tourism, Rakesh Verma said the tourism sector was hugely impacted due to the COVID-19 pandemic, but it has 'bounced back' from various adversities and crises with 'great resilience.’

Finally, the BSE Sensex fell 419.85 points or 0.69% to 60,613.70 and the CNX Nifty was down by 128.80 points or 0.71% to 18,028.20.

The BSE Sensex touched high and low of 60,848.73 and 60,425.47, respectively. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.02%, while Small cap index was down by 1.05%.

The top losing sectoral indices on the BSE were Auto down by 2.06%, Consumer Durables down by 1.36%, PSU down by 1.14%, Metal down by 0.94% and Industrials down by 0.85%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were HDFC Bank up by 1.13%, Bharti Airtel up by 1.09%, Kotak Mahindra Bank up by 0.83%, Dr. Reddy's Lab up by 0.23% and Hindustan Unilever up by 0.10%. On the flip side, Axis Bank down by 3.54%, Bajaj Finserv down by 3.04%, Titan Company down by 2.99%, Mahindra & Mahindra down by 2.94% and Bajaj Finance down by 2.34% were the top losers.

Meanwhile, giving a strong signal of the country's commitment to a low-carbon economy, Union Minister for Finance & Corporate Affairs Nirmala Sitharaman has approved the final Sovereign Green Bonds framework of India. This approval will further strengthen India’s commitment towards its Nationally Determined Contribution (NDCs) targets, adopted under the Paris Agreement, and help in attracting global and domestic investments in eligible green projects. The proceeds generated from issuance of such bonds will be deployed in Public Sector projects which help in reducing carbon intensity of the economy.

The Framework comes close on the footsteps of India’s commitments under ‘Panchamrit’ as elucidated by the Prime Minister, Narendra Modi, at COP26 at Glasgow in November, 2021. The approval is fulfillment of the announcement in the Union Budget FY 2022-23 by the Union Finance Minister that Sovereign Green Bonds will be issued for mobilising resources for green projects.

Green bonds are financial instruments that generate proceeds for investment in environmentally sustainable and climate-suitable projects. By virtue of their indication towards environmental sustainability, green bonds command a relatively lower cost of capital vis-a-vis regular bonds and necessitates credibility and commitments associated with the process of raising bonds.

In the above context, India’s first Sovereign Green Bonds framework was formulated and as per the provisions of the framework, Green Finance Working Committee (GFWC) was constituted to validate key decisions on issuance of Sovereign Green Bonds.

The CNX Nifty traded in a range of 18,103.10 and 17,969.40. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 2.39%, HDFC Bank up by 1.24%, Kotak Mahindra Bank up by 1.07%, ONGC up by 0.90% and Bharti Airtel up by 0.85%. On the flip side, Tata Motors down by 4.61%, Axis Bank down by 3.70%, Mahindra & Mahindra down by 3.07%, Bajaj Finserv down by 2.72% and Titan Company down by 2.60% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 24.14 points or 0.33% to 7,272.11, France’s CAC decreased 39.83 points or 0.62% to 6,390.74 and Germany’s DAX decreased 14.65 points or 0.11% to 13,651.67.

Asian markets settled mostly down on Thursday, tracking fall in Wall Street overnight ahead of the release of key US inflation data later in the day that is expected to set the tone for monetary policy in the coming months. Market sentiments weakened further amid uncertainty stemming from US midterm elections. Meanwhile, ongoing volatility in the cryptocurrency markets also dented investors' risk appetite. Chinese shares slipped amid growing concerns over economic slowdown as a surge in covid-19 cases spurred lockdowns in the southern Chinese manufacturing hub of Guangzhou.