Benchmarks end volatile session marginally lower on Monday

In a volatile trade, Indian equity benchmarks ended marginally lower on Monday, as investors awaited inflation data, due later in the day, for clues on the central bank's interest rate trajectory. Investors also awaited the last leg of corporate earnings for domestic cues. Key gauges made cautious start and fluctuated between losses and gains during the session, as traders were cautious with latest data released by the central bank showed that the Reserve Bank of India’s (RBI’s) foreign exchange reserves declined by $1.1 billion to $529.99 billion in the week ended November 4. Sentiments remained downbeat as a private report stated that asset management companies mobilised Rs 17,805 crore through 67 new fund offerings (NFOs) in the September 2022 quarter, a 64 per cent decline from the year-ago period, on expensive valuations and high volatility in equity markets.

However, losses remain capped as Reserve Bank Governor Shaktikanta Das exuded confidence that India will continue to be the fastest growing major economy with a likely growth rate of 7% in 2022-23 on the back of strong macroeconomic fundamentals and financial sector stability. Some support also came as India’s inflation based on wholesale price index (WPI) eased further to 8.39% in the month of October 2022 as against 10.70% recorded in September 2022, primarily contributed by fall in the price of mineral oils, basic metals, fabricated metal products, except machinery and equipment; textiles; other non-metallic mineral products; minerals etc. Traders also found some solace with Finance Minister Nirmala Sitharaman’s statement that India has emerged as one of the fastest-growing major economies in the world and is expected to be one of the top three economic powers globally over the next 10-15 years.

On the global front, European markets were trading higher after Chinese authorities unveiled sweeping measures to rescue the country's struggling property sector. Investors also awaited the outcome of a rare face-to-face meeting between the leaders of the world's two largest economies taking place on the sidelines of this week's Group of 20 Summit in Bali. Asian markets ended mostly in red on Monday as hawkish comments from a Federal Reserve official offset investor optimism over China's sweeping rescue package to salvage its real estate market.

Back home, airlines industry stocks remained under pressure after credit rating agency ICRA in its latest report said that the domestic airlines industry is projected to post a loss of Rs 15,000-17,000 crore in the current fiscal as their financial performance is likely to remain under pressure in the near term. Stocks related to logistics sector were in watch as Union Ports, Shipping and Waterways Minister Sarbananda Sonowal said India's economy will not be strong unless the logistics system is improved, so the government is speeding up infrastructure projects.

Finally, the BSE Sensex fell 170.89 points or 0.28% to 61,624.15 and the CNX Nifty was down by 20.55 points or 0.11% to 18,329.15.

The BSE Sensex touched high and low of 61,916.24 and 61,572.03, respectively. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.25%.

The top gaining sectoral indices on the BSE were Metal up by 1.48%, Realty up by 1.05%, IT up by 0.77%, Healthcare up by 0.56% and TECK up by 0.46%, while FMCG down by 1.29%, PSU down by 0.72%, Power down by 0.69%, Capital Goods down by 0.66% and Utilities down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.27%, Tata Steel up by 1.07%, Power Grid Corporation up by 1.05%, Indusind Bank up by 1.04% and Infosys up by 0.89%. On the flip side, Dr. Reddy's Lab down by 3.94%, ITC down by 2.57%, Hindustan Unilever down by 1.83%, SBI down by 1.42% and ICICI Bank down by 1.32% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has exuded confidence that India will continue to be the fastest growing major economy with a likely growth rate of 7 per cent in current financial year (FY23) on the back of strong macroeconomic fundamentals and financial sector stability. He emphasised that the country's economy remains resilient, supported by the banking and non-banking sectors.

He stated the entire world has withstood multiple shocks. ‘I call it triple shocks of COVID-19 pandemic, then the war in Ukraine, and now the financial market turmoil.’ He mentioned that the financial market turmoil is mainly emanating from the synchronised monetary policy tightening across the world by central banks, especially those in advanced countries, led by the US Fed, and the spillovers are being felt by the emerging market economies, including India.

Further, he said in this kind of successive turmoils, European Union is facing a recession situation, but there are possibilities that it will avoid that. The US is holding stable, but there are other countries where the growth has slowed down. He added so far as India is concerned, economy, overall macroeconomic fundamentals, the financial sector stability, all these aspects remain resilient. The banking sector that is the financial sector is stable because of all the parameters with regard to banking or the non-banking lenders or the other major financial sector players.

The CNX Nifty traded in a range of 18,399.45 and 18,311.40. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 5.76%, Apollo Hospital up by 2.83%, Tata Motors up by 2.36%, Grasim Industries up by 2.19% and Power Grid Corporation up by 1.39%. On the flip side, Dr. Reddy's Lab down by 3.78%, Coal India down by 2.51%, ITC down by 2.50%, Hindustan Unilever down by 1.80% and SBI down by 1.46% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 25.05 points or 0.34% to 7,343.09, France’s CAC increased 19.79 points or 0.3% to 6,614.41 and Germany’s DAX increased 53.66 points or 0.38% to 14,278.52.

Most of the Asian markets finished in red on Monday, as the hawkish comments by Federal Reserve Chairman and rising Covid cases in China raised concerns over global economic growth, and profit booking after previous sessional huge gains. However, some losses were capped in the session amid news that China lifted some of its covid curbs and as the government affirmed some plans for financial institutions to rescue the property sector. Japan’s Nikkei retreated from its two-month high-rate mirroring negative cues in the global market. Hang Seng and Shanghai were also in negative trend as China’s policy shifts began to fade and caution ahead to Tuesday’s slew of Chinese economic data for October.