Post Session: Quick Review

Intensified selling in last leg of trade forced Indian equity markets to end Monday’s session with cut of over a percent. Traders continue to monitor economic and geopolitical uncertainty. Uptick in bond yields dented investors sentiments. Besides, US Fed signaling rates will remain higher for longer than previously anticipated.  All the sectoral indices on the BSE ended with heavy losses. The broader indices, the BSE Mid cap index ended with losses over 2 percent while, Small cap index concluded the session with cut of over 4 percent. 

After making cautious start, markets added losses tracking weak global cues. Traders were worried as the Reserve Bank of India’s data (October 2023 bulletin) stated that net foreign direct investment (FDI) in India, inflows minus outflows, declined sharply in April-August this year to $2.99 billion from $18.03 billion in the same period last year on moderation in global activities and a rise in repatriation. Investors overlooked Finance Minister Nirmala Sitharman’s statement that the government is mindful of the fiscal deficit management and will ensure the burden of servicing debt is not passed on to next generation. She said the government is looking at the ways in which it can bring down the overall debt. Indices continued their weak trade in afternoon session. Traders took note of Shashanka Bhide, one of the three external members on the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), stating that trade-related measures to improve domestic supply can help cool down food inflation only in the short run. Further, markets fell sharply to close near intraday low points, as traders preferred to sell their riskier assets.

On the global front, European markets were trading lower ahead to a busy week for earnings and the European Central Bank’s latest monetary policy decision. All Asian markets ended lower as the conflict between Israel and Hamas intensified and hurt sentiment. The US has warned of a significant risk to its interests in the West Asia. Back home, the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report has showed that India created 1699140 new jobs in the month of August 2023 as against revised figure of 1686224 in July 2023.

The BSE Sensex ended at 64,571.88, down by 825.74 points or 1.26% after trading in a range of 64,502.68 and 65,453.92. There were 2 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 2.51%, while Small cap index was down by 4.18%. (Provisional)

The top losing sectoral indices on the BSE were Telecom down by 3.82%, Industrials down by 3.26%, Utilities down by 3.10%, Basic Materials down by 3.06% and Metal was down by 3.01%, while there were no gaining sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 0.35% and Bajaj Finance up by 0.05%. On the flip side, JSW Steel down by 2.99%, Tata Steel down by 2.52%, TCS down by 2.44%, Tata Motors down by 2.32% and Wipro down by 2.27% were the top losers. (Provisional)

Meanwhile, Finance Minister Nirmala Sitharman has said the government is mindful of the fiscal deficit management and will ensure the burden of servicing debt is not passed on to next generation. She said the government is looking at the ways in which it can bring down the overall debt. She said ‘We are conscious of matters related to macro-economic stability of the country and responsibility with which we deal with our fiscal and also the fiscal management and so for every decisions that we take today, we are conscious of what burden is going to leave for the next generations’. She said it is very easy to be profligate and burden the coming generations with the debt that you will be sitting with.

She also said ‘We are conscious of the debt of government of India. Compared to many others, it might not be as high as it is, but even then, we are consciously looking at experiments in different parts of the world’. She said the government actively look at the data related to debt of some emerging market countries and how they are managing them. The government is successful in managing debt burden because efforts are very well streamlined to meet India's aspirational requirements, but deal with it with a sense of responsibility so that coming generations don't feel the burden. During Covid days, she said, the government spent public money in creating public infrastructure so that there is better return for every rupee rather than go by the temptation of giving money in the hands of people who were suffering.

Observing that India is opening up and bringing greater transparency through the digital economy, Sitharaman said, there's no more powerful tool than digitisation to empower citizens, who otherwise would've remained very far from their developmental aspirations being met. She said ‘Jan-Dhan accounts have been the biggest instrument of bringing financial inclusion to the country. When it was launched in 2014, people raised questions, saying that these would be zero-balance accounts & would be a burden on the Public Sector Banks (PSBs)’. She also highlighted the challenges posed by global terror and stressed that investors and businesses will have to take into account such factors while making investment decisions. 

The CNX Nifty ended at 19,281.75, up by 16746.17 points or 660.45% after trading in a range of 19,257.85 and 19,556.85. There were 2 stocks advancing against 48 stocks declining on the index. (Provisional)

The top gainers on Nifty were Mahindra & Mahindra up by 0.44% and Bajaj Finance up by 0.38%. On the flip side, LTIMindtree down by 3.96%, Adani Enterprises down by 3.56%, Hindalco down by 3.19%, Adani Ports down by 2.80% and UPL down by 2.78% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 52.55 points or 0.72% to 7,349.59, France’s CAC fell 29.99 points or 0.44% to 6,786.23 and Germany’s DAX was down by 138.47 points or 0.94% to 14,660.00.

Asian markets settled down on Monday tracking Friday’s deep losses at the US markets amidst growing geopolitical Middle East tensions and rising US bond yields. Meanwhile, investors were keenly awaiting this week’s US GDP, inflation data and corporate earnings reports from Microsoft, Alphabet, and more. Market in Hong Kong was closed for Chung Yeung Day.