Markets witness bloodbath in early deals

Bears took full charge on Dalal Street, as Sensex and Nifty made gap-down opening on Thursday tracking sell-off in the global markets as Alphabet shares slid after the Google parent posted disappointing earnings and as U.S. Treasury yields rose, reviving fears that interest rates could stay higher for longer. Domestic indices soon extended their losses and slipped to the lowest level in four months in early deals. Sensex and Nifty are trading deeply in red with cut of around a percent each. Broader indices - BSE Mid & Small cap indices plunged over two percent. Traders remained worries amid rising US bond yield that may result in more fund outflows from India. Provisional data from the National Stock Exchange showed that foreign institutional investors sold shares worth Rs 4,236.60 crore on October 25. On the global front, all the Asian markets are trading in red amid worries about the conflict in the Middle East amidst reports of an imminent ground invasion of Gaza by Israel. 

Back home, on the sectoral front, hotel industry stocks are in focus as rating agency Icra said the hotel industry will report double-digit revenue growth in FY2024, supported by the sustenance of domestic leisure and business travel and an increase in foreign tourist arrivals. Icra estimates pan-India premium hotel occupancy at around 70-72 per cent in FY24, after recovering to 68-70 per cent in FY23. In stock specific development, Axis Bank rose on reporting a 10 percent rise in its Q2 net profit.

The BSE Sensex is currently trading at 63454.49, down by 594.57 points or 0.93% after trading in a range of 63403.42 and 63774.16. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 2.09%, while Small cap index was down by 2.82%.

The top losing sectoral indices on the BSE were Realty down by 3.26%, Industrials down by 2.36%, Utilities down by 2.28%, Power down by 2.09% and PSU down by 2.05%, while there was no gainer on the BSE sectoral front.

The sole gainer on the Sensex was Axis Bank up by 1.17%. On the flip side, Tech Mahindra down by 2.45%, Bajaj Finserv down by 2.38%, Mahindra & Mahindra down by 2.34%, Bajaj Finance down by 2.24% and Tata Motors down by 1.89% were the top losers.

Meanwhile, expressing optimism over Central Bank’s digital currency, the Reserve Bank Governor Shaktikanta Das has said that the Central Bank Digital Currency (CBDC), which is being promoted by the central bank, can play an important role in cross-border payments without much difficulty. He said the Reserve Bank has undertaken pilot projects with regard to promotion of the CBDC and the results have been ‘excellent’. The CBDC as a pilot was introduced in the wholesale and retail segments and will now be extended to overnight money markets.

He further said ‘The learning has been excellent and more than what it was one year ago. We are even more convinced that CBDC can prove to be the most effective and efficient mode for cross-border payments in particular, other than of course domestic transactions. And this is not something which is very difficult’. He emphasised that while paper currency will continue, the CBDC is going to be the future currency of the world. He noted ‘CBDC is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC’.

He added that the world is moving towards technology, and CBDCs have a major role, because they can really facilitate efficient, cost-effective and faster payments across jurisdictions for cross border payments for cross border transactions. On India's foreign exchange reserves, the governor said it was a conscious decision to build up the reserves as a buffer and insurance against spillover risks. He said the reserves did help India during the Ukraine war when the US dollar suddenly became very strong and all the emerging market currencies depreciated.

The Indian currency did not depreciate as much because the market had confidence that the Reserve Bank of India would be able to meet its obligations. The governor further said he would not hesitate to say that the RBI does intervene in the market but ‘our intervention is both ways’. He said sometimes the RBI buys dollars and sometimes it sells dollars as it depends on which way the market is moving. But RBI's objective is not to fix the rupee to have a particular level as the central bank does not have any particular level (exchange rate) of Indian rupee for the Indian rupee in its mind against the dollar. Das also stressed the importance of coordination between the fiscal and monetary authorities.

The CNX Nifty is currently trading at 18935.35, down by 186.80 points or 0.98% after trading in a range of 18920.65 and 19041.70. There was 1 stock advancing against 49 stocks declining on the index.

The sole gainer on Nifty was Axis Bank up by 1.19%. On the flip side, Adani Enterprises down by 2.90%, Tech Mahindra down by 2.61%, Bajaj Finserv down by 2.41%, Mahindra & Mahindra down by 2.41% and Bajaj Finance down by 2.26% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 614.61 points or 2% to 30,655.31, Taiwan Weighted lost 252.75 points or 1.57% to 16,106.14, Jakarta Composite plunged 109.73 points or 1.63% to 6,724.66, Hang Seng declined 94.47 points or 0.56% to 16,990.86, KOSPI dropped 57.90 points or 2.51% to 2,305.27, Straits Times fell 13.01 points or 0.42% to 3,065.77 and Shanghai Composite was down by 8.76 points or 0.3% to 2,965.35.