Sensex, Nifty hit new record closing highs on Monday

Rising for the third day in a row, Indian equity benchmarks scaled their new record closing high levels on Monday, helped by strong foreign fund inflows and a largely firm trend in Asian markets. Foreign Institutional Investors (FIIs) bought equities worth Rs 14,064.05 crore on Friday, according to exchange data. Markets opened with gains and traded with a positive bias for whole day as traders took encouragement with a latest report by the Reserve Bank of India (RBI) showing that India's net foreign direct investment (FDI) during the April-July period of the current financial year (FY25) rose to $5.5 billion compared to $3.8 billion in the year-ago period. Besides, the Reserve Bank data showed that India’s forex reserves rose by $223 million to a new all-time high of $689.458 billion for the week ended on September 13. Some support came as a labour ministry stated that retail inflation for farm workers and rural labourers eased to 5.96 per cent and 6.08 per cent, respectively, in August against the comparative figures of 6.17 per cent and 6.20 per cent recorded in July this year. 

Markets extended gains in second half of trading session, taking support from a private report stating that India continues to be a bright spot in an otherwise gloomy global outlook and the country could clock a 7 per cent growth in the current fiscal despite the headwinds. Traders overlooked report that a slowdown in business activity of both the manufacturing and services sector pulled down the expansion of India’s private sector economy in September, according to a survey by HSBC. According to the survey carried out by the global banker, the headline flash composite Purchasing Managers’ Index (PMI) figure declined to 59.3 in September, lowest in 2024, from an upward revised figure of 60.7 in August. Softer expansions were seen across both the manufacturing and services sectors. 

On the global front, Asian markets settled mostly higher on Monday as Fed Governor Christopher Waller said that inflation is falling more quickly than expected, giving the U.S. central bank space to ease more in the coming months. European markets were trading lower as investors reacted to weak business activity data and the latest political developments in the region. Eurozone business activity contracted more than expected in September, with the corresponding PMI falling to 48.9 from 51.0 as both services and manufacturing sectors weakened. 

Back home, on the sectoral front, auto stocks were in focus as ratings agency ICRA said the competition between strong hybrid cars and electric vehicles (EVs) is expected to remain stiff, and each of them could have an eight per cent volume share in the Indian domestic passenger vehicle market by 2027-28. In 2023-24, strong hybrid cars and EVs each had a two per cent share in the domestic passenger market. 

Finally, the BSE Sensex rose 384.30 points or 0.45% to 84,928.61, and the CNX Nifty was up by 148.10 points or 0.57% to 25,939.05.     

The BSE Sensex touched high and low of 84,980.53 and 84,607.38 respectively. There were 19 stocks advancing against 11 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.73%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.23%, Realty up by 2.07%, Telecom up by 1.93%, Energy up by 1.80% and PSU up by 1.77%, while IT down by 0.40% was the lone losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.29%, SBI up by 2.55%, Bharti Airtel up by 2.25%, Kotak Mahindra Bank up by 1.71% and Hindustan Unilever up by 1.62%. On the flip side, ICICI Bank down by 1.25%, Indusind Bank down by 1.05%, Asian Paints down by 0.97%, Tech Mahindra down by 0.89% and HCL Technologies down by 0.49% were the top losers.

Meanwhile, the Reserve Bank of India’s (RBI) in its latest data has indicated that India's net foreign direct investment (FDI) rose to $5.5 billion during the April-July period of the current financial year (FY25) as compared to $3.8 billion in the same period last year. The gross inward FDI grew by 23.6 per cent year-on-year to $27.7 billion during the April-July period from $22.4 billion in the same period last year.  

As per the data, repatriation and divestment by foreign investors in India increased to $15.9 billion in the first four months of FY25 as compared to $14.7 billion in the year-ago period. With more than three-fourths of the flows, the major source countries were Singapore, Mauritius, the Netherlands, the US, Belgium and Japan. Non-resident deposits recorded net inflows of $5.8 billion during April-July 2024 as compared with $3 billion a year ago, with higher inflows in all three accounts. Manufacturing, financial services, communication services, computer services, electricity, and other energy sectors accounted for more than three-fourths of the gross FDI inflows.

It further said net FDI flow dropped sharply to $9.8 billion in FY24 from $28 billion in the previous year. In FY22, net FDI flows into the country were $38.6 billion. Net foreign portfolio investment (FPI) was to the tune of $4.3 billion during August, the third consecutive month of net inflows.

The CNX Nifty traded in a range of 25,956.00 and 25,847.35. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.66%, Mahindra & Mahindra up by 3.26%, ONGC up by 3.06%, Hero MotoCorp up by 2.94% and SBI Life Insurance up by 2.66%. On the flip side, Eicher Motors down by 1.64%, ICICI Bank down by 1.23%, Divi's Lab down by 1.19%, Wipro down by 1.13% and Indusind Bank down by 1.01% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 29.86 points or 0.36% to 8,298.86, France’s CAC fell 46.54 points or 0.61% to 7,568.87 and Germany’s DAX lost 152.03 points or 0.8% to 18,850.35.

Asian markets settled mostly higher on Monday as investors awaiting US PCE inflation data and speeches from Federal Reserve officials for fresh insight on the pace and scope of easing. Meanwhile, US Fed Governor Christopher Waller said inflation is falling more quickly than expected, that giving the US central bank space to ease more in the coming months. Chinese shares gained after Chinese central bank lowered a short-term policy rate and pumped more liquidity into the financial system in a bid to boost the Chinese economy. However, Hong Kong shares declined marginally after reports that the US Department of Commerce is preparing to propose a ban on the use of Chinese software and hardware in connected and autonomous vehicles on American roads. Japanese market was closed for observation of the Autumnal Equinox holiday.