Key gauges snap 5-day losing streak

Indian equity benchmarks exhibited a rebound after continuous selloff and ended with gains of over half percent on Monday, supported by robust performances from the banking sector, particularly ICICI Bank, which reported earnings that exceeded profit expectations for the September quarter. Markets made a positive start but soon turned cautious as traders were concerned amid foreign fund outflows. Foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities. However, markets rebounded sharply in morning deals as traders took support with report stating that with the finance ministry seeking ‘justification’ for continuing the Interest Equalisation Scheme (IES) for exporters, the commerce department is exploring ways to revamp it to ensure the scheme meets the objectives outlined during its launch nine years ago. The scheme is currently set to expire on December 31. 

Markets extended gains in afternoon deals, as sentiments remained up-beat after a private report stated that there has been a cumulative 74.2 per cent decline in income disparity coverage for those earning up to Rs 5 lakh annually between fiscal years 2013-14 and 2022-23. Some optimism also came as the Reserve Bank of India (RBI) in its latest survey on ‘International Trade in Banking Services, 2023-24’ has showed that Indian banks increased their overseas presence during 2023-24 both in terms of balance sheet size as well as in terms of number of branches and employees. Besides, the income tax department has extended the deadline for filing income tax returns by corporates by 15 days till November 15 for assessment year 2024-25. However, towards the end, key indices erased some of their gains amid ongoing foreign selling and lackluster corporate quarterly earnings. Some concern also came as India’s foreign exchange reserves slumped for third straight week, after having scaled an all-time high early this month.

On the global front, European markets were trading mostly in red ahead of a busy week for earnings and economic releases. The Eurozone will reveal preliminary flash GDP, consumer confidence and economic sentiment data on Wednesday, with investors looking for clues on how aggressively the European Central Bank will cut interest rates going forward. Asian markets settled mixed on Monday amid lingering concerns the US Fed will lower interest rates slower than previously anticipated after revised data showed US consumer sentiment unexpectedly improved in the month of October.

Finally, the BSE Sensex rose 602.75 points or 0.76% to 80,005.04, and the CNX Nifty was up by 158.35 points or 0.65% to 24,339.15. 

The BSE Sensex touched high and low of 80,539.81 and 79,418.82 respectively. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.79%, Realty up by 1.40%, Telecom up by 1.37%, Healthcare up by 1.36% and PSU up by 1.35%, while Energy down by 0.38% and Capital Goods down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.96%, Adani Ports &SEZ up by 2.80%, JSW Steel up by 2.68%, Tata Steel up by 2.50% and Mahindra & Mahindra up by 2.36%. On the flip side, Axis Bank down by 1.43%, Kotak Mahindra Bank down by 1.08%, Tech Mahindra down by 0.72%, HDFC Bank down by 0.48% and Maruti Suzuki down by 0.12% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest survey on ‘International Trade in Banking Services, 2023-24’ has showed that Indian banks increased their overseas presence during 2023-24 both in terms of balance sheet size as well as in terms of number of branches and employees. The survey noted that their employee strength increased by 8.2 per cent in overseas branches and 1.7 per cent in subsidiaries. During the year, the number of branches and employees of foreign banks in India also expanded by 0.6 per cent and 1.4 per cent, respectively. 

According to the survey report, consolidated balance sheets of overseas branches and subsidiaries of Indian banks grew by 4.3 per cent and 0.4 per cent, respectively, during the year whereas that of foreign banks in India recorded higher increase of 7.2 per cent, in US dollar terms. In US dollar terms, overseas branches of Indian banks recorded 8.8 per cent growth in deposits while their lending declined marginally by 0.8 per cent during the year; these changes, inter alia, also reflected cross-currency movements. 

The report also stated that total income to assets ratio of overseas branches of Indian banks increased to 6.2 per cent in 2023-24 (3.9 per cent in 2022-23) but it remained lower than that of Indian banks’ subsidiaries (7.3 per cent) and foreign banks’ operating in India (7.6 per cent). Besides, it said that high rise in interest rates resulted in acceleration in total income during 2023-24; fee income of overseas branches of Indian banks and the foreign banks operating in India also increased during the year but it declined for the relatively minor segment of overseas subsidiaries of Indian banks.

The CNX Nifty traded in a range of 24,492.60 and 24,134.90. There were 36 stocks advancing against 14 stocks declining on the index. 

The top gainers on Nifty were Shriram Finance up by 5.35%, Adani Enterprises up by 4.07%, ICICI Bank up by 3.10%, JSW Steel up by 3.00% and Wipro up by 2.90%. On the flip side, Coal India down by 3.76%, Bajaj Auto down by 2.07%, Axis Bank down by 1.29%, Hero MotoCorp down by 1.19% and Bharat Electronics down by 0.92% were the top losers. 

European markets were trading mostly in red; UK’s FTSE 100 decreased 21.07 points or 0.26% to 8,227.77 and Germany’s DAX lost 35.3 points or 0.18% to 19,428.29, while France’s CAC rose 12.74 points or 0.17% to 7,510.28.

Asian markets settled mixed on Monday ahead of key US inflation, GDP prints and labor market data due later in the week to gauge the possibility of further interest rate cuts by the US Federal Reserve. Japanese shares rallied after the country's ruling Liberal Democratic Party lost its majority in Parliament's lower house in weekend elections and as a weaker yen lifted exporters. Chinese shares gained, despite data showed that China's industrial profits in September dropped at its fastest pace since the pandemic. Meanwhile, Seoul shares rose on the back of gains in the technology sector.