Key gauges recoup losses to end firm for 2nd straight session

Indian equity benchmarks recouped initial losses to end firm for the second straight session on Tuesday helped by fag-end buying in banking counters and a firm trend in global markets. Easing tensions in the Middle East and a drop in crude prices also provided some relief. After making a cautious start, key gauges fell sharply and spend most of the day under pressure amid continuous foreign fund outflows from the capital markets and largely muted earnings from corporates so far. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,228.08 crore on Monday, according to exchange data. Traders remained cautious with private report stating that the Indian economy has entered a phase of 'cyclical growth slowdown' and the Reserve Bank's estimate of 7.2 per cent GDP expansion is 'overly optimistic'. Investors also covered short positions in the beaten down banking stocks ahead of monthly F&O expiry on Thursday.

However, in late afternoon session, the turnaround was seen across the sectors which supported the indices to recover all their losses to end the day with gains. Traders found solace with the finance ministry’s statement that India's economic outlook remains bright, underpinned by a stable external sector, positive farm prospects and chances of higher government spending to make up for the shortfall during the general elections but ‘underlying demand conditions bear watching’. It also said India's inflation appears largely under control despite sporadic spikes in prices of certain vegetable. Some support also came with RBI Governor Shaktikanta Das’ statement that any concern regarding a 'slowdown' in festive demand this season is outweighed by positive cues from the economy, and the macroeconomic indicators may be giving 'mixed signals. Traders took note of private report that India and Russia are accelerating efforts to establish a rupee-ruble trade mechanism, aiming to reduce reliance on the US dollar amid growing global financial complexities. The two nations are working to create a direct payment system in their respective currencies, a step that could redefine their trade relationship by fostering greater financial independence.

On the global front, European markets were trading higher after a survey showed Germany's consumer confidence is set to recover more strongly in November to hit a more than two-and-a-half-year high. Asian markets ended mostly higher on Tuesday as investors looked ahead to a slew of U.S. economic data as well as tech megacap earnings for directional cues. 

Finally, the BSE Sensex rose 363.99 points or 0.45% to 80,369.03, and the CNX Nifty was up by 127.70 points or 0.52% to 24,466.85. 

The BSE Sensex touched high and low of 80,450.48 and 79,421.35 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 0.74%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were PSU up by 2.33%, Bankex up by 2.20%, Realty up by 1.46%, Capital Goods up by 1.28% and Utilities up by 1.26%, while Auto down by 1.52%, TECK down by 0.81%, Telecom down by 0.74%, IT down by 0.50% and Healthcare down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 5.13%, ICICI Bank up by 3.08%, Bajaj Finserv up by 2.18%, NTPC up by 2.11% and Bajaj Finance up by 1.61%. On the flip side, Maruti Suzuki down by 4.11%, Tata Motors down by 4.06%, Sun Pharma down by 1.67%, Bharti Airtel down by 1.61% and Indusind Bank down by 1.53% were the top losers.

Meanwhile, the Global Trade Research Initiative (GTRI) has said that shortage of Cold-Rolled Grain-Oriented (CRGO) steel used for making transformers and electric motors could impact India's ambitious power sector expansion plans. It said that India's power sector is facing a 30 per cent shortage of CRGO steel, essential for electric motors and transformers. It also said with domestic production meeting only about 10-12 per cent of demand, India relies heavily on imports.

GTRI said the immediate cause of the CRGO steel shortage is import uncertainty caused by the delayed license renewals by the Bureau of Indian Standards (BIS) for many foreign suppliers from Japan, South Korea and China. Many of the licenses are set to expire soon, causing shortages and uncertainty in the power sector. It added that foreign suppliers require BIS certification under a Quality Control Order, which ensures quality but restricts options to a few approved grades and vendors. The entire BIS process needs an urgent review by independent auditors. 

In the long term, India must prioritise local production, as CRGO is now considered a strategic material, and supply may remain limited. Without action, this shortage could jeopardise India's ambitious energy goals. CRGO's grain orientation reduces energy loss, making it essential for transformer cores, which are central to India's power distribution network. In FY 2024, India, one of the largest consumers of CRGO steel, required 400,000 tonnes. With only 50,000 tonnes produced domestically, it had to import 239.2 thousand tonnes from countries like China, Japan, Russia and South Korea. After exporting 11.4 thousand tonnes, only 277.8 thousand tonnes were available for local use, leaving a shortfall of 122.2 thousand tonnes, or 30.6 per cent of total demand.

The CNX Nifty traded in a range of 24,484.50 and 24,140.85. There were 31 stocks advancing against 18 stocks declining, while 1 stock remained unchanged on the index. 

The top gainers on Nifty were SBI up by 5.05%, Bharat Electronics up by 4.89%, Eicher Motors up by 3.38%, HDFC Life Insurance up by 3.32% and SBI Life Insurance up by 3.18%. On the flip side, Maruti Suzuki down by 4.16%, Tata Motors down by 3.92%, Hero MotoCorp down by 2.88%, Dr. Reddy's Lab down by 2.52% and Sun Pharma down by 2.04% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 11.72 points or 0.14% to 8,297.34, France’s CAC rose 32.84 points or 0.43% to 7,589.78 and Germany’s DAX gained 79.06 points or 0.4% to 19,610.68.

Asian markets ended mostly higher on Tuesday tracking Wall Street’s gains overnight as investors looked ahead to a slew of US economic data as well as earnings from several of the biggest tech-related companies like Alphabet, Meta, Microsoft, Apple and Amazon due this week for directional cues. Japanese shares gained as the weaker yen boosted exporters, despite the political uncertainty following Sunday’s general election which left the ruling coalition short of a majority. However, Chinese shares declined ahead of a top leadership meeting next week.