Post Session: Quick Review

Indian equity benchmarks closed near their day’s low points on Thursday, with both the Nifty and Sensex declining for a fifth consecutive session, weighed down by losses in realty and information technology (IT) stocks. After making a cautious start, indices traded near neutral lines for most part of the session amid persistent foreign fund outflows. In dying hours of the trade, markets added some losses and ended with cut of over half a percent. Traders avoided any long positions ahead of India’s industrial production data, scheduled for release on September 29. 

Some of the important factors in trade:

Continued FIIs outflows: Traders were cautious as Foreign institutional investors (FIIs) offloaded shares worth Rs 2,425.75 crore on a net basis on Wednesday. 

GST reform to promote ease of doing business, strengthen growth drivers: Traders took note of RBI bulletin stating that the GST reform will have a positive impact on the Indian economy by promoting ease of doing business, lowering retail prices, and strengthening consumption growth drivers. 

Jaishankar holds bilateral talks with counterparts from Mexico, Cyprus, Pacific nations: Traders overlooked External Affairs Minister S Jaishankar held a series of bilateral meetings with his counterparts from Mexico, Cyprus, and several Pacific Island nations on the sidelines of the 80th session of the United Nations General Assembly, reaffirming India's commitment to strengthening global partnerships.

Global front: European markets were trading in red, amid sticky inflation and a slowing job market clouded the outlook for U.S. interest rates. Asian markets ended mostly in red as investors awaited more U.S. economic data, including jobless claims and PCE inflation data for directional cues. 

The BSE Sensex ended at 81159.68, down by 555.95 points or 0.68% after trading in a range of 81092.89 and 81840.73. There were 4 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices were trading in red; the BSE Mid cap index was down by 0.72%, while Small cap index down by 0.75%. (Provisional)

The few gaining sectoral indices on the BSE were Telecom up by 0.34% and Metal up by 0.17%, while Realty down by 1.70%, Power down by 1.38%, Utilities down by 1.21%, Consumer Discretionary down by 1.14% and IT down by 1.10% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharat Electronics up by 2.04%, Axis Bank up by 0.28%, Bharti Airtel up by 0.20% and HDFC Bank up by 0.05%. On the flip side, Trent down by 3.58%, Power Grid Corp down by 3.05%, Tata Motors down by 2.73%, TCS down by 2.53% and Asian Paints down by 2.15% were the top losers. (Provisional)

Meanwhile, an article on the state of the economy published in the Reserve Bank of India’s (RBI) September Bulletin has said that the GST reform will have a positive impact on the Indian economy by promoting ease of doing business, lowering retail prices, and strengthening consumption growth drivers. It further said global uncertainty remained elevated in the wake of the imposition of US trade tariffs on major trading partners and renewed concerns over the fiscal health of advanced economies. It said ‘The landmark GST reforms should progressively result in a sustained positive impact through significant gains in ease of doing business, lower retail prices and strengthening of consumption growth drivers’. The government came out with the GST 2.0, a two-rate structure (5 per cent and 18 per cent), replacing the earlier four-rate duty regime. The new rates have come into effect on September 22.

The article said the Indian economy exhibited marked resilience as evident from the five-quarter high growth during Q1 2025-26, propelled by domestic drivers. It noted that consumer price index (CPI) based headline inflation edged up, but remained well below the target rate for the seventh consecutive month. It added system liquidity remained in surplus, facilitating the pass-through of policy rate cuts. It further pointed out that Indian equity markets witnessed bidirectional movements during August-September. India’s current account deficit moderated in Q1 over the last year, supported by robust services exports and strong remittance receipts.

Moreover, the article said the Q1 2025-26 GDP estimates reinforced the resilience of domestic growth drivers. High-frequency indicators for August show manufacturing and services activity at a decadal high. It pointed out that ‘In this scenario, the growth outlook for H2 is one of optimism. Healthy corporate balance sheets and the focus on structural reforms by the government are the bright spots of the economy’. It further said global uncertainty remained elevated in the wake of lingering US trade policy uncertainties with key trading partners, renewed concerns on the fiscal health of advanced economies (AEs) and geopolitical risks.

The article said ‘Net foreign direct investment (FDI) inflows reached a 38-month high in July, aided by higher gross FDI and slower repatriation and outward FDI. Foreign exchange reserves remained adequate, underscoring external sector stability’. In this scenario, the growth outlook for H2 (second half of the year) is one of optimism. Healthy corporate balance sheets and the focus on structural reforms by the government are the bright spots of the economy. Also, a higher kharif sowing is expected to translate to a sustained growth momentum in the agriculture sector, while also keeping food prices under check. However, the RBI said the views expressed in the Bulletin article are of the authors and do not represent the views of the central bank.

The CNX Nifty ended at 24890.85, down by 166.05 points or 0.66% after trading in a range of 24878.30 and 25092.70. There were 9 stocks advancing against 40 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were Bharat Electronics up by 1.95%, Hero MotoCorp up by 1.47%, Axis Bank up by 0.66%, Hindalco up by 0.62% and ONGC up by 0.48%. On the flip side, Trent down by 3.15%, Power Grid Corp down by 3.03%, Tata Motors down by 2.64%, TCS down by 2.57% and Asian Paints down by 2.17% were the top losers. (Provisional)

European markets were trading lower; France’s CAC fell 54.75 points or 0.7% to 7,772.70, Germany’s DAX lost 152.71 points or 0.65% to 23,514.10 and UK’s FTSE 100 decreased 25.98 points or 0.28% to 9,224.45.

Asian markets settled mostly down on Thursday tracking overnight losses on Wall Street as an AI-driven rally showed signs of fatigue and expectations of aggressive Fed interest rate cuts faded, while investors awaited more US economic data, including jobless claims and PCE inflation data for directional cues. However, Japanese shares gained after minutes from the Bank of Japan's July meeting showed that some policymakers believed that the BoJ should consider hiking interest rates in the near future. Investors were also awaiting Friday's Tokyo inflation report, which might provide additional direction on the policy outlook. Chinese shares ended flat as US President Donald Trump is expected to sign the TikTok deal later today.