Indian equity benchmarks made a smart intra-day recovery after opening with losses but failed to hold gains and closed deep in the red on Monday, following weak global sentiments. This was the second consecutive session in which the markets ended in the red. Key indices opened with a gap down as traders got anxious with report that the country’s foreign exchange reserves declined by $1.34 billion to $641.113 billion in the week ended September 10, 2021, according to RBI data. During the reporting week ended September 10, the fall in the reserves was on account of a decline in Foreign Currency Assets (FCAs), a major component of the overall reserves. Some cautiousness also prevailed in the markets with President Ram Nath Kovind’ statement the Covid pandemic hit the country's economy hard and the government has taken various fiscal measures to alleviate distress and help the poor.
However, markets recouped initial losses to trade marginally higher in late morning deals, taking support from Commerce and Industry Minister Piyush Goyal’s statement that Simplification, facilitation and ease of doing business has helped India create more startups. For promoting startups, he said the government is creating future global leaders and wants to become the innovation hub of the world. Some support also came with Sebi data indicating that investment through participatory notes (P-notes) in the domestic capital market was at Rs 97,744 crore till August-end, and going forward the inflow is expected to remain positive for the rest of the year. But, buying proved short-lived as markets once again entered into red terrain and ended in a bear grip, as investors were spooked by a possible spillover of China's Evergrande's debt woes, fall in commodity prices and ahead of US Federal Reserve policy meet outcome. Traders also took a note of report that hiring activity in India witnessed a marginal growth of 1 per cent in August sequentially due to decline in job postings in sectors including engineering, logistic, agro-based industries among others, which has shown a slight improvement in the previous month.
On the global front, Asian markets settled lower on Monday following firmly negative cues from Wall Street, as traders continue to express concerns that the surge coronavirus cases in the region and other countries, particularly in the US, could dent the pace of global economic recovery from the pandemic. European markets were trading lower as Destatis reported German producer price inflation rose to 12 percent in August from 10.4 percent in July. This was the biggest growth since December 1974, when prices were up 12.4 percent amid the first oil crisis. Back home, on the sectoral front, aviation stocks were buzzing as the Ministry of Civil Aviation stated that airlines can now operate a maximum of 85 per cent of their pre-Covid domestic flights instead of the 72.5 per cent allowed till date. Stocks related to telecom sector too were in focus as Moody's Investors Service said the telecom sector reforms package announced by the government will sustain telcos' businesses, is credit positive for operators, including Airtel and Jio, and provides support for 3+1 players structure.
Finally, the BSE Sensex fell 524.96 points or 0.89% to 58,490.93 and the CNX Nifty was down by 188.25 points or 1.07% to 17,396.90.
The BSE Sensex touched high and low of 59,202.56 and 58,389.69, respectively and there were 8 stocks advancing against 22 stocks declining on the index.
The broader indices ended in red; the BSE Mid cap index fell 1.79%, while Small cap index was down by 1.84%.
The only gaining sectoral index on the BSE was FMCG up by 0.68%, while Metal down by 6.80%, Basic Materials down by 4.14%, PSU down by 2.87%, Realty down by 2.16% and Utilities down by 1.92% were the top losing indices on BSE.
The top gainers on the Sensex were Hindustan Unilever up by 2.84%, Bajaj Finserv up by 1.10%, ITC up by 1.08%, HCL Technologies up by 0.88% and Nestle up by 0.70%. On the flip side, Tata Steel down by 9.53%, SBI down by 3.69%, Indusind Bank down by 3.50%, HDFC down by 2.90% and Dr. Reddy's Lab down by 2.30% were the top losers.
Meanwhile, President Ram Nath Kovind has said the Covid-19 pandemic hit the country's economy hard. Kovind said the past 18 months have been very trying for the country. He stated the government has taken various fiscal measures for the welfare of the poor and alleviate distress.
He added ‘these are often financed through money, which may be said to have been borrowed from our children and grandchildren. We owe it to them that these scarce resources are put to best possible use and are most effectively used for the welfare of the poor, he said, adding that CAG has a very important role in this.’
He mentioned audit engagements provide a unique opportunity of gaining deep understanding of the system and place CAG in a good position of suggesting improvements.
The CNX Nifty traded in a range of 17,622.75 and 17,361.80 and there were 7 stocks advancing against 43 stocks declining on the index.
The top gainers on Nifty were Hindustan Unilever up by 2.88%, Bajaj Finserv up by 1.06%, ITC up by 0.78%, Nestle up by 0.72% and HCL Technologies up by 0.56%. On the flip side, Tata Steel down by 10.00%, JSW Steel down by 7.69%, Hindalco down by 6.14%, UPL down by 5.31% and BPCL down by 3.84% were the top losers.
European markets were trading lower; UK’s FTSE 100 decreased 114.84 points or 1.65% to 6,848.80, France’s CAC fell 142.56 points or 2.17% to 6,427.63 and Germany’s DAX was down by 349.23 points or 2.25% to 15,140.94.
Asian markets settled lower on Monday, tracking negative global cues ahead of the US Federal Reserve’s upcoming policy meeting for clues on the central bank’s tapering of its easy monetary policy, while holidays in China, Japan, South Korea and Taiwan kept trading thin. Concerns over continued spread of the Covid-19 cases too weighed market sentiments. Hong Kong shares ended lower as property developer China Evergrande Group continuing to drop ahead of its bond payments deadline due later this week.