IGI Logo

Indian equity benchmarks ended a volatile session lower on Wednesday, extending losses to a second straight day amid brisk selling in frontline bluechip counters. Markets opened on a positive note as sentiments got a boost with Niti Aayog Vice-Chairman Rajiv Kumar’s statement that Niti Aayog Vice-Chairman Rajiv Kumar has said that the country’s economy is likely to grow by 10 per cent or more in the current fiscal (FY22), and going forward, once Indian economy out of the COVID-19 pandemic, it will grow at 8 per cent plus in the next fiscal year (FY23). Some optimism also came with a private report stating that hiring activity expanded by 43 per cent year-on-year in October driven by strong demand for technology professionals. According to the report, with 2,523 job listings in October 2021, there was a 43 per cent year-on-year (Y-O-Y) growth.

However, markets erased all early gains, with indices slipping further during closing hours, even as a private survey showed India's dominant services industry expanded at the fastest pace in more than a decade on improved domestic demand despite high inflation, driving firms to take on staff at a rate not seen since the onset of the pandemic. The IHS Markit Services Purchasing Managers' Index accelerated to 58.4 last month from 55.2 in September, above the 50-mark separating growth from contraction for a third straight month. Traders overlooked Minister of State for Electronics and IT Rajeev Chandrasekhar’s statement that India has an ‘unprecedented opportunity’ to grow electronics manufacturing to $300 billion in the next 3-4 years, building on scale, competitiveness, large market and enabling policies.  He also said the world is seeking more trusted sources for electronics manufacturing post the outbreak of COVID-19 and India has all the essential elements in place to seize the opportunity.

On the global front, Asian markets ended mostly lower on Wednesday, while European markets were trading mostly in red, as investors adopted a cautious approach ahead of the U.S. Federal Reserve's monetary policy announcement due later in the day. Amid soaring inflation across the globe due to rising demand and supply bottlenecks, the U.S. central bank is expected to announce its stimulus tapering timeline. Back home, on the sectoral front, auto stocks were in focus as automobile dealers' body FADA termed the current festive season as the worst in terms of business in a decade for its retail partners across the country. The industry body said the chip shortage situation has impacted offtake in the passenger vehicle segment. Banking stocks were in action as the RBI issued a revised Prompt Corrective Action (PCA) framework for banks to enable supervisory intervention at appropriate time and also act as a tool for effective market discipline. It said capital, asset quality and leverage will be the key areas for monitoring in the revised framework.

Finally, the BSE Sensex fell 257.14 points or 0.43% to 59,771.92 and the CNX Nifty was down by 59.75 points or 0.33% to 17,829.20.           

The BSE Sensex touched high and low of 60,361.82 and 59,552.49, respectively and there were 13 stocks advancing against 17 stocks declining on the index. 

The broader indices ended in red; the BSE Mid cap index fell 0.22%, while Small cap index was down by 0.33%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.24%, Realty up by 2.05%, Metal up by 0.93%, Industrials up by 0.85% and Basic Materials up by 0.60%, while Telecom down by 1.50%, Bankex down by 1.32%, Auto down by 1.13%, Consumer Durables down by 1.07% and FMCG down by 0.58% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.99%, Ultratech Cement up by 2.22%, Asian Paints up by 1.84%, SBI up by 1.14% and Tata Steel up by 0.87%. On the flip side, Sun Pharma down by 3.27%, Indusind Bank down by 2.79%, Kotak Mahindra Bank down by 1.97%, Bharti Airtel down by 1.95% and ICICI Bank down by 1.87% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, Niti Aayog Vice-Chairman Rajiv Kumar has said that the country’s economy is likely to grow by 10 per cent or more in the current fiscal (FY22), and going forward, once Indian economy out of the COVID-19 pandemic, it will grow at 8 per cent plus in the next fiscal year (FY23), Niti Aayog Vice-Chairman Rajiv Kumar said. He further said that seven years of the Modi government has laid a strong economic foundation for businesses to thrive in India.

Kumar said ‘According to the IMF, India will be the fastest growing major economy for the next five years. These are underestimations’. There was a hiccup (in economic growth) for two years due to COVID-19 pandemic. The IMF has projected a growth of 9.5 per cent in 2021. He noted that ‘Things are changing and people are ready to invest in India’.

The Niti Aayog Vice-Chairman said the potential rate of growth of India will move up to 8 per cent. Meanwhile, the country's economy grew by a record 20.1 per cent in the April-June quarter, helped by a very weak base of last year and a sharp rebound in the manufacturing and services sectors in spite of the devastating second COVID wave.

The CNX Nifty traded in a range of 17,988.75 and 17,757.95 and there were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 4.25%, Asian Paints up by 2.43%, Hindalco Industries up by 2.32%, Grasim Industries up by 2.19% and UPL up by 2.07%. On the flip side, Sun Pharma down by 3.24%, Indusind Bank down by 2.68%, Bharti Airtel down by 2.30%, ICICI Bank down by 2.05% and Kotak Mahindra Bank down by 1.91% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 20.59 points or 0.28% to 7,254.22, Germany’s DAX decreased 8.76 points or 0.05% to 15,945.69 and France’s CAC increased 0.80 points or 0.01% to 6,927.83.

Asian markets ended mostly lower on Wednesday ahead of the US Federal Reserve's monetary policy outcome due later in the day, where the US Central Bank is expected to approve plans for scaling back its current $120-billion in monthly bond purchases. Chinese shares declined as market sentiment was dampened by spiking new locally transmitted Covid-19 cases in the country, which lifting the prospect of fresh curbs in Beijing. Moreover, Chinese Premier Li Keqiang warned of downward pressure in the world’s second-top economy. Meanwhile, investors are digested the latest economic data from China where activity in services sector expanded in October. The Japanese stock market was closed in observance of Culture Day.

Above views are of the author and not of the website kindly read disclaimer