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Snapping four day losing streak, Indian equity benchmarks ended the volatile day of trade in green terrain on Monday, as traders opted to buy beaten-down but fundamentally strong stocks. Markets started the session with weakness and extended losses in first half of the trade as traders remained anxious, as in its recent Regional Economic Outlook (REO), the IMF noted that the pandemic has taken a turn for the worse in Asia since the spring, along with the region’s growth outlook. The growth projection for the Asia and Pacific region is downgraded by more than 1 percent to 6.5 percent compared to the April 2021 forecasts--more than for any other region. Valuation concerns coupled with persistent selling by FIIs also kept traders on sidelines. Foreign portfolio investors (FPIs) have turned net sellers in Indian market by pulling out Rs 3,825 crore in October so far.

However, local bourses staged smart recovery in second half of the trade as traders went for bargain hunting. Some support also came after industry chamber PHDCCI said it expects strong GDP growth in the coming quarters with the economic recovery gaining momentum. Out of the 12 lead economic and business indicators of QET (Quick Economic Trends), tracked by the industry body, nine have shown an uptick in the sequential growth for the month of September 2021 as compared to six showing the uptrend in August 2021. Traders also found some solace with India Ratings & Research’s report stating that the recently-concluded normal monsoon season will provide a much-needed cushion to both India's agriculture and inflation in 2021-22.

Firm opening in European counters too aided sentiments with most of the European counters were trading in green as traders prepared for a flurry of Big Tech earnings reports, delivered against a backdrop of high inflation and signs of impending monetary policy tightening. Meanwhile, Asian markets ended mixed ahead of a week packed with major quarterly earnings announcements.

Back home, Ministry of Power announced new rules to sustain economic viability of the sector, ease financial stress of various stakeholders and ensure timely recovery of costs involved in electricity generation. Meanwhile, in a bid to ease the rollout of communications networks, the Department of Telecom (DoT) has notified an amendment in rules where it has fixed a nominal one-time fee for overground cables at Rs 1,000 per kilometer. It has also waived off all other fees other than administrative fee and restoration charges for establishing, maintaining, working, repairing, transferring or shifting the underground and overground telegraph infrastructure. In scrip specific development, ICICI Bank zoomed after reporting a 30 per cent year-on-year (YoY) jump in net profit in the July-September quarter (Q2FY22), aided by robust net interest income (NII) and other income as well as lower provisions.

Finally, the BSE Sensex rose 145.43 points or 0.24% to 60,967.05 and the CNX Nifty was up by 10.50 points or 0.06% to 18,125.40.       

The BSE Sensex touched high and low of 61404.99 and 60449.68, 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 1.65%, while Small cap index was down by 1.76%.

The lone gaining sectoral index on the BSE was Bankex up by 2.30%, while Realty down by 2.55%, Consumer Discretionary down by 2.03%, Auto down by 1.70%, Consumer Durables down by 1.45% and Industrials down by 1.36% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 10.80%, Axis Bank up by 3.45%, Dr. Reddy's Lab up by 0.71%, SBI up by 0.68% and Mahindra & Mahindra up by 0.49%. On the flip side, Bajaj Finserv down by 3.04%, Bajaj Auto down by 2.73%, HCL Tech down by 2.36%, Asian Paints down by 2.20% and Maruti Suzuki down by 1.99% were the top losers.

Meanwhile, executing confidence over India’s economic growth, Industry chamber -- PHD Chamber of Commerce and Industry (PHDCCI) has said it expects strong GDP growth in the coming quarters with the economic recovery gaining momentum. Out of the 12 lead economic and business indicators of QET (Quick Economic Trends), tracked by the industry body, nine have shown an uptick in the sequential growth for the month of September 2021 as compared to six showing the uptrend in August 2021. Pradeep Multani, President, PHDCCI, said ‘the uptrend in the lead economic and business indicators in the recent months shows that the economic recovery is catching pace and strong economic growth is expected in the coming quarters’.

However, he suggested, at this juncture, there is a need to address the high commodity prices and shortages of raw materials to support the consumption and private investments in the country. PHDCCI stated GST collections, stock market, UPI transactions, exports, exchange rate, forex reserves, CPI inflation, WPI inflation and unemployment rate have registered positive sequential growth in September 2021 as compared to August 2021. Besides, the unemployment scenario improved to 6.9 per cent in September 2021 from 8.3 per cent in the previous month.

PHDCCI said ‘Stock Market (SENSEX -average of daily close) have recorded the sequential growth of 6.4 per cent from 55,238 in August 2021 to 58,781 in September 2021. GST collections registered the sequential growth of 4.5 per cent from Rs 1,12,020 crore in August 2021 to Rs 1,17,010 crore in September 2021’. Multani said supply-side issues such as high input prices, shortages of raw materials, among others are impacting the production possibilities and reducing the price-cost margins of the businesses. He observed that the drivers of household consumption need to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on the expansion of capital investments.

The CNX Nifty traded in a range of 17,968.50 and 18,241.40 and there were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 10.85%, Axis Bank up by 3.48%, ONGC up by 2.77%, JSW Steel up by 0.97% and Dr. Reddy's Lab up by 0.83%. On the flip side, BPCL down by 3.48%, SBI Life Insurance down by 3.21%, Bajaj Finserv down by 3.06%, Bajaj Auto down by 2.66% and HCL Tech down by 2.40% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 35.37 points or 0.49% to 7,239.92, France’s CAC rose 4.29 points or 0.06% to 6,729.40 and Germany’s DAX was up by 46.69 points or 0.30% to 15,589.67.

Asian markets ended mixed on Monday after US Federal Reserve Chairman Jerome Powell said the central bank Fed was on track to start tapering its stimulus, and added that he expected inflation could last until well into next year. Japanese shares declined ahead of this week’s general election, while the yen strengthened. Hong Kong shares ended on a flat note after news of trials of a property tax in China. Seoul shares ended higher amid expectations of strong third-quarter corporate earnings. Chinese shares gained after China Evergrande group said it planned to prioritize growth of its nascent electric vehicles business over its troubled core real estate operations.

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