IGI Logo

Indian equity benchmarks witnessed bearish trend on Thursday with frontline gauges ending below their crucial 60,000 (Sensex) and 17,900 (Nifty) levels amid broad-based selling pressure as traders remain concerned over sustained foreign fund outflow. Foreign institutional investors (FIIs) were net sellers in the capital market, as they offloaded shares worth Rs 469.50 crore on November 10, 2021. Sentiments remained weak since morning with key gauges making a negative start as traders remained on sidelines looking forward to the last leg of quarterly numbers from India Inc for further cues. Traders shrugged off Finance Ministry’s latest economic report stating that India’s economic recovery has continued to trend upwards even as global economic recovery remains hamstrung.

Markets extended losses on report that India’s widening current account deficit (CAD), driven by the massive spike in commodity prices led by crude oil, is set to put pressure on the fragile recovery, warns a brokerage report that has revised upwards its CAD forecast to USD 45 billion or 1.4 percent of GDP by March. Traders also remained anxious after RBI’s governor Shaktikanta Das said monetary policy normalisation or unwinding is not as simple as rolling back a carpet but a much more complex and long-term process. Shaktikanta Das exuded confidence in the economy clipping at the projected 9.5 per cent growth this fiscal, stating that growth impulses and the fast-moving economic indicators are strong. Traders overlooked a finance ministry report said that armed with necessary macro and micro growth drivers, India is on its way to becoming the fastest growing major economy in the world. Also, market participants overlooked report that India’s GDP will rise by $406 billion by 2050 and more than 43 million jobs will be created, as the Asia’s third-largest economy leaps towards a net-zero target.

On the global front, European markets were trading mostly in green despite data showing a spike in U.S. inflation encouraged bets on interest rate hikes and offset some optimism around property developer China Evergrande and a slew of corporate earnings. Asian markets ended mostly in green even after unemployment rate in Australia increased to a seasonally adjusted 5.2 percent in October. That was well above expectations for 4.8 percent and up from 4.6 percent in September.

Back home, equity-oriented mutual funds attracted Rs 5,215 crore in October, making it the eighth consecutive monthly net infusion. However, the quantum of net inflows dropped from September, when it attracted Rs 8,677 crore. On the sectoral front, automobile sector remained in focus, as Union minister Nitin Gadkari said the government is working on measures to increase the sales of electric vehicles and in the next two years the cost of EVs in India will drop to the level of petrol vehicles. Further, Gadkari said that to reduce import of fossil fuel, the government is encouraging use of alternate fuel like ethanol, CNG. Sugar stocks remained in focus as trade body AISTA said sugar mills have exported 2.76 lakh tonnes of sugar in the last 40 days of the current marketing year with maximum shipments to the UAE.

Finally, the BSE Sensex declined 433.13 points or 0.72% to 59,919.69 and the CNX Nifty was down by 143.60 points or 0.80% to 17,873.60.           

The BSE Sensex touched high and low of 60,293.25 and 59,656.26, respectively and there were 6 stocks advancing against 24 stocks declining on the index.   

The broader indices ended in red; the BSE Mid cap index fell 0.64%, while Small cap index was down by 0.54%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.68%, Metal up by 0.31%, Power up by 0.31% and Utilities up by 0.18%, while Realty down by 2.51%, PSU down by 1.56%, Healthcare down by 1.24%, Bankex down by 1.19%, Telecom down by 1.09% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.79%, Mahindra & Mahindra up by 0.57%, Reliance Industries up by 0.22%, TCS up by 0.11% and Indusind Bank up by 0.08%. On the flip side, SBI down by 2.83%, Bajaj Finserv down by 2.42%, Tech Mahindra down by 2.26%, Sun Pharma down by 2.00% and Bajaj Finance down by 1.68% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das exuded confidence in the economy clipping at the projected 9.5 per cent growth this fiscal and said that growth impulses and the fast-moving economic indicators are strong. Crediting the many measures taken by the government and the RBI for the faster-than-expected recovery so far, Das said the fiscal and taxation reforms especially have played key role in driving growth and reviving confidence. These measures will continue drive growth going forward.

But as the monetary measures have almost reached its limits, going forward the government has to be in the forefront to drive faster growth and the central bank can continue to support to revive the economy ravaged by the pandemic. Citing the slew of measures the government has taken since the pandemic struck in March 2020, the governor specifically mentioned tax cuts on fuels, tax resolution for the telecom sector, annulling of the retro tax legislation, sale of Air India, plans to sell some of the public sector banks and PLI scheme as the major reforms and growth-drivers bearing fruits now.

He said ‘Though soaring global crude prices and many geopolitical issues along with other global headwinds are challenges to growth, the overall growth outlook is very positive for us. I am very confident that our GDP will comfortably grow by 9.5 per cent this fiscal because all growth impulses are very strong, and the fast-moving indicators are stronger.’ He added ‘Our assessment is that we are on a path of reaching the 9.5 per cent growth comfortably’. But, he noted that there are global headwinds as advanced economies, which have recovered faster from the pandemic and had posted higher growth numbers earlier, seem to have moderated now.

The CNX Nifty traded in a range of 17798.20 and 17971.35 and there were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 1.75%, Hindalco up by 0.93%, JSW Steel up by 0.75%, Mahindra & Mahindra up by 0.55% and Reliance Industries up by 0.18%. On the flip side, Indian Oil Corporation down by 4.41%, Tech Mahindra down by 2.85%, SBI down by 2.82%, ONGC down by 2.66% and SBI Life Insurance down by 2.58% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 29.66 points or 0.40% to 7,369.81, France’s CAC gained 14.90 points or 0.21% to 7,060.06 and Germany’s DAX was up by 16.96 points or 0.11% to 16,084.79.

Asian markets ended mostly higher on Thursday despite weakness in Wall Street overnight after data showed US consumer prices grew at the fastest pace since 1990 that fuelled concerns about faster monetary policy tightening by the US Federal Reserve. Chinese shares gained as property shares rebounded after reports suggesting the government will take steps to ease the cash crunch for embattled developers. Market sentiments also improved after reports that China’s new bank lending in October exceeded market estimates. Japanese shares rose as investors shrugged off data showing that the country's wholesale inflation hit a four-decade high in October. Meanwhile, investors are eyeing stimulus package from newly elected Prime Minister Fumio Kishida.

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