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Post Session: Quick Review
Oct-04-2023

Key benchmark indices extended their southward journey on Wednesday and ended in red ahead of Reserve Bank of India (RBI) interest rate decision, which scheduled to be released on October 06. Some cautiousness also came amid expectations that the US Fed will hold interest rates higher for longer than previously anticipated to tame the stubborn inflation. However, markets managed to trim some of their losses in last leg of trade. The broader indices, the BSE Mid cap index and Small cap index were ended deep in red. 

Markets made gap-down opening and widened their losses following overnight losses on Wall Street as well as weakness in Asian counterparts amid soaring US Treasuries. Persistent foreign fund outflows also dented domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) offloaded shares worth Rs 2,034.14 crore on October 3. Traders were concerned as the World Bank increased its retail inflation forecast for India for 2023-24 to 5.9 per cent from the 5.2 per cent estimate made in April. In afternoon session, indices traded near day’s low levels, as sentiments remained downbeat after Engineering Exports Promotion Council (EEPC) stated that overall exports of engineering goods from the country have been affected by the global slowdown. It said during April to August in 2023, overall engineering exports dropped 4.55 per cent to $44.62 billion as against $46.74 billion in the previous similar period of 2022. The street paid no heed towards the Reserve Bank of India’s (RBI) monthly data report on ‘India’s International Trade in services’ showing that India's services exports surged 8.4% year-on-year to $28,719 million in August 2023, while imports of services during August 2023 fell 0.8% to $15,103 million. However, in last leg of trade, markets cut some losses and concluded the session in red.

On the global front, European markets were trading in green after a survey showed activity in Germany's services sector edged up slightly in September, following a drop in the previous month. Asian markets ended in red as signs of a strong U.S. job market added to fears that high interest rates could weigh on global growth. Back home, a private report said that India’s monetary policy committee is widely expected to keep key rates on hold when it announces its decision on October 06 but the recent uptick in global crude oil prices and sustained economic growth are likely to keep its focus on inflation.

The BSE Sensex ended at 65,226.04, down by 286.06 points or 0.44% after trading in a range of 64,878.77 and 65,332.52. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.52%, while Small cap index was down by 0.96%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.32%, TECK up by 0.21% and FMCG was up by 0.09%, while Metal down by 1.98%, PSU down by 1.87%, Realty down by 1.83%, Power down by 1.53% and Healthcare was down by 1.47% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Nestle up by 2.79%, Hindustan Unilever up by 1.53%, HDFC Bank up by 1.53%, TCS up by 0.61% and Infosys up by 0.45%. On the flip side, Axis Bank down by 4.66%, SBI down by 2.93%, Indusind Bank down by 2.34%, NTPC down by 2.34% and Ultratech Cement down by 2.12% were the top losers. (Provisional)

Meanwhile, with the help of good investment and domestic demand, the World Bank in its latest ‘India Development Update’ report has said that the Indian economy, which accounts for the bulk of South Asia region, is projected to grow at 6.3 per cent in FY2023-24 and 6.4 per cent in FY2024-25. It added India continues to show resilience against the backdrop of a challenging global environment. On inflation front, it is expected to decrease gradually as food prices normalize and government measures help increase the supply of key commodities.

The World Bank said South Asia is expected to grow 5.8 per cent this year - higher than any other developing country region in the world, but slower than its pre-pandemic pace and not fast enough to meet its development goals. Relative to the spring forecast, growth in 2023 has been upgraded by 0.2 percentage points due to stronger-than-expected data in India.

Although India’s post-pandemic economic rebound is now fading, it said growth is expected to remain stronger than in other large emerging market and developing economies (EMDEs). The report said ‘the dampening effect of monetary policy tightening on domestic demand, particularly investment, will likely peak in the coming year. The effects of slowing global demand and rising interest rates will be mitigated by India’s low external debt and the healthy balance sheets of its financial and corporate sectors’.

Growth of merchandise exports is expected to slow as a result of weak foreign demand growth, although this will be offset by robust services exports.The World Bank said, in India, robust output growth in the first half of 2023 was supported by a strong expansion of investment and, on a sectoral level, continued strength of services. Government infrastructure projects have supported momentum in the construction sector, which has grown at year-over-year rates of around 10 per cent in recent quarters.

The CNX Nifty ended at 19,436.10, down by 92.65 points or 0.47% after trading in a range of 19,333.60 and 19,457.80. There were 10 stocks advancing against 39 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were Adani Enterprises up by 3.25%, Nestle up by 3.01%, Hindustan Unilever up by 1.58%, Eicher Motors up by 1.48% and HDFC Bank up by 1.43%. On the flip side, Axis Bank down by 4.37%, SBI down by 2.77%, NTPC down by 2.51%, Indusind Bank down by 2.38% and Ultratech Cement down by 2.22% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 16.30 points or 0.22% to 7,486.32, France’s CAC was up by 30.14 points or 0.43% to 7,027.19 and Germany’s DAX was up by 27.21 points or 0.18% to 15,109.60.

Asian markets settled down on Wednesday as signs of a strong US jobs market fuelled expectations of higher for longer interest rates from the US Federal reserve. The Labor Department said that American employers posted 9.6 million job openings in August, up from 8.92 million in July, and against expectations of 8.8 million vacancies. Hong Kong shares declined on lingering concerns over an investigation into China Evergrande Group's founder and the heavily indebted property developer's offshore debt restructuring plan. Japanese shares dropped as the yen gained against the US dollar, putting more pressure on exporters in the world`s third-largest economy. Meanwhile, Chinese markets were remained closed for holiday. 

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

--

--

--

Hang Seng

17,195.84

-135.38

-0.79

Jakarta Composite

6,886.58

-54.31

-0.79

KLSE Composite

1,415.84

-4.17

-0.29

Nikkei 225

30,526.88

-711.06

-2.33

Straits Times

3,147.39

-44.96

-1.43

KOSPI Composite

2,405.69

-59.38

-2.47

Taiwan Weighted

16,273.38

-180.96

-1.11
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