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EQUITY
Markets end lower for second straight day
Oct-04-2023

Extending their previous day's fall, Indian equity benchmarks ended lower by around half a percent on Wednesday due to weak trends in the US and Asian markets.  After the gap-down start, markets further drifted lower in the first half as 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 also 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. Traders remained cautious as 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. 

Weak trade continued over the Dalal Street in afternoon deals, as sentiments remained down-beat after Crisil Ratings indicated that while rating upgrades continue to outnumber the downgrades substantially due to robust domestic demand and government capital expenditure from April to September 2023, sluggish exports are beginning to add pressures to the credit quality of some Indian firms. It also said export-oriented sectors such as textiles (cotton spinning) and diamond polishing might experience a contraction in operating cash flows. However, key indices managed to trim some losses in late afternoon deals, as traders took some support with 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.

On the global front, European markets were trading in green despite report stating that private sector activity in the euro area contracted again at the end of the third quarter, with the corresponding PMI coming in at a final 47.2 in September, up from a preliminary estimate of 47.1 and up from August's 3-year low of 46.7. The services PMI improved to 48.7 versus 48.4 preliminary. Asian markets settled down on Wednesday as signs of a strong U.S. job market added to fears that high interest rates could weigh on global growth.

Finally, the BSE Sensex fell 286.06 points or 0.44% to 65,226.04 and the CNX Nifty was down by 92.65 points or 0.47% to 19,436.10.     

The BSE Sensex touched high and low of 65,332.52 and 64,878.77, respectively. There were 8 stocks advancing against 22 stocks declining on the index.

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

The few gaining sectoral indices on the BSE were IT up by 0.32%, TECK up by 0.21%, FMCG 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 down by 1.47% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 2.91%, HDFC Bank up by 1.52%, Hindustan Unilever up by 1.51%, Infosys up by 0.81% and TCS up by 0.61%. On the flip side, Axis Bank down by 4.38%, SBI down by 2.82%, NTPC down by 2.55%, Indusind Bank down by 2.38% and Ultratech Cement down by 2.22% were the top losers.

Meanwhile, Engineering Exports Promotion Council (EEPC) has said 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 exporters' body said engineering exports to Russia surged 178 per cent to $568.41 million during April to August of fiscal 2023-24, which was $204.17 million in the corresponding previous period. It also said that some of the major trading partners like the US and European countries have been affected by the global slowdown. The Russia-Ukraine conflict has also been ongoing, while China is also experiencing a slowdown. All these factors have affected India's engineering export demand. Engineering exports to the US fell 14 per cent year-on-year during April to August 2023.

EEPC is also of the view that India should sign free trade agreements (FTAs) with non-traditional markets like Latin America and Africa to boost engineering exports. The FTAs with UAE and Australia have provided a fillip to engineering exports with shipments to both nations rising nine per cent during April to August of the current financial year. Engineering exports to the UAE during April to August of the current fiscal touched $2.24 billion, while that for Australia touched $ 596.14 million.

The CNX Nifty traded in a range of 19,457.80 and 19,333.60. There were 11 stocks advancing against 37 stocks declining, while 2 stocks remain unchanged on the index.

The top gainers on Nifty were Adani Enterprises up by 3.23%, Nestle up by 3.03%, Eicher Motors up by 1.63%, Hindustan Unilever up by 1.61% and HDFC Bank up by 1.59%. On the flip side, Axis Bank down by 4.72%, SBI down by 2.94%, NTPC down by 2.38%, Indusind Bank down by 2.33% and Bajaj Auto down by 2.20% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 10.17 points or 0.14% to 7,480.33, France’s CAC rose 29.13 points or 0.42% to 7,026.18 and Germany’s DAX gained 28.37 points or 0.19% to 15,113.58.

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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