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Sensex, Nifty trade under pressure amid foreign fund outflows
Oct-18-2024

Indian equity benchmarks made negative start on Friday as foreign portfolio investors (FPIs) have sold nearly Rs 74,000 crore worth of shares in October, a record amount that has contributed to the bearish market sentiment. Also, rise in crude oil prices weighted on sentiments. Crude oil futures traded higher on Friday morning after official data showed decrease in inventories in the US. Domestic indices are trading lower with cut of around 0.45% each in early deals. Traders were concerned as a report by the State Bank of India (SBI) stated that India's imported inflation reached a 13-month high in September 2024, growing by 2 per cent. However, markets managed to trim some of their losses taking support with report that direct tax collections have surged 182 per cent to over Rs 19.60 trillion in 2023-24 in the 10-year period of Prime Minister Narendra Modi-led government. 

On the global front, Asian markets are trading mostly higher, following the mixed cues from Wall Street overnight, as traders remain cautious ahead of the release of a raft of economic data from China, including GDP figures. A rate cut by the European Central Bank and expectations of interest rate cuts by the US Fed and the Bank of Canada are aiding market sentiment. Besides, overall nationwide consumer prices in Japan were up 2.5 percent on year in September.

Back home, Moody's Ratings said that India has made rapid progress building its renewables capacity, but its fast-growing economy and expanding population will drive up carbon-intensive product demand. Moody's expects India to remain one of the fastest growing economies in the world with real GDP growing 7.2 per cent in 2024 and 6.6 per cent in 2025. In stock specific development, Wipro gained as it posts 21% YoY increase in Q2 net profit.

The BSE Sensex is currently trading at 80609.14, down by 397.47 points or 0.49% after trading in a range of 80409.25 and 80790.39. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.67%, while Small cap index was down by 1.11%.

The only gaining sectoral indices on the BSE were Bankex up by 0.28% and Telecom up by 0.06%, while Consumer Durables down by 1.56%, IT down by 1.24%, FMCG down by 1.19%, Oil & Gas down by 1.09% and Energy down by 1.03% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.42%, Tata Motors up by 1.14%, NTPC up by 0.40%, TCS up by 0.34% and Tata Steel up by 0.30%. On the flip side, Infosys down by 2.99%, Titan Company down by 2.79%, ITC down by 1.76%, Nestle down by 1.74% and Maruti Suzuki down by 1.18% were the top losers.

Meanwhile, S&P Global Ratings has said that India is poised to be the fastest-growing major economy over the next three years and the third largest global economy by 2030 but rising population presents mounting challenges in basic service coverage and growing investment needs to maintain productivity. It said emerging economies have high ambitions for the next decade and beyond with India aiming to become a $30 trillion economy by 2047, from the current $3.6 trillion. India is currently the fifth largest economy.

In its report titled ‘Look forward Emerging Markets: A decisive decade’, S&P said ‘the country’s 2024 entry into JP Morgan’s Government Emerging Market Bond Index could provide additional government funding and unlock significant resources in domestic capital markets. This is only a first step - investors will continue looking for improved market access and settlement procedures’. It added emerging markets will play a crucial role in shaping the global economy over the next decade, averaging 4.06 per cent GDP growth through 2035, compared to 1.59 per cent for advanced economies. By 2035, emerging markets will contribute about 65 per cent of global economic growth. This growth will be driven mainly by emerging economies in Asia-Pacific, including China, India, Vietnam and the Philippines.

It further said ‘Also by 2035, India will be cemented as the world’s third-largest economy, with Indonesia and Brazil ranking eighth and ninth, respectively’. It said India has also taken measures to improve its weak fiscal flexibility by boosting its capital expenditure, further supporting long-term growth. But population challenges are meaningful, with the country expected to have the world’s largest population by 2035. This presents mounting challenges in basic service coverage and growing investment needs to maintain productivity. Stating that India is positioned to grow its economy in the next decade, the agency said as the next decade approaches, the economic trajectory of emerging markets will likely be heavily influenced by their governments’ design and execution of long-term growth strategies.

The CNX Nifty is currently trading at 24654.70, down by 95.15 points or 0.38% after trading in a range of 24567.65 and 24694.95. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Wipro up by 4.60%, Axis Bank up by 3.63%, Eicher Motors up by 1.65%, Tata Motors up by 1.19% and HDFC Life Insurance up by 0.91%. On the flip side, Titan Company down by 2.80%, Infosys down by 2.72%, Bajaj Auto down by 1.83%, ITC down by 1.82% and BPCL down by 1.81% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted jumped 455.58 points or 1.98% to 23,509.42, Hang Seng surged 142.9 points or 0.71% to 20,222.00, Shanghai Composite strengthened 21.25 points or 0.67% to 3,190.63, Nikkei 225 rose 16.57 points or 0.04% to 38,927.76 and Straits Times added 10.08 points or 0.28% to 3,635.33. On the other hand, KOSPI fell 19.74 points or 0.76% to 2,589.56 and Jakarta Composite was down by 9.23 points or 0.12% to 7,725.81.
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