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Benchmarks continue to trade lower in morning deals
Oct-31-2024

Indian equity benchmarks continued to trade lower in morning deals, tracking weak global markets. Traders remained cautious as data showed the growth in production of eight key infrastructure sectors slowed down to 2 per cent in September as against 9.5 per cent in the same month last year. However, the output growth is positive against a contraction of 1.6 per cent in August. Ongoing foreign fund outflows and lackluster corporate earnings contributed to a decline in market sentiment. Meanwhile, the government data showed the Centre’s fiscal deficit at the end of the first half of financial year FY25 touched 29.4 per cent of the full-year target. In absolute terms, fiscal deficit - the gap between government’s expenditure and revenue - was at Rs 4,74,520 crore at September-end. On the global front, Asian markets are trading mixed as lingering uncertainty around U.S. presidential elections slated to be held on November 5 may keep investors on their toes on the last day of Samvat 2080.  

The BSE Sensex is currently trading at 79644.84, down by 297.34 points or 0.37% after trading in a range of 79583.69 and 80044.95. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.32%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.06%, Industrials up by 1.67%, Healthcare up by 1.08%, Utilities up by 0.85% and Power up by 0.51%, while IT down by 2.63%, TECK down by 2.21%, Consumer Durables down by 0.92%, FMCG down by 0.68% and Realty down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 6.18%, Power Grid Corporation up by 1.00%, Sun Pharma up by 0.65%, Indusind Bank up by 0.38% and Tata Steel up by 0.30%. On the flip side, Tech Mahindra down by 4.44%, HCL Technologies down by 3.50%, TCS down by 2.61%, Infosys down by 2.43% and Mahindra & Mahindra down by 1.13% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) has said that it projects a decline in inflation for FY25, yet it emphasizes that immediate rate cuts from the Reserve Bank of India (RBI) are unlikely. According to Ind-Ra, the persistent pressure of elevated food prices continues to drive inflation, suggesting that any potential reduction in interest rates will hinge on evidence of stable inflation trends nearing the RBI’s target of 4 percent. As such, market participants may need to brace for a prolonged period without rate cuts in the near future.

While inflation and weak industrial activity weigh on the economy, there are positive signs in rural demand, driven by improved real wages for rural labourers in July and August 2024, and above-normal rainfall in most of the country. These factors are expected to boost consumption demand. Devendra Kumar Pant, Chief Economist at Ind-Ra, said 'The slow growth of net taxes in 1QFY25 coupled with sticky inflation is a major challenge being faced by the Indian Economy in FY25. Rising real wages have the ability to increase consumption demand led economic growth. The situation is still evolving, and festive sales is a key monitorable for a growth revision in FY25.’

Above-normal monsoon rainfall in 2024 has improved water reservoir levels, which could boost agriculture. However, weak industrial growth and declining net taxes-reaching a 16-quarter low-continue to weigh on the economy. Actions by major economies also impact India’s outlook. The US Federal Reserve’s interest rate cuts and China’s economic stimulus provide some relief, though tensions in West Asia could add uncertainty.

The CNX Nifty is currently trading at 24263.10, down by 77.75 points or 0.32% after trading in a range of 24234.30 and 24372.45. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Cipla up by 7.86%, Larsen & Toubro up by 6.16%, Hero MotoCorp up by 1.55%, ONGC up by 1.26% and Power Grid Corporation up by 1.04%. On the flip side, Tech Mahindra down by 4.49%, HCL Technologies down by 3.42%, TCS down by 2.57%, Infosys down by 2.46% and Wipro down by 1.94% were the top losers.

Asian markets are trading mixed; Jakarta Composite gained 20.32 points or 0.27% to 7,590.17, Shanghai Composite strengthened 11.8 points or 0.36% to 3,278.04 and Hang Seng advanced 95.78 points or 0.47% to 20,476.42.

On the flip side, Nikkei 225 slipped 339.67 points or 0.86% to 38,937.72 and KOSPI dropped 23.04 points or 0.89% to 2,570.75.
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