Post Session: Quick Review

Indian equity benchmarks finished volatile day of trade on flat note, as investors awaited the outcome of a key meeting of the RBI's Monetary Policy Committee due this week. Markets made positive start, as traders took support with Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that the Indian economy is showing resilience and on the path to recovery. He added that private demand and the services sector are doing better than expected. Soon markets turned volatile, as some cautiousness came with Finance minister Nirmala Sitharaman’s statement that ‘some people do also speak that a falling rupee also helps exports. Whether it does or doesn’t, theoretically it may, but in today’s condition, with recession outside and demand not really as adequately as it should be, even a fall in the rupee may or may not help our exports. We are conscious about these basic facts’.

In afternoon trade, key indices maintained their gains above neutral line. Traders took some solace after Organisation for Economic Cooperation and Development (OECD) in its latest Interim Economic Outlook has retained the India’s Gross Domestic Product (GDP) growth projection at 6.9 per cent for the current financial year (FY23) despite the global economy losing momentum in wake of the Russia-Ukraine war. However, in last leg of trade, markets were oscillating between gains and losses, as global growth concerns remained on investors' minds. Traders took note of report that government will extend again the validity of the current foreign trade policy (FTP), which provides a road map for boosting external commerce in goods and services, by six months through March 31, 2023.

On the global front, European markets were trading mostly in green as investor sentiment showed signs of tentative recovery following a sharp sell-off in US and Asian equities. Back home, cement stocks remained in limelight after rating agency Crisil in its latest report has said that the operating profitability of cement companies is set to fall by 15 per cent year-on-year to Rs 900-925 per tonne this fiscal (FY23), adding to the pain of a 9 per cent decline last fiscal, as an increase in realisations will not be enough to offset the increase in prices of coal, petcoke and diesel that has pushed the average cost of production higher.

The BSE Sensex ended at 57,107.52, down by 37.70 points or 0.07% after trading in a range of 56,950.52 and 57,704.57. There were 18 stocks advancing against 12 stocks declining on the index (provisional).

The broader indices ended in green; the BSE Mid cap index gained 0.01%, while Small cap index was up by 0.49% (provisional).

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.24%, Energy up by 0.91%, TECK up by 0.75%, Telecom up by 0.73% and Healthcare was up by 0.69%, while Metal down by 0.83%, Bankex down by 0.78%, Capital Goods down by 0.71%, Utilities down by 0.59% and Power was down by 0.58% were the top losing indices on BSE (provisional).

The top gainers on the Sensex were Indusind Bank up by 2.18%, Power Grid up by 2.01%, HCL Tech up by 1.44%, Infosys up by 1.38% and Dr. Reddy's Lab up by 1.29%. On the flip side, Tata Steel down by 1.85%, Titan Company down by 1.79%, Kotak Mahindra Bank down by 1.10%, SBI down by 0.97% and HDFC down by 0.79% were the top losers (provisional).

Meanwhile, Chief Economic Advisor (CEA) V Anantha Nageswaran has said the Indian economy is on the path to recovery but cautioned that foreign investors may remain cautious because of geopolitical challenges. Nageswaran said all sectors of the economy such as agriculture, manufacturing and construction are doing well.

He mentioned ‘The Indian economy is showing resilience and on the path to recovery. Private demand and the services sector are doing better than expected.’ He added private capital formation is taking place, while foreign direct investment (FDI) flow is keeping steady. However, he said there are challenges, and geopolitics is messy for which foreign investors are cautious.

Further, noting that India has a well-capitalised banking sector, he said, the Insolvency and Bankruptcy Code (IBC) also played a big part in improving the health of the banking system which had high NPAs due to the financial crisis of 2008. Moreover, he said the economy is going to see good capital formation for good credit growth.

Besides, he also stated ‘Inflation in India is now at seven per cent. But we are worried about this rate which shows the country is becoming less tolerant to it (inflation).’

The CNX Nifty ended at 17,007.40, down by 8.90 points or 0.05% after trading in a range of 16,942.35 and 17,176.45. There were 27 stocks advancing against 23 stocks declining on the index (provisional).

The top gainers on Nifty were Cipla up by 3.10%, Tata Consumer up by 2.18%, Shree Cement up by 2.00%, Power Grid up by 1.99% and BPCL up by 1.89%. On the flip side, Hero MotoCorp down by 3.05%, Adani Ports down by 2.22%, Tata Steel down by 2.20%, Titan Company down by 2.08% and Kotak Mahindra Bank down by 1.62% were the top losers (provisional).

European markets were trading mostly in green, France’s CAC increased 13.03 points or 0.23% to 5,782.42 and Germany’s DAX was up by 16.24 points or 0.13% to 12,244.16. On the flip side, UK’s FTSE 100 was down by 20.19 points or 0.29% to 7,000.76.

Asian markets ended mixed on Tuesday on the back of weak cues from US markets overnight as recession fears grew along with raising concerns over efforts by central banks to curb inflation. Seoul shares gained slightly after a survey showed consumer confidence in the country strengthened in September. Chinese shares rose after the Chinese central bank, PBoC, injected about $24.7 billion of liquidity via repo market operations in a bid to maintain liquidity in the banking system. While data showing that profits at Chinese industrial firms declined further in August.

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