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Indian Equity Markets Extend Losses for Second Consecutive Day Amid Global Weakness

Strategic Insights

— 2 min read

The Indian equity markets experienced a gloomy start to the week, with the Sensex and Nifty settling below the psychological 58,000 and 17,250 levels, respectively. The markets made a gap-down opening, tracking the weakness in global markets, as investors became apprehensive about the Reserve Bank of India's (RBI) weekly statistical supplement, which showed a decline in foreign exchange reserves to $532.66 billion, their lowest level since July 2020. However, in the afternoon trade, key indices managed to recover some losses, as traders found solace in the Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal's statement that India will potentially emerge as the strongest major economy with a 7% growth rate in FY23. Despite this, the markets failed to regain their footing and ended the day's trade below the neutral line.

Key Takeaways:

  • The Indian equity markets have been experiencing a downturn for the second consecutive day, with the Sensex and Nifty settling below their psychological levels.
  • The markets made a gap-down opening, tracking the weakness in global markets, as investors became apprehensive about the RBI's weekly statistical supplement.
  • Traders found solace in EAC-PM member Sanjeev Sanyal's statement that India will potentially emerge as the strongest major economy with a 7% growth rate in FY23.
  • However, the markets failed to regain their footing and ended the day's trade below the neutral line.
  • Private reports project a sharp moderation in India's growth rate for FY24 to 5.2 percent, compared to FY23.
  • The Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal emphasized that India can grow at 9 percent in an external conducive environment like in 2002-03 to 2006-07.
  • The member noted that the cumulative impact of supply-side reforms over many years by the Modi government has meant that India's economy is currently much more flexible and resilient than it used to be.
  • However, Sanjeev Sanyal cautioned against pushing growth unnecessarily "when the highway has so many bumps and hurdles in the way."

Statistics:

  • The Sensex ended at 57,991.11, down by 200.18 points or 0.34% after trading in a range of 57,365.68 and 58,125.01.
  • The CNX Nifty ended at 17,241.00, down by 73.65 points or 0.43% after trading in a range of 17,064.70 and 17,280.15.
  • The top gainers on the Sensex were Axis Bank up by 3.00%, TCS up by 1.96%, Wipro up by 1.20%, Tech Mahindra up by 0.80%, and HCL Tech up by 0.79%.
  • The top losers on the Sensex were Asian Paints down by 1.91%, ITC down by 1.78%, Titan Company down by 1.68%, Reliance Industries down by 1.04%, and HDFC down by 1.02%.
  • European markets were trading mostly in red, with UK's FTSE 100 decreasing by 35.71 points or 0.51% to 6,955.38 and France's CAC down by 32.36 points or 0.55% to 5,834.58.
  • Asian markets settled lower on Monday, weighed down by weakness in Wall Street last Friday after the report showed US non-farm payroll employment jumped by 263,000 jobs in September.

Sources:

  • "Markets extend losses for second consecutive day" by Accord Fintech Pvt. Ltd., distributed by Contify.com on September 30, 2022
  • "India's foreign exchange reserves fall to $532.66 billion in the week through Sept. 30" by Reserve Bank of India's (RBI) weekly statistical supplement on September 30, 2022
  • "Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal's statement" on September 30, 2022

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