Sensex Today: Benchmark equity indices, BSE Sensex and NSE Nifty 50, ended the week’s first trading session in negative territory with a fall of over 1 per cent each, led by massive profit booking across counters.
The 30-share Sensex shed 1272.07 points or 1.49 per cent to settle at 84,299.78. The index hit an intra-day low of 84,257.14.
The broader Nifty 50 also ended down 368.10 points or 1.41 per cent at 25,810.85 on Monday.
Market View by Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Market is likely to move into a consolidation phase in the near-term. One significant factor that is influencing foreign portfolios is the outperformance of the Chinese stocks which is reflected in the massive surge in the Hang Seng index by around 18 % in September. This surge has been triggered by hopes of revival in the Chinese economy in response to the monetary and fiscal stimulus announced by the Chinese authorities.
Global Cues
Asia share markets were mostly firmer on Monday as China announced more stimulus measures, though the Nikkei dived on concerns Japan’s new prime minister favoured normalising interest rates.
Chinese stocks have surged for the ninth consecutive day, driven by government stimulus measures. The CSI 300 Index saw its biggest jump since 2008, rising 8.5%. This rally follows policy changes including relaxed homebuyer rules and lower mortgage rates, boosting investor confidence in one of the world’s most beaten-down markets.
Continued Israeli strikes across Lebanon added geopolitical uncertainty to the mix, though oil prices were still weighed down by the risk of increased supply.
The week is packed with major US economic data including a payrolls report that could decide whether the Federal Reserve delivers another outsized rate cut in November.
The Nikkei led the early action with a dive of 4.0 per cent as investors anxiously waited for more direction from new Prime Minister Shigeru Ishiba, who has been critical of the Bank of Japan’s easy policies in the past.
However, he sounded more conciliatory over the weekend saying monetary policy “must remain accommodative” given the state of the economy.
That helped the dollar bounce 0.5 per cent to 142.85 yen, after sliding 1.8 per cent on Friday from a 146.49 top.
Over in China, the central bank said it would tell banks to lower mortgage rates for existing home loans by the end of October, likely by 50 basis points on average.
That follows a barrage of monetary, fiscal and liquidity support measures announced last week in Beijing’s biggest stimulus package since the pandemic.
In the previous week, the blue-chip CSI300 and Shanghai Composite indices gained roughly 16 per cent and 13 per cent, respectively, while Hong Kong’s Hang Seng index jumped 13 per cent.
week to a seven-month high.
Wall Street also had a rousing week helped by a benign reading on core US inflation on Friday that left the door open to another half-point rate cut from the Fed.
Futures imply around a 53 per cent chance the Fed will ease by 50 basis points on November 7, though the presidential election two days earlier remains a major unknown.
A host of Fed speakers will have their say this week, led by Chair Jerome Powell later on Monday. Also due are data on job openings and private hiring, along with ISM surveys on manufacturing and services.
S&P 500 futures were up 0.1 per cent on Monday, while Nasdaq futures added 0.2 per cent. The S&P 500 index is up 20 per cent year-to-date and on track for its strongest January-September performance since 1997.
