Despite Global Headwinds, Indian Sectors Reflect Resilience
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, Market Moves, Market Watch
The Indian benchmark indices have gained ground so far this month after a selloff in the second half of last month due to FPIs pulling out around Rs 20,000 crore from the Indian market on the back of a sharp rise in US Treasury yields and an uncertain economic environment.
The domestic indices gained ground and investor optimism was evident across the sectoral front with all sectoral indices trading in the green
The Indian benchmark indices have gained ground so far this month after a selloff in the second half of last month due to FPIs pulling out around Rs 20,000 crore from the Indian market on the back of a sharp rise in US Treasury yields and an uncertain economic environment. Despite FIIs reporting an outflow of Rs 8,653 crore in the past two weeks, DIIs played a crucial role by extending substantial support with a sizeable inflow of Rs 9,228 crore. The BSE Sensex and Nifty 50 ended the fortnight with gains of 1.76 per cent and 1.99 per cent, respectively.
Notably, the BSE Mid-Cap index exhibited a strong performance, surging by 4.67 per cent, marking a noteworthy outperformance after an extended period. Additionally, the BSE Small-Cap index also recorded a substantial rise of 4.04 per cent. Investor optimism was apparent across various sectors, as evidenced by all sectoral indices concluding the period in positive territory. After undergoing a decline of more than 5 per cent in the last fortnight, BSE Realty made a significant rebound, emerging as the top-performing sector with gains of over 13 per cent.
The sector’s robust growth is fuelled by strong demand as real estate developers are experiencing unprecedented presales and launching new projects poised to boost presale figures. Additionally, the latest quarter witnessed new property launches surpassing the significant milestone of one lakh across the top seven cities. The oil and gas sector also stood out as one of the most gaining sectors, experiencing substantial gains of over 6 per cent. In September, the average cost of Russian oil for Indian refineries showed a decline as compared to August.
India acquired Russian oil at an average rate of approximately USD 81.7 per barrel a decrease from the August figure of about USD 86 per barrel, as reported by data on the Indian Trade Ministry’s website. Investor optimism in the IT industry has been significantly impacted following lacklustre quarterly performances by major IT companies such as Infosys, Tech Mahindra and Wipro. In response to global headwinds and reduced spending in key markets, technology companies are considering halving pay hikes. The BSE Information Technology index recorded the smallest gain at 0.5 per cent compared to other sectors.
In the FMCG sector, a majority of companies reported significant growth in profit margins but faced challenges in terms of volume growth. Consumer Secretary Rohit Kumar Singh, in a recent interview, highlighted that government intervention through measures such as export bans, stock disclosures and open market sales of pulses, rice and wheat would positively impact the sales of FMCG companies. According to a Reuters’ poll, the Consumer Price Index (CPI)-based inflation for India in October is anticipated to be in the range of 4.6 – 4.9 per cent, marking a decline from the 5 per cent recorded in September.
