DOMESTIC BAROMETERS HIT FRESH INTRADAY LOW AS BROADER MARKET OUTPERFORMS; PSU BANKS IN DEMAND

The key equity barometers extended losses and hit fresh intraday low in in morning trade. The Nifty traded tad above the 19,500 level as selling pressure on the domestic bourses intensified. PSU banks managed to outperform, rising for second day in a row.

At 10:23 IST, the barometer index, the S&P BSE Sensex, was down 392.20 points or 0.60% to 65,436.21. The Nifty 50 index lost 130.35 points or 0.66% to 19,507.95.

In the broader market, the S&P BSE Mid-Cap index fell 0.02% while the S&P BSE Small-Cap index added 0.40%.

The tug of war among bears and bulls continued as the market breadth remained almost even. On the BSE, 1,716 shares rose and 1,711 shares fell. A total of 208 shares were unchanged.

Investor sentiment took a hit after top Federal Reserve officials, including Fed Governor Michelle Bowman, Vice Chair Michael Barr, Fed Chair Jerome Powell, and New York Fed Chief John Williams, have indicated their willingness to support an increase in the federal funds rate if economic data suggests a sluggish approach towards the central bank`s 2% inflation target.

Despite considerable progress, these officials agreed that inflation remains elevated, hinting at the possibility of further rate increases. The current policy rate stands between 5.25% and 5.50%.

They also underscored the need for a restrictive monetary policy over an extended period to achieve their objectives.

Economy:

The gross GST revenue for September rose 2.2 per cent to Rs 1,62,712 crore from Rs 1,59,069 crore in August. Out of the Rs 1,62,712 crore GST collections for September, CGST was Rs 29,818 crore, SGST was Rs 37,657 crore, IGST was Rs 83,623 crore (including Rs 41,145 crore collected on import of goods) and cess was Rs 11,613 crore (including Rs 881 crore collected on import of goods).

It is for the fourth time that the gross GST collection has crossed Rs 1.60 lakh crore mark in 2023-24.

The gross GST collection for the first half of 2023-24 ending September (Rs 9,92,508 crore) is 11 per cent higher than the gross GST collection in the first half of 2022-23 (Rs 8,93,334 crore).

The Reserve Bank of India`s (RBI`s) six-member Monetary Policy Committee (MPC) will meet from Wednesday to Friday this week. The decision of the MPC will be announced by Das on Friday.

As per media reports, there could be divergence within the RBI`s MPC as to the stance of the monetary policy, though unanimity on not changing the repo rate from the current 6.5 per cent is expected to be maintained.

In the previous MPC meeting held from August 8-10, the members unanimously decided to retain the repo rate at 6.5 per cent, while there was on divergent view on the withdrawal of accommodation stance.

Buzzing Index:

The Nifty PSU Bank rose 0.24% to 5,270.85. The index has added 1.88% in two sessions.

Union Bank of India (up 2.12%), Indian Bank (up 1.56%), Bank of India (up 0.87%), Punjab & Sind Bank (up 0.75%) and Punjab National Bank (up 0.56%) were the top gainers.

Among the other gainers were Canara Bank (up 0.44%), Bank of Maharashtra (up 0.42%), UCO Bank (up 0.34%), Indian Overseas Bank (up 0.32%) and Bank of Baroda (up 0.05%).

On the other hand, State Bank of India (down 0.86%), Central Bank of India (down 0.1%), moved lower.

Stocks in Spotlight:

Hero MotoCorp fell 1.96%. The manufacturer of motorcycles and scooters sold 536,499 units in September 2023. The company registered a growth of more than 3% over the corresponding month of the previous fiscal when it sold 519,980 units in September 2022.

The company on Friday announced that it will increase the ex-showroom prices of its select motorcycles and scooters, effective from 3 October 2023. The price increase will be around 1% and the exact quantum of increase will vary by specific models and markets.

Maruti Suzuki India slipped 2.56%. The company sold a total of 181,343 units in September 2023. Total sales in the month include domestic sales of 153,106 units, sales to other OEM of 5,726 units and exports of 22,511 units. Total sales were 176,306 units in September 2022.

Aurobindo Pharma declined 3.07%. The drug maker announced that the US drug regulator has issued a Form 483, with 1 observation after inspecting its manufacturing facility in Telangana.

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