Sensex gains 383 points; Nifty ends at 18,268

Equity indices ended at the day's high with strong gains on Tuesday, October 26, 2021, amid positive global cues. Sensex regained the 61,000-mark while the Nifty reclaimed the 18,200 level.

The S&P BSE Sensex gained 383.21 points or 0.63 per cent to 61,350.26. The Nifty 50 index added 143 points or 0.79 per cent to close at 18,268.40. The Nifty Bank rose 45.90 points or 0.11 per cent to end at 41,238.30.

The broader markets outperformed the markets at the BSE with the S&P BSE MidCap rising 1.75 per cent and S&P BSE SmallCap gaining 2.20 per cent.

The market breadth was strong. On the BSE, 2,227 shares rose and 1,048 shares fell. On the Nifty 50 index at the NSE, 39 shares advanced and 11 shares declined. The top five gainers on Nifty 50 were Tata Motors (up 5.90 per cent), Tata Steel (up 4.15 per cent), SBI Life (up 3.83 per cent), Titan (up 3.73 per cent) and Nestle India (up 3.31 per cent). The top five losers were IndusInd Bank (down 1.88 per cent), ICICI Bank (down 1.18 per cent), Power Grid (down 0.75 per cent), Dr Reddy's Laboratories (down 0.31 per cent) and NTPC (down 0.28 per cent).

Nomura downgrades India equities to 'neutral

Nomura has downgraded Indian domestic equities from 'overweight' to 'neutral citing unfavourable risk-reward. The global brokerage is recommending reallocating funds to China and other ASEAN countries, which have underperformed India so far in 2021. In its commentary, Nomura highlighted that 77 per cent of domestic stocks in the MSCI index are trading higher than the pre-pandemic or post-2018 average valuations. It said, India's valuation looks very stretched.

In February this year, Nomura had upgraded India to overweight, citing local factors such as fiscal activism and declining COVID-19 cases.

Economy

Finance Minister Nirmala Sitharaman chaired review meetings with the Ministry of Civil Aviation and Department of Telecommunications in New Delhi yesterday to give a fillip to capital expenditure CAPEX and infrastructure progress in the country. The finance minister emphasised that there must be an accelerated phase of infrastructure development and Ministries must continuously make concerted efforts to ensure that project implementation is fast-tracked.

South Korea's economy grew at a slower pace in the third quarter, as robust exports were offset by weak domestic demand and construction and facility investments, data from the Bank of Korea showed on Tuesday. GDP grew a seasonally adjusted 0.3 per cent in the September quarter from three months earlier, slowing from 0.8 per cent growth in the preceding quarter.

European Central Bank (ECB) officials have some convincing to do about their commitment to rock-bottom interest rates, at a time when investors are growing sceptical. Financial markets have stubbornly ignored recent warnings from policymakers including Chief Economist Philip Lane that they are wrong to anticipate a rate hike at the end of next year. The task of persuading people otherwise will fall to President Christine Lagarde as she presents the Governing Council's latest decision on Thursday. With inflation spiking, stoked by supply bottlenecks and rising energy, investors are betting that global momentum for withdrawal of monetary stimulus as espoused by the Federal Reserve will soon enough pull the ECB in its wake. That notion has been fed further by a public debate among officials wondering how to transition from emergency bond purchases.