On Tuesday, Indian benchmark indices BSE Sensex and Nifty 50 opened higher, buoyed by positive movement in Wall Street.
At the start of trading, the BSE Sensex was recorded at 84,429.72, up 129.94 points, or 0.15 percent. Meanwhile, the Nifty 50 was at 25,857.30, gaining 46.45 points, or 0.18 percent.
This positive opening comes after a challenging day on Monday when both indices ended significantly lower, each dropping over 1 percent due to extensive profit booking across various sectors. The BSE Sensex closed down by 1,272.07 points, or 1.49 percent, finishing at 84,299.78. The Nifty 50 also saw a decline of 368.10 points, or 1.41 percent, closing at 25,810.85. The broader market followed suit, with the Nifty Midcap 100 and Nifty Smallcap 100 indices falling by 0.38 percent and 0.32 percent, respectively.
Investor sentiment was further impacted as the fear index, India VIX, surged by 6.89 percent, closing at 12.79. The auto sector was particularly hard hit, with the Nifty Auto index dropping by 2 percent. Other sectors, including Bank Nifty, Financial Services, PSU Bank, Private Bank, and Realty, all experienced declines exceeding 1 percent. However, the Media and Metal indices bucked the trend, recording gains of 1.33 percent and 1.12 percent, respectively.
In addition to the market fluctuations, new transaction charges implemented by the NSE and BSE took effect today, October 1, following a directive from the Securities and Exchange Board of India (Sebi) to eliminate the slab-wise charge structure for market infrastructure institutions (MIIs). For equity options, the NSE will charge Rs 3,503 per crore of premium value for each side of a transaction, while the BSE will adjust its charges for Sensex and Bankex options contracts to Rs 3,250 per crore of premium turnover.
Additionally, Finance Minister Nirmala Sitharaman announced an increase in the Securities Transaction Tax (STT) for futures and options trading, effective today. The STT for futures trading will rise to 0.02 percent, up from 0.0125 percent, while options trading will increase to 0.1 percent.
As for the Asia-Pacific markets, they presented a mixed picture on Tuesday following comments from Federal Reserve Chair Jerome Powell, who indicated that future rate cuts may not be as aggressive as previously anticipated. Many Asian markets, including South Korea, Hong Kong, and mainland China, were closed for public holidays, while Chinese markets will remain shut for the rest of the week due to Golden Week celebrations.
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Japan’s Nikkei 225 index rebounded sharply, gaining 1.73 percent after a substantial decline of 4.8 percent on Monday. The Topix index also rose by 1.43 percent. Meanwhile, Australia’s S&P/ASX 200 fell by 0.47 percent, pulling back from a recent all-time high.
In Japan, traders focused on the Bank of Japan’s third-quarter Tankan survey, which assesses business sentiment among large companies. The survey revealed that sentiment among large manufacturers remained stable at +13, in line with forecasts, while non-manufacturers saw a slight uptick to +34 from +33, exceeding expectations of +32. A positive reading indicates that optimists outnumber pessimists. Additionally, Japan reported a drop in its unemployment rate for August to 2.5 percent, down from 2.7 percent in July and better than the anticipated 2.6 percent.
Globally, MSCI’s equity index fell on Monday, and the dollar strengthened after Powell’s comments tempered expectations for significant rate cuts. Oil futures ended relatively flat following a volatile session amid escalating concerns about conflict in the Middle East.
Brent crude experienced its largest monthly loss since November 2022, plummeting 17 percent in the third quarter as fears of declining global demand overshadowed worries about supply disruptions due to conflict.
Stock trading was marked by volatility following Powell’s remarks, which indicated that the central bank is not in a rush to cut rates. While some investors had anticipated more substantial easing, Powell signaled that the Fed is likely to implement two 25-basis-point cuts this year if economic conditions evolve as expected.
Last week, Wall Street indexes experienced a rally, driven by a favorable reading on core US inflation that increased speculation for a rate cut. However, by Monday, the probability of a 50-basis-point cut in November fell to 36.7 percent, down from 53.3 percent earlier.
Despite the fluctuations, the S&P 500 and the Dow managed to register record closing highs at the end of the quarter, with many traders making last-minute portfolio adjustments. The Dow Jones Industrial Average rose 0.04 percent to close at 42,330.15, the S&P 500 gained 0.42 percent to finish at 5,762.48, and the Nasdaq Composite increased by 0.38 percent to reach 18,189.17. For the month, the S&P 500 saw a gain of 2.01 percent’
