The week's losses wiped out investor wealth worth Rs 18.43 trillion, with the total market capitalisation of BSE-listed firms now at Rs 441 trillion.
A host of macroeconomic data announcements, the last batch of September quarter earnings, global trends, and trading activity of foreign investors will be the major driving factors for the equity market this week, according to analysts. Equity markets would remain closed on Friday for Guru Nanak Jayanti. "India is set to release CPI and IIP data on November 12, with WPI data expected on November 14.
In dollar terms, the Indian markets managed to climb back to 2008 levels only in January this year. The subsequent fall in the rupee because of emerging market woes has once again pushed the markets below their 2008 level in dollar terms.
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The HSBC Emerging Markets Index, a monthly indicator derived from the PMI surveys, continued its upward trajectory in November on the back of faster manufacturing growth.
After a brutal selloff since October, foreign portfolio investor (FPI) flows for the year-to-date (YTD) in 2024 have turned negative. In early September, YTD FPI investments peaked at a record Rs 22,000 crore ($2.6 billion). This wave of selling has also pulled down benchmark indices, with the Nifty's YTD returns declining to 11 per cent from their high of 21 per cent in September.
The US Federal Reserve's interest rate decision is the biggest event that would drive sentiments in the domestic stock market this week, besides a host of macroeconomic data from the global front and trading activity of foreign investors, analysts said. The Indian equity market had an exceptional last week, with both the Nifty and Sensex hitting their all-time high levels on Thursday.
Foreign investors have injected close to Rs 33,700 crore in domestic equities in this month so far primarily due to interest rate cut in the US and resilience of the Indian market. This also marks the second highest inflow in a month in this year so far, the last one being in March, when Foreign Portfolio Investors (FPIs) infused Rs 35,100 crore, data with the depositories showed. Going ahead, the trend of FPIs buying is likely to continue in the coming days, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
Mark Mobius doesn't see any crisis brewing in emerging markets.
The HSBC Emerging Markets Index, a monthly indicator derived from the PMI surveys stood at 52.6 in March, little unchanged from the February reading when it stood at 52.4, indicating a subdued rate of economic growth in global emerging markets.
The impact of the US Federal Reserve's move to cut the benchmark interest rate will be muted for India as it was mostly priced in, Chief Economic Advisor V Anantha Nageswaran said on Thursday. He said that the Indian stock market is already attracting investor interest and overall the rate cut is positive for emerging markets.
Equity returns may not be exceptional for the next two years, says Heather Brilliant, chief executive officer, Morningstar Australasia.
'Geopolitics will be the most important driver of financial markets in 2025.'
According to global financial service provider Merrill Lynch's survey of fund managers for November, investors have remained heavily overweight on the emerging market equities and continue to favour the global technology, energy, materials and industrial sectors.
Private equity (PE) activity in India between January and November 2024 recorded a total value of $30.89 billion across 1,022 deals, a 22.7 per cent increase in value and an 18.4 per cent rise in deal count compared to $25.17 billion across 863 deals during the same period in 2023. Notable large deals during the period include Walton Street India Investment Advisors at $1.5 billion, and KiranaKart Technologies at $1.35 billion.
Company plans to tap 75 per cent of revenues from emerging markets, from the current 53 per cent.
Emerging market equities have delivered stellar returns over the last few years, outperforming their developed market peers since this new bull market began in end 2002.
The Indian rupee is likely to depreciate further against the US dollar through the end of 2024. This is due to the continued strengthening of the greenback, combined with the weakening of the Chinese yuan, which is expected to keep pressure on the Indian currency.
Foreign investors turned net sellers in October, withdrawing shares worth Rs 58,711 crore in the month so far owing to escalating conflict between Israel and Iran, a sharp rise in crude oil prices, and the strong performance of the Chinese market. The outflow came following a nine-month high investment of Rs 57,724 crore in September. Since June, Foreign Portfolio Investors (FPIs) have consistently bought equities, after withdrawing Rs 34,252 crore in April-May.
Foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities.
India's GDP growth is likely to moderate from 8.2 per cent in 2023 to 7 per cent in 2024 and 6.5 per cent in 2025 because the pent-up demand accumulated during Covid has exhausted, as the economy reconnects with its potential, the International Monetary Fund (IMF) said on Tuesday. About the global economy, the IMF said the battle against inflation has largely been won, even though price pressures persist in some countries.
Weakness of dollar in the overseas market also boosted the rupee value against the dollar.
iPhone maker Apple has set an all-time revenue record in India and observed a double-digit growth in iPad sales in the country in the September 2024 quarter, senior officials of the company said on Friday. The company reported an over 6 per cent growth in total net sales to $94.93 billion during the reported period from $89.49 billion a year ago.
Retail investors have become a force to reckon with in the last 10 years with their ownership of Indian equities rising 800 basis points, or 8 per cent, to 23.4 per cent during this period, suggests a recent note from Morgan Stanley. This number, Morgan Stanley said, is set to rise in the next few years as Indian households are still underinvested in equities. India's demographics, policy framework, investor education and modest positive real rates, it said, will fuel the 'equity cult' in India.
Domestic institutional investors (DIIs) have infused a record Rs 4.6 trillion into Indian equities over the course of Samvat 2080, marking the highest net annual investment in any Samvat to date. This robust domestic inflow has effectively counterbalanced the comparatively subdued investments from foreign portfolio investors (FPIs), who contributed a net Rs 90,956 crore within the same timeframe. Against this backdrop, the Nifty 50 and BSE Sensex indices are on track to achieve their best performance in three Samvat years, despite recent market corrections.
Global investors have pulled out a whopping $21 billion (Rs 94,485 crore) so far this year from equity funds in emerging markets, amid rising inflation concerns and continuing political turmoil in the Middle East.
BRIC economies are currently worth around $11-12 trillion.
'It is less dependent on imported capital.'
Three such funds have been launched recently, more are in the pipeline.
Stock selection in India remain relatively low-beta given the lack of any conviction here on any near-term upturn in the investment cycle
We need to deliver strong 8 per cent plus GDP growth and near 20 per cent earnings to justify and fulfil expectations.
The HSBC Emerging Markets Index, a monthly indicator derived from the PMI surveys, remained only just above the neutral threshold of 50.0 in September, signalling muted output growth in emerging markets.
Talks on global climate finance virtually ground to a halt last week at COP29, the annual United Nations (UN) Climate Change event in Baku, Azerbaijan, as the developed world, led by the European Union (EU), and developing countries including India, Brazil, South Africa, and a clutch of island nations and African countries faced a wide chasm between their expectations. This has raised doubts about whether an agreement can be reached this week or whether talks will spill over to COP30, to be held next year in Benem, Brazil.
Brad Durham, Managing Director of Emerging Portfolio Fund Research, EPFR, says that Emerging Market, EM, funds have seen inflows of $450 million last week.\n
According to global consultancy firm Grant Thornton, 57 per cent of privately held businesses in 14 of the world's leading emerging markets indicated that they were optimistic about the prospects of their country's economy in the year ahead, while just 2 per cent in mature economies believed so.
'We are sure FY25 is going to be better...But to call out that all problems are behind us is a bit early.' 'The underlying business sentiment has not changed significantly.'
If technical analysts are to be believed, the index has more room for a slide down to 72,000 levels in the worst-case scenario, wiping out all the gains made in 2024 so far.
India's stock markets are experiencing a shift in investor sentiment, with a 30 per cent surge in Chinese stocks, prompting investors to move money from domestic markets to China. This reversal of fortunes is a notable change from the past three years, where China's losses benefited India.
According to the 2013 International outlook by Columbia Management and Threadneedle Asset Management, its global partner, pace of growth in emerging markets have witnessed a slowdown over the last year, but still about 70 per cent of the world's incremental growth comes from these markets.
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