SENSEX DIPS 374 PTS AHEAD OF PRESIDENTIAL DEBATE IN US
MUMBAI: Stock markets fell more than 1% on Monday, tracking weakness in global markets as investors turned cautious ahead US presidential debate and an OPEC meeting due later in the week.
Equities are likely to remain volatile with the upcoming expiry of futures and options (F&O) contracts later in the week, analysts said.
The benchmark BSE Sensex closed down 374 points, or 1.3%, to 28,294.28, while the wider NSE Nifty ended at 8,723.05, down 109 points, or 1.2%.
“Besides anxiety over F&O expiry week, participants were maintaining caution citing global markets condition ahead of first US presidential debate,” said Jayant Manglik, president, retail distribution, Religare Securities.
Moreover, crude oil prices rose on Monday on hopes that the Organisation of Petroleum Exporting Countries (OPEC) would strike a deal to limit production and revive prices, which have nosedived in the last two years.
Of the 30 Sensex stocks, 25 ended in the red, led by ICICI Bank, Tata Motors and ONGC (all down over 3%).
Most Asian markets also ended lower, led by Shanghai Composite Index, which declined 1.7%, and Japanese Nikkei and Hong Kong’s Hang Seng, falling 1.3% and 1.6%, respectively.
The rupee ended up 4 paise at 66.61 against the dollar.
“The important triggers for the market in the next few weeks will be the meeting of OPEC members this week and the RBI meeting early October, which will be closely watched for any interest rate cuts. CPI (consumer price index) inflation has cooled off to near 5% in August, and that along with the fall in IIP has raised hopes of a rate cut,” said Dipen Shah, senior vice-president at Kotak Securities. First we have to increase our domestic production. Secondly, we will have to look for new sources of energy, for which we have identified bioenergy. The amount of biomass available in India can help us create a new segment in our energy basket. This segment will have bio-fuel, ethanol, bio-diesel, bio-CNG etc. The third strategy is conservation, by using energyefficient techniques. India is the world’s fastest-growing energy consumer. We recently overtook Japan with 11% growth last year. The growth so far this year is also Agricultural waste, forest waste, and urban waste will be utilised. Swachh Bharat mission has to be converted into an economic model. If we can have bio-fuel as 10% to 15% of our energy basket, we will be successful in creating a business model for new energy worth ₹1 lakh crore. In the first phase, we will set up 10 or so bio-refineries in India, where second-generation ethanol will be produced. The talk about ethanol is not that old. It started when Atal ji (Atal Bihari Vajpayee) was the Prime Minister. But nothing moved for the 10 years after 2004 (the year the UPA began its two terms). We put it back on track with a price support mechanism. Meanwhile, the demand for energy has increased manifold. We cannot increase the capacity for ethanol production, so we are talking about second-generation ethanol. We do not want to micromanage. All we know is that energy is as important as tea, water, and sleep.
Our energy model has to be different from the rest of the world. We have the super rich and we have the bottom of the pyramid. They have different needs and different affordability. The government had no role in the growth of the services sector in the last 25 years. This was done by innovative youngsters. The shale gas revolution in America was not done by the government or big companies. They just created an ecosystem. Our need is to create carbon-efficient energy using our own raw materials, and make it accessible to all. This can be done only with technology, and only if institutions and youngsters apply their minds. The future of energy depends on innovation and a new business plan. Startups are a way to that.