Benchmarks end higher amid positive global cues

Indian equity benchmarks ended in positive territory on Friday following upbeat trends in global markets. Markets made a positive start and remained in green throughout the day as traders took support after the Export-Import Bank of India forecasted India’s merchandise exports to grow 12.3% on-year at $116.7 billion in the April-June quarter of FY25, on strong economic fundamentals and sustained manufacturing and services activity. Some support also came with a private report that India’s retail market is poised to surpass $2.2 trillion by 2030, with approximately 90 per cent of sales expected to occur offline. The report also finds that a substantial portion of all purchases will be influenced by what consumers see online. Adding to the optimism, a recent report by the Ministry of Commerce said India's exports have increased to as many as 115 countries out of the total 238 destinations during 2023-24 despite the global economic uncertainties. These 115 export destinations, which account for 46.5 per cent of India's export basket, include the US, UAE, Netherland, China, UK, Saudi Arabia, Singapore, Bangladesh, Germany and Italy.

However, gains remain capped as some pessimism remained among traders with report that as India's general election reaches halfway, declining voter turnout sparks concerns about disengagement in the world's largest poll. The decrease raises questions about the ruling Bharatiya Janata Party's support, causing uncertainty in financial markets. Some concern also came with private report stating that the Indian private equity and venture capital investments declined by about 35 per cent to around $39 billion in 2023 from $62 billion in 2022. The private equity (PE) investments in India dropped by 18 per cent to $29.6 billion from a peak value of $36 billion in 2022. The drop in VC investments was much sharper, with total investments at $9.6 billion in 2023 versus $25.7 billion in 2022. Besides, provisional data from the exchanges showed foreign institutional investors continued selling Indian equities as they net sold Rs 6,994.86 crore worth of shares on May 9, 2024.  Also, traders remained on sidelines ahead of India’s Index of Industrial Production (IIP) data to be out later in the day. 

On the global front, European markets were trading higher as Bank of England's dovish rate decision and better-than-expected U.K. GDP growth data boosted investor sentiment. According to data from the Office for National Statistics, U.K. GDP grew 0.6 percent from the fourth quarter, when the economy shrank 0.3 percent. Asian markets settled mostly higher on Friday as fresh signs of cooling in the U.S. labor market revived hopes for U.S. rate cuts this year. Nevertheless, the upside remained capped somewhat due to caution ahead of next week's crucial U.S. inflation data that could offer important clues on the Fed's rate trajectory.

Finally, the BSE Sensex rose 260.30 points or 0.36% to 72,664.47, and the CNX Nifty was up by 97.70 points or 0.44% points to 22,055.20.

The BSE Sensex touched high and low of 72,946.54 and 72,366.29 respectively. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were Utilities up by 1.61%, Power up by 1.53%, Oil & Gas up by 1.38%, Basic Materials up by 1.32% and Metal up by 1.31%, while IT down by 0.87%, Realty down by 0.58%, TECK down by 0.26% and Bankex down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.80%, Power Grid Corporation up by 2.63%, JSW Steel up by 2.45%, Asian Paints up by 2.28% and ITC up by 1.88%. On the flip side, TCS down by 1.62%, Infosys down by 0.95%, Wipro down by 0.79%, HDFC Bank down by 0.74% and Mahindra & Mahindra down by 0.73% were the top losers.

Meanwhile, ratings agency Icra has said that domestic tyre sale volumes are expected to see a moderate growth of 4-6 per cent this fiscal after witnessing an estimated pace of 6-8 per cent in the previous financial year. This growth in the last fiscal was driven by factors such as elevated base and subdued growth in the commercial vehicle (CV) segment.

However, Icra anticipates domestic demand from original equipment manufacturers (OEMs) in certain consumer segments like PV (passenger vehicle) and two-wheeler as well as for replacement to remain healthy, supporting overall tyre volume expansion in FY25. It stated while revenues are likely to expand by 5-7 per cent this fiscal, high natural rubber prices and increasing crude prices are likely to moderate the tyre industry's margins by 200-300 basis points (bps) in FY25.

The rating agency also said it expects the replacement market, which contributes to over two-thirds of the industry volumes, to remain stable, aided by healthy demand across the segments. Tyre export volumes, which contribute approximately 25 per cent of industry's sales (by value), are estimated to have recorded a low single-digit growth in FY24 after contracting by around 7 per cent in FY23, owing to demand shrinkage in key markets amid inflationary pressure and higher interest rates.

The CNX Nifty traded in a range of 22,131.30 and 21,950.30. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.50%, Power Grid Corporation up by 2.45%, NTPC up by 2.41%, Hero MotoCorp up by 2.35% and Eicher Motors up by 2.23%. On the flip side, TCS down by 1.65%, Cipla down by 1.38%, LTIMindtree down by 1.27%, Kotak Mahindra Bank down by 1.22% and Infosys down by 0.95% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 67.69 points or 0.81% to 8,449.04, France’s CAC rose 66.46 points or 0.81% to 8,254.11 and Germany’s DAX gained 115.15 points or 0.62% to 18,801.75. 

Asian markets settled mostly higher on Friday as cooling US labour market revived hopes for US interest rate cuts this year. Data showed that US Initial Jobless Claims for the week ended May 4 rose to 231000 from the previous week of 209000, higher than the market consensus of 210000. Investors were awaiting next week's crucial US inflation data that could provide cues on the Fed's interest rate trajectory. Japanese shares gained by tracking Wall Streets’ gains overnight. Hong Kong shares gained after reports that regulators are considering a proposal to exempt individual investors from paying taxes on dividends earned from Hong Kong shares bought via Stock Connect. Chinese shares ended on a flat note amid optimism around economic recovery and after reports that US President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs as soon as next week.