Post Session: Quick Review

Indian equity benchmarks ended near their intraday high points on Friday with gains of over a percent. After a positive start, markets remained higher for the whole trading session, as economic research think-tank Centre for Monitoring Indian Economy (CMIE) has estimated that labour participation rate (LPR) was higher in rural India during the period January to April 2022. LPR, defined as the number of persons of the labour force employed as a percentage of working age population, is 40.9 in rural India as compared to 37.4 in urban India during the period January to April 2022.

In the second half of the trading session, indices added more gains, as domestic sentiments were positive, amid a private report stating that India’s economy maintained its momentum in April as a wider reopening from the pandemic kept rising prices from depressing demand for the time being. Activity in the services sector as well as factories gained last month, while the three-month weighted averages of monthly changes in indicators from exports to credit demand suggested enduring strength. Besides, the government has waived late fees for two months till June for delayed filing of GST returns for financial year 2021-22 by small taxpayers registered under the composition scheme.

During the trading session, market participants were seen taking a note of a private report stating that the Reserve Bank will opt for a larger, 0.50 per cent, hike in key rates at its next monetary policy review in June to protect medium term economic stability in face of the uncomfortable inflation situation. Besides, another private report stated that in a bid to streamline expenditure amidst pressure on the Centre's fiscal math, the Finance Ministry has allowed government departments to carry over their unspent amounts to subsequent quarters.

On the global front, European markets were trading higher heading for their best weekly advance since mid-March as investors returned to risk assets, lured by cheaper valuations. Asian markets settled higher on Friday, even after China's industrial profits declined in April as lockdowns disrupted production and higher raw material prices squeezed margins. The data from the National Bureau of Statistics showed that in April, industrial profits decreased 8.5 percent from the previous year. This was the biggest fall since early 2020.

The BSE Sensex ended at 54884.66, up by 632.13 points or 1.17% after trading in a range of 54449.34 and 54936.63. There were 22 stocks advancing against 7 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.69%, while Small cap index up by 1.20%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 2.38%, TECK up by 1.84%, Capital Goods up by 1.69%, Industrials up by 1.58% and Auto up by 1.50%, while Oil & Gas down by 0.88%, PSU down by 0.62%, Energy down by 0.54%, Metal down by 0.48% and Utilities down by 0.23% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tech Mahindra up by 4.10%, Indusind Bank up by 3.23%, Wipro up by 2.98%, Bajaj Finance up by 2.98% and Mahindra & Mahindra up by 2.67%. On the flip side, NTPC down by 2.43%, Bharti Airtel down by 1.24%, Power Grid down by 0.97%, Tata Steel down by 0.81% and Reliance Industries down by 0.47% were the top losers. (Provisional)

Meanwhile, credit rating agency, Moody's Investors Service in its update to Global Macro Outlook 2022-23 has lowered India's economic growth projection to 8.8 per cent for 2022 from 9.1 per cent earlier, citing high inflation. The rating agency however maintained its 2023 growth forecasts at 5.4 per cent.

As per the report, high-frequency data suggests that the growth momentum from December quarter 2021 carried through into the first four months this year. However, the rise in crude oil, food and fertilizer prices will weigh on household finances and spending in the months ahead.

The agency further noted that rate hike to prevent energy and food inflation from becoming more generalized will slow the demand recovery's momentum. Besides, Moody's said that but unless global crude oil and food prices rise further, the economy seems strong enough to maintain solid growth momentum.

The CNX Nifty ended at 16352.45, up by 182.30 points or 1.13% after trading in a range of 16221.95 and 16370.60. There were 37 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were Apollo Hospital Ent. up by 5.43%, Tech Mahindra up by 4.14%, HDFC Life Insurance up by 3.47%, Hero MotoCorp up by 3.16% and Indusind Bank up by 3.10%. On the flip side, ONGC down by 5.33%, NTPC down by 2.40%, Bharti Airtel down by 1.33%, Power Grid down by 1.10% and Tata Steel down by 0.81% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 11.96 points or 0.16% to 7,576.88, France’s CAC increased 53.32 points or 0.83% to 6,463.90 and Germany’s DAX was up by 94.97 points or 0.67% to 14,326.26.

Asian markets settled higher on Friday tracking Wall Street gains overnight after a string of better-than-expected earnings results from retailers. Meanwhile, investors also took comfort from the latest US Federal Reserve minutes suggesting that the Fed wants to slow the tightening cycle in the second half of the year following half-percentage-point rate hikes in June and July. Economic readings in the US sent mixed cues, with initial jobless claims falling more than expected last week, while revised first-quarter GDP print in United States suggesting a contraction of 1.5 percent YoY. Chinese and Hong Kong shares gained as Chinese tech firms got a boost from better-than-expected first-quarter revenue growth from Alibaba and Baidu, while hopes for improving Sino-US ties and more government stimulus also supporting market sentiments. Moreover, Japanese shares rose after data showed the Tokyo core consumer price index (CPI) grew 1.9% year-on-year in May 2022.