Post Session: Quick Review

Indian equity benchmarks failed to hold gains on Friday’s trading session, with both Sensex and Nifty ending in red terrain. The start of the trading day was on a strong note, as SBI Research projected the Indian economy to grow at 7.5 per cent in 2022-23, an upward revision of 20 basis points from its earlier estimate. It said ‘given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23’.

Adding more optimism, the commerce ministry said India's merchandise exports rose by 15.46 per cent to $37.29 billion in May on account of healthy performance by sectors like petroleum products, electronic goods and chemicals, even as the trade deficit widened to $23.33 billion during the month. Traders took note of Food Secretary Sudhanshu Pandey’s statement that retail prices of wheat, rice, sugar and edible oils are showing a declining trend after the measures taken by the government, including curbs on exports of wheat and sugar.

Indices remained higher for the most part of the session, as traders got encouragement, after India's dominant services sector expanded at the fastest pace in 11 years in May on strong demand, although inflationary pressures touched new highs, restricting optimism and weighing on consumers' pocketbooks. The S&P Global India Services Purchasing Managers' Index rose to 58.9 in May from 57.9 in April, its highest since April 2011 and comfortably beating the Reuters poll expectation of 57.5. However, in the last hour, markets turned negative, on the back of heavy profit booking.

On the global front, European markets were trading in green cheered by the overnight's rally on Wall Street. Asian markets settled mostly higher, after the services sector in Japan continued to expand in May, and at a faster rate, the latest survey from Jibun Bank revealed on Friday with a services PMI score of 52.6. That's up from 50.7 in April, and it moves further above the boom-or-bust line of 50.

Back home, the non-banking financial companies shares remained in focus, as Care Ratings in its latest report has said that bank credit to non-banking financial companies (NBFCs) grew in double digit in FY22 with outstanding bank credit to them rising by 10.4 per cent to Rs 10.5 lakh crore on the back of improvement in overall economic activities and banks' renewed focus on the NBFC sector following improvement in their balance sheets.

The BSE Sensex ended at 55769.23, down by 48.88 points or 0.09% after trading in a range of 55719.36 and 56432.65. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.45%, while Small cap index down by 1.16%. (Provisional)

The only gaining sectoral indices on the BSE were IT up by 0.35%, Energy up by 0.28% and TECK up by 0.20%, while Power down by 2.40%, Basic Materials down by 2.31%, Utilities down by 2.21%, Auto down by 1.74% and Consumer Durables down by 1.58% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 2.02%, Infosys up by 0.94%, Larsen & Toubro up by 0.85%, Sun Pharma up by 0.63% and TCS up by 0.46%. On the flip side, Ultratech Cement down by 5.49%, Maruti Suzuki down by 2.71%, NTPC down by 2.51%, Axis Bank down by 2.18% and Bajaj Finserv down by 2.09% were the top losers. (Provisional)

Meanwhile, India’s service sector activity expanded in the month of May at strongest rate in over 11 years even after input cost inflation climbs to new record. The upturn was supported by a substantial pick-up in new business growth as demand continued to recover following the reopening of the economy after COVID-19 lockdowns.

As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 58.9 in May from 57.9 in April. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- also improved to 58.3 in May from 57.6 in April.

On the inflation front, the rate of inflation climbed to the highest in 16-and-a-half years of data collection. Services companies continued to transfer rising cost burdens through to customers via upward adjustments to selling prices. Little-changed from April, the overall rate of charge inflation was the second-highest in close to five years.

The report further noted that despite remaining optimistic towards the 12-month outlook for business activity, firms remained concerned that inflationary pressures would dampen the economic recovery. The overall level of positive sentiment improved from April, but remained historically low.

The CNX Nifty ended at 16584.30, down by 43.70 points or 0.26% after trading in a range of 16567.90 and 16793.85. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Reliance Industries up by 2.03%, Infosys up by 0.91%, Larsen & Toubro up by 0.91%, Sun Pharma up by 0.65% and TCS up by 0.50%. On the flip side, Grasim Industries down by 6.50%, Ultratech Cement down by 5.48%, Shree Cement down by 4.61%, Hero MotoCorp down by 2.98% and Maruti Suzuki down by 2.78% were the top losers. (Provisional)

European markets were trading in green, France’s CAC increased 18.64 points or 0.29% to 6,519.08 and Germany’s DAX was up by 43.28 points or 0.3% to 14,528.45.

Asian markets settled mostly higher on Friday, tracking gains in Wall Street overnight with bets that the US central bank would slow its current aggressive pace of interest rate hikes ahead to avoid tipping the US economy into a recession. Further, easing of Covid-19 restrictions in China also supported market sentiments. Japanese shares gained ahead to the release of US jobs data for May and slew of domestic economic data next week. Meanwhile, Japan and the US signed a revision on the beef safeguard mechanism under the US-Japan Trade Agreement. South Korean shares rebounded, supported by the Organization of the Petroleum Exporting Countries' decision to pump more crude oil over the next two months that helped ease inflation concerns. Markets in mainland China, Hong Kong and Taiwan were closed for the Dragon Boat Festival holiday.