Post Session: Quick Review

Tracking positive cues from the global markets, Indian equity benchmarks ended higher for a sixth straight session on Friday. The start of the trading session was on a positive note, as continued buying by FIIs in Indian markets aided the domestic sentiments. Foreign institutional investors (FIIs) have net purchased shares worth Rs 1,799.32 crore, continuing buying for the fourth consecutive session on July 21, as per provisional data available on the NSE.

However, gains were limited during morning deals, as the FICCI’s quarterly survey showed that the Indian economy is expected to expand 7% in fiscal 2022/23, slower than a previous estimate of 7.4% and the central bank's 7.2% projection. The survey said the war in Ukraine is likely to keep inflation high and dent consumer demand. Also, the Asian Development Bank has slashed its growth forecast for India to 7.2 per cent for FY23 from 7.5 per cent estimated earlier citing higher than anticipated inflation since April and subsequent monetary tightening by the central bank.

But, in the afternoon deals, key indices added gains to end the trading day with notable gains. Domestic sentiments were optimistic, after Reserve Bank Governor Shaktikanta Das said the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies. He said RBI has been supplying US dollars to the market to ensure an adequate supply of liquidity to the market and also clarified that the central bank does not target a particular level for the currency.

On the global front, European markets were trading higher ending the week on a positive note despite the European Central Bank’s larger-than-expected interest rate as well as disappointing survey growth data. Asian markets settled mostly higher, after the manufacturing sector in Japan continued to expand in July, albeit at a slower pace, the latest survey from Jibun Bank said on Friday with a manufacturing PMI score of 52.2. That's down from 52.7 in June, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, auto ancillaries stocks remained in focus, as rating agency ICRA in its latest report has said that annual revenue of around 49 auto ancillaries is expected to grow 8-10 percent in the current fiscal year (FY23) from Rs 3 lakh crore. It said the revenue increase is expected on the back of stable demand and gradual easing of supply-chain issues in FY23. Banking stocks were also in focus as S&P Global Ratings said non-performing loans of banks are expected to decline to 5-5.5 per cent of the total advances by March 2024.

The BSE Sensex ended at 56072.23, up by 390.28 points or 0.70% after trading in a range of 55685.45 and 56186.05. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.17%, while Small cap index up by 0.21%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.49%, Basic Materials up by 1.26%, FMCG up by 0.43%, Realty up by 0.37% and Auto up by 0.30%, while Power down by 0.93%, TECK down by 0.77%, Utilities down by 0.75%, Telecom down by 0.69% and IT down by 0.69% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Ultratech Cement up by 5.03%, HDFC up by 2.37%, HDFC Bank up by 2.34%, Axis Bank up by 2.14% and ICICI Bank up by 1.74%. On the flip side, Infosys down by 1.73%, NTPC down by 1.19%, Power Grid Corp down by 0.83%, Wipro down by 0.80% and Indusind Bank down by 0.56% were the top losers. (Provisional)

Meanwhile, amid growing concerns about a weaker rupee, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies.

The statement came days after the domestic currency breached the 80-level against the dollar. The RBI Governor also noted that the Reserve Bank of India has zero tolerance for volatile and bumpy movement in the rupee and added that the central bank's actions have helped in smoother movement.

Besides, he said that the RBI has been supplying US dollars to the market to ensure an adequate supply of liquidity to the market and also clarified that the central bank does not target a particular level for the currency. Das said there was no need to be alarmed by unhedged exposures to foreign borrowings. The bulk of such exposures are by state-owned companies and the government can pitch in with help if need be.

On the inflation front, Shaktikanta Das said that the inflation targeting framework has worked well since adopting it in 2016 and stressed that the same should continue in the interest of the economy and the financial sector.

The CNX Nifty ended at 16719.45, up by 114.20 points or 0.69% after trading in a range of 16610.90 and 16752.25. There were 32 stocks advancing against 17 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 5.35%, Grasim Industries up by 3.87%, UPL up by 2.84%, HDFC up by 2.39% and HDFC Bank up by 2.33%. On the flip side, Tata Consumer Products down by 1.74%, Infosys down by 1.74%, NTPC down by 1.26%, Power Grid Corp down by 1.08% and JSW Steel down by 0.87% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 17.90 points or 0.25% to 7,288.41, France’s CAC increased 4.63 points or 0.07% to 6,205.74 and Germany’s DAX was up by 7.40 points or 0.06% to 13,254.04.

Asian markets settled mostly higher on Friday, supported by overnight gains on Wall Street following receding concerns over US Federal Reserve's aggressive interest rate hikes. Japanese shares gained with hopes for solid corporate earnings, even as Japan's core consumer inflation remained above the central bank's 2 percent target for a third straight month in June. Although, Seoul shares declined after data showed producer prices rose at a faster pace in June, while Europe's larger than expected interest rate hike also fueled concerns about global economic recession. Chinese shares ended flat with negative momentum as the country's cyberspace regulator fined Didi Global $1.2 billion for violating cybersecurity and data laws.