Markets end volatile day on a flat note

Indian equity benchmarks swung between gains and losses throughout the day and ended on flat note on Friday as global markets were largely under selling pressure ahead of the release of US job data, which could provide insight into upcoming Fed actions. After making positive start, key gauges slipped into red terrain as traders turned cautious as chief economist at State Bank of India revised downward the full-year growth forecast to a low 6.8 per cent from 7.5 per cent earlier for FY2023, citing the way below GDP numbers for the first quarter. Some concern also came as Consumer Pyramid Household Survey of the Centre for Monitoring Indian Economy showed that the employment rate among Indian youth (15-24 years) stood at 10.4% in 2021-22 compared to 10.9% in 2020-21. This is much lower when compared to the World Bank estimates of 23.2% for 2020.

However, key gauges erased all the losses to turn positive in noon session, as traders found some solace with Nitin Gupta, chairman of the Central Board of Direct Taxes (CBDT) stating that the Centre’s direct tax collection as on August 30 stood at Rs 4.8 trillion, which is 33 per cent more than the Rs 3.6 trillion collected in the same period last year. Gupta said if the trend continued, direct tax collection for FY23 could exceed the Budget target of Rs 14.20 trillion. Some support also came with the Reserve Bank of India (RBI) in its latest monthly data on India’s International Trade in Services showed that the country’s services exports increased by 20.2 per cent year-on-year to $23.26 billion in July 2022. However, the July exports were lower than $25.29 billion in June this fiscal.

But, markets failed to hold gains and ended flat amid a private report stating that India’s current account deficit (CAD) may hit a nine-year high in the June quarter of FY23 with the net exports ratio touching 5.3 per cent of gross domestic product (GDP) in the first quarter, Some pessimism also came after another report stated that though investments as a percentage of gross domestic product (GDP) rose year-on-year in the first quarter of 2022-23 (Q1FY23), they are still below the 30 per cent mark that is required to put the economy on a sustained growth path.

On the global front, European markets were trading higher despite mounting concerns over Europe's energy crisis and slowing growth momentum in the global economy. Market participants shrugged off data showing that German exports dropped for the first time in four months in July. Asian markets settled mostly lower on Friday as investors awaited a key U.S. jobs report due later in the day that could influence Federal Reserve plans for more interest rate hikes to curb record-high inflation.

Back home, select auto stocks ended higher with a private report that India’s auto sector demonstrated healthy growth rising to record levels in August year-on-year as shortage of semiconductors eased further helping companies to step up production ahead of the crucial festive season that kicked in with Ganesh Chaturthi on August 31. Power stocks were in watch as the power ministry data showed that India's power consumption grew marginally by nearly 2 per cent year-on-year to 130.35 billion units (BU) in August 2022.

Finally, the BSE Sensex rose 36.74 points or 0.06% to 58,803.33 and the CNX Nifty was down by 3.35 points or 0.02% to 17,539.45.

The BSE Sensex touched high and low of 59,108.66 and 58,558.64, respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.35%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.13%, Industrials up by 0.87%, Bankex up by 0.40%, Finance up by 0.36% and FMCG up by 0.33%, while Oil & Gas down by 0.99%, Energy down by 0.95%, Metal down by 0.93%, Basic Materials down by 0.62% and Auto down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.75%, ITC up by 1.72%, Larsen & Toubro up by 1.49%, HDFC Bank up by 0.95% and Axis Bank up by 0.92%. On the flip side, Maruti Suzuki down by 1.19%, Reliance Industries down by 1.19%, Indusind Bank down by 1.04%, Nestle down by 0.91% and Power Grid Corporation down by 0.86% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest monthly data on India’s International Trade in Services has showed that the country’s services exports increased by 20.2 per cent year-on-year to $23.26 billion in July 2022. However, the July exports were lower than $25.29 billion in June this fiscal. As per the data, the country’s services imports rose 22.3 per cent to $13.92 billion in July. In June, the imports stood at $15.76 billion. The exports during April-July 2022-23 stood at $94.75 billion, and the imports totalled $58.94 billion during the period.

The RBI said monthly data on services are provisional and are likely to undergo revision when the Balance of Payments (BoP) data are released on a quarterly basis. Earlier, Service Export Promotion Council (SEPC) had said that services sector exports are likely to touch $350 billion in the current fiscal. India's services sector exports touched an all-time high of around $250 billion in FY22

The CNX Nifty traded in a range of 17,643.85 and 17,476.45. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.81%, Adani Ports up by 1.78%, HDFC up by 1.49%, Larsen & Toubro up by 1.41% and Kotak Mahindra Bank up by 0.90%. On the flip side, BPCL down by 2.91%, Shree Cement down by 2.25%, Hindalco down by 1.72%, Hero MotoCorp down by 1.69% and ONGC down by 1.56% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 46.29 points or 0.65% to 7,194.79, France’s CAC increased 35.33 points or 0.59% to 6,069.64 and Germany’s DAX increased 162.29 points or 1.28% to 12,792.52.

Asian markets settled mostly lower on Friday tracking negative global cues overnight as traders remained cautious and concerned about the outlook for interest rates ahead of US jobs data due later in the day. Japanese shares declined, while the Japanese Yen’s slide to a fresh 24-year low against the US dollar and breaching the key psychological level of 140. Chinese shares ended almost flat as concerns over global growth following fresh lockdowns in the world’s second largest economy dented market sentiments.