Post Session: Quick Review

In volatile trading session, Indian markets hang out their most of time in green territory amid risk sentiment improved after First Republic Bank and Credit Suisse secured a lifeline, which helped ease recent concerns about turmoil in the banking sector. Although, cautiousness remained in investors mind ahead of next week's Fed and Bank of England meetings. Some traders have expressed optimism that the Fed will leave interest rates unchanged following the collapse of Silicon Valley Bank and Signature Bank. Stocks, particularly from the banking sector ended the day’s trade near high point despite risk sentiments in financial markets. Global markets also provided the much needed support to local markets even after European Central Bank raised interest rates by a half-percentage point (0.5 or 50 basis points). The central bank also promised emergency support for eurozone banks if needed, showing the policymakers' balancing act as they seek to combat high inflation without aggravating strains in the financial system. As for broader indices, BSE Small cap index and BSE Mid cap index traded in green right from the beginning. Huge buying in Metal and IT stocks mainly helped markets to end the session in green.

Mirroring positive US markets overnight, markets made gap up opening on hopes of stability coming back to global funding markets. Credit Suisse said it would borrow up to $54 billion from the Swiss National Bank to enhance its liquidity. Meanwhile, JP Morgan Chase, Morgan Stanley and several other big banks are reportedly discussing a potential deal with First Republic Bank to shore up the beleaguered lender. Further in volatile session, indices continued to trade in green with rating agency Crisil’s statement that the India’s economy is likely to log in 6 per cent growth next fiscal, in line with consensus estimates, driven by an increased capex by the private sector. It added the private sector capex is expected to deliver double-digit revenue growth for the second year on the trot. However, markets slipped into red in afternoon session but managed to wipe out all losses in late afternoon session, as investors purchased fundamentally strong stocks.

On the global front, European markets were trading higher after Credit Suisse and First Republic Bank received financial help designed to prevent a crisis in the banking sector. all Asian markets ended higher after First Republic Bank was rescued by a group of major US lenders, which eased worries about the current banking turmoil. Back home, Adani Group stocks remained in focused after stock exchanges removed three group companies from short-term surveillance. TCS remained in limelight during the day after CEO Rajesh Gopinathan quit to pursue other interests.

The BSE Sensex ended at 57,989.90, up by 355.06 points or 0.62% after trading in a range of 57,503.90 and 58,178.94. There were 21 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.29%, while Small cap index was up by 0.69%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.16%, Metal up by 2.42%, Bankex up by 1.22%, IT up by 1.10% and Industrials was up by 1.01%, while Auto down by 0.51%, Healthcare down by 0.41% and FMCG was down by 0.28% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were HCL Tech up by 3.58%, Ultratech Cement up by 2.69%, Nestle up by 2.32%, Kotak Mahindra Bank up by 2.16% and Tata Steel up by 1.90%. On the flip side, ITC down by 1.51%, Maruti Suzuki down by 1.48%, Power Grid down by 1.29%, NTPC down by 1.25% and Sun Pharma down by 1.21% were the top losers. (Provisional)

Meanwhile, rating agency Crisil in its annual growth forecast has projected India’s gross domestic product (GDP) growth at 6% in the next fiscal year (FY24), in line with consensus estimates, driven by an increased capex by the private sector. It added that the private sector capex is expected to deliver double-digit revenue growth for the second year on the trot. Besides, the economy is projected to grow 7 per cent this fiscal (FY23). The agency also sees the economy averaging 6.8 per cent growth over the next five fiscals. It further said it expects the corporate revenue to log in double-digit rise again next fiscal.

Crisil Chief Economist DK Joshi said a complex interplay of geopolitical events, stubbornly high inflation and sharp rate hikes to counter that have turned the global environment gloomier. On the domestic front, the peak impact of the rate hikes -- 250 basis points since May 2022, which has pushed interest rates above pre-Covid levels, will play out more in the next fiscal. He said retail inflation is expected to average 5 per cent in FY24 from 6.8 per cent in FY23, owing to the high-base effect and some softening of crude and commodity prices.

However, a good rabi harvest would help cool food inflation, provided the monsoons are normal while the slowing economy should moderate core inflation. Though, he said risks to inflation are tilted upward, given the ongoing heat wave and the World Meteorological Organization's prediction that an El Nino warming is likely over the next couple of months. On the external sector, Joshi said the country's external vulnerability is expected to decline with a narrower current account deficit (CAD) and modest short-term external debt.

While CAD is expected to narrow to 2.4 per cent of GDP or $8 billion next fiscal from an estimated 3 per cent of $100 billion this fiscal, its financing may face challenges as foreign portfolio flows remain volatile and external commercial borrowings are less attractive. In the corporate sector, Joshi said revenue growth is expected to touch double-digits in fiscal 2024 despite a global slowdown and interest rate hikes. This will be driven by a 10-12 per cent growth in revenue for non-commodity sectors despite the cooling prices.

The CNX Nifty ended at 17,100.05, up by 114.45 points or 0.67% after trading in a range of 16,958.15 and 17,145.80. There were 37 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 3.36%, Hindalco up by 3.05%, UPL up by 2.76%, Ultratech Cement up by 2.61% and Nestle up by 2.21%. On the flip side, Eicher Motors down by 2.00%, ITC down by 1.55%, NTPC down by 1.48%, Maruti Suzuki down by 1.43% and Cipla down by 1.06% were the top losers. (Provisional)

On the global front, European markets were trading higher, UK’s FTSE 100 increased 65.74 points or 0.88% to 7,475.77, France’s CAC rose 27.25 points or 0.39% to 7,052.97 and Germany’s DAX was up by 99.29 points or 0.66% to 15,066.39.

Asian markets settled higher on Friday tracking Wall Street’s strong gains overnight after reports that a group of US banking giants moved to shore up embattled First Republic Bank, that eased worries over a possible spreading of risks throughout financial system. Meanwhile, Investors are awaiting interest rate decisions from the US Federal Reserve. Chinese shares rose due to optimism over an economic recovery in the country. Moreover, Seoul shares gained as investors priced in a 25-bps hike at next week's Fed meeting.