Post Session: Quick Review

After spending most part of the day in red, Indian markets managed into wipe out all losses in last leg of trade and concluded the trade in green. Traders remained cautious ahead of the Reserve Bank of India's interest rate decision. Meanwhile, the Monetary Policy Committee (MPC) of the Reserve Bank of India begins its bimonthly meeting today i.e. June 6 and outcome will be on June 8. On the sectoral front, IT counters mainly pressurized the markets to reel under selling pressure. 

After making cautious start, markets extended their losses with rise in crude oil prices overnight. Some concern came with report that India's monsoon onset over the southernmost Kerala coast is delayed by another two-three days because the formation of cyclonic circulation in the Arabian Sea has reduced cloud cover over the Kerala coast. Markets continued to reel under pressure in afternoon session even after private report stated that India's GDP growth will track above 6 per cent in the next two financial years, supported by strength in domestic demand. It pegged growth for 2023-24 and 2024-25 at 6.2 per cent and 6.5 per cent, respectively. Besides, listed companies mobilised nearly Rs 63,300 crore from the capital market in April to fund their business expansion plans, with debt emerging as the most preferred route for fundraising. However, in last leg of trade, indices spiked up in green, as traders preferred to buy stocks at day’s lower levels.  

On the global front, European markets were trading lower as concerns about inflation and slowing growth weighed on sentiment. Interest-rate concerns returned to the fore after the Reserve Bank of Australia unexpectedly raised rates again by 25 basis points and kept the door open to further hikes, saying inflation still remained too high. Asian markets ended mixed, as weak U.S. data rekindled growth worries and the Reserve Bank of Australia kept the door open to further tightening after unexpectedly raising its key interest rate. Back home, in efforts to further deepen financial inclusion in the country, the Reserve Bank of India (RBI) has launched a Financial Inclusion Dashboard ‘Antardrishti’.

The BSE Sensex ended at 62,792.88, up by 5.41 points or 0.01% after trading in a range of 62554.21 and 62,867.95. There were 17 stocks advancing against 13 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 0.42%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.25%, Auto up by 1.10%, Industrials up by 0.71%, Capital Goods up by 0.61% and Healthcare was up by 0.59%, while IT down by 1.66%, TECK down by 1.51%, Metal down by 0.45%, Oil & Gas down by 0.08% and Energy was down by 0.05% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Ultratech Cement up by 3.13%, Kotak Mahindra Bank up by 1.88%, Tata Motors up by 1.68%, Axis Bank up by 1.52% and Maruti Suzuki up by 1.42%. On the flip side, Infosys down by 1.98%, Tech Mahindra down by 1.88%, TCS down by 1.69%, Wipro down by 1.09% and Bharti Airtel down by 0.62% were the top losers. (Provisional)

Meanwhile, just few days ahead of the outcome of Reserve Bank of India’s (RBI’s) monetary policy meeting, SBI Research in a report said that the RBI is likely to again pause the repo rate, the rate at which the central bank lends money to banks, in its bi-monthly monetary policy. It added that the monetary policy committee will go for a ‘prolonged pause’. A monetary policy committee headed by RBI governor Shaktikanta Das will hold a three-day-long meeting with its decision be announced on June 8. 

Besides putting a brake on the interest, the report said the RBI is likely to downgrade inflation projections for 2023-24. It said there is also a possibility of a GDP growth upgrade. As per the report, retail inflation is projected to moderate to 5.2 per cent for 2023-24 in India as estimated by RBI in its April monetary policy meeting; with Q1 at 5.1 per cent; Q2 at 5.4 per cent; Q3 at 5.4 per cent; and Q4 at 5.2 per cent. GDP growth for 2023-24 is projected to be at 6.5 per cent and the SBI Research's expectations for an upgrade may have been prompted by more than estimated GDP growth India registered in 2022-23.

As per the provisional estimates released by the National Statistical Office (NSO) recently, real GDP growth for 2022-23 stood at 7.2 per cent, higher than the 7 per cent projected. In the last policy meeting in April, RBI monetary policy committee unanimously kept the repo rate unchanged at 6.50 per cent. Repo rates are already up 250 basis points from the lows of May 2022 and a full 135 basis points higher than the pre-pandemic repo rate of 5.15 per cent. Barring the April pause, the RBI raised the repo rate by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation.

The CNX Nifty ended at 18,599.00, up by 5.15 points or 0.03% after trading in a range of 18,531.60 and 18,622.75. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 2.89%, Divi's Lab up by 2.18%, Grasim Industries up by 1.84%, Axis Bank up by 1.82% and Kotak Mahindra Bank up by 1.77%. On the flip side, Tech Mahindra down by 2.08%, Infosys down by 1.95%, TCS down by 1.72%, ONGC down by 1.13% and Wipro down by 1.05% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 17.38 points or 0.23% to 7,582.61, France’s CAC fell 19.5 points or 0.27% to 7,181.41 and Germany’s DAX was down by 16.35 points or 0.1% to 15,947.54. 

Asian markets settled mostly higher on Tuesday, despite Wall Street’s overnight fall after data showed growth slowed in the country's services sector in May. Japanese shares gained after data showed that Japan’s wages rose in April, but households' spending remained weak and underlined a patchy economic recovery. However, Chinese shares fell amid heightened Sino-US tensions. Investors were cautiously focusing the upcoming Fed policy meeting in June for directional cues. South Korean market was closed for a holiday.