Post Session: Quick Review

Trading strength to strength, Indian equity benchmarks finished Wednesday’s session near intraday high points as investors continued to hunt for beaten down but fundamentally strong stocks. Investors braced for policy outcome of the meeting, headed by RBI governor Shaktikanta Das, to be announced tomorrow morning. Markets showed stability till the end of the session, as traders were expecting the RBI will continue to keep the repo rate unchanged at 6.5 per cent. The broader indices, the BSE Mid cap index and Small cap index witnessed healthy buying throughout the day. 

Tracking overnight gains on Wall Street, markets made positive start and further extended their gains. Foreign institutional investors (FIIs) bought shares worth Rs 385.71 crore on June 6, provisional data from the National Stock Exchange shows. Traders took support with Credit rating agency ICRA in its latest report stating that India Inc. have witnessed sequential expansion in margins in Q4 FY2023, with a YoY increase of 11.4%, while the sequential revenue growth was relatively moderate at 5.2%. Markets remained in green in afternoon session even after the World Bank said growth in India is expected to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January. In late afternoon session, markets continued their upward rally to touch intraday high levels as traders went for value buying.

On the global front, European markets were trading lower as data showed German industrial output rose less than expected in April. Industrial production in the eurozone's largest economy rose 0.3 percent on the previous month, missing forecasts for a 0.6 percent rise. Asian markets ended mostly in green on Wednesday ahead of key central bank meetings next week. Meanwhile, Chinese trade data came in below expectations. Back home, India and US have launched a strategic trade dialogue here during which officials reviewed the ongoing cooperation in multilateral export control regimes and agreed to share the best practices to further the bilateral ties.

The BSE Sensex ended at 63,142.96, up by 350.08 points or 0.56% after trading in a range of 62,841.95 and 63,196.43. There were 24 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 1.09%, while Small cap index was up by 1.15%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.99%, Utilities up by 1.94%, Metal up by 1.70%, Capital Goods up by 1.66% and Realty was up by 1.52%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Nestle up by 2.97%, Tata Steel up by 2.29%, Tata Motors up by 2.21%, Bharti Airtel up by 1.70% and Larsen & Toubro up by 1.66%. On the flip side, Kotak Mahindra Bank down by 1.07%, Maruti Suzuki down by 0.56%, Bajaj Finance down by 0.51%, Mahindra & Mahindra down by 0.35% and ICICI Bank down by 0.29% were the top losers. (Provisional)

Meanwhile, the World Bank in its latest edition of Global Economic Prospects has said that India’s growth is likely to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January. This slowdown is attributed to private consumption being constrained by high inflation and rising borrowing costs, while government consumption is impacted by fiscal consolidation. Though, it also said India will remain the fastest-growing economy (in terms of both aggregate and per capita GDP) of the largest EMDEs (Emerging market and developing economies). 

Beside, global growth is projected to decelerate from 3.1 per cent in 2022 to 2.1 per cent in 2023. In Emerging Markets and Developing Economies (EMDEs) other than China, growth is set to slow to 2.9 per cent this year from 4.1 per cent last year. These forecasts reflect broad-based downgrades. Ajay Banga, the newly-appointed World Bank Group President said ‘the surest way to reduce poverty and spread prosperity is through employment - and slower growth makes job creation a lot harder’. He said ‘it’s important to keep in mind that growth forecasts are not destiny. We have an opportunity to turn the tide but it will take us all working together’. 

It said ‘growth is projected to pick up slightly through FY 2025/26 as inflation moves back toward the midpoint of the tolerance range and reforms payoff. India will remain the fastest-growing economy (in terms of both aggregate and per capita GDP) of the largest EMDEs’. In India, which accounts for three-quarters of output in South Asia, growth in early 2023 remained below what it achieved in the decade before the pandemic as higher prices and rising borrowing costs weighed on private consumption.

However, it said manufacturing rebounded into 2023 after contracting in the second half of 2022, and investment growth remained buoyant as the government ramped up capital expenditure. Private investment was also likely boosted by increasing corporate profits. Unemployment, it said, declined to 6.8 per cent in the first quarter of 2023, the lowest since the onset of the COVID-19 pandemic, and labour force participation increased. It added India’s headline consumer price inflation has returned to within the central bank’s 2-6 per cent tolerance band.

The CNX Nifty ended at 18,726.40, up by 127.40 points or 0.68% after trading in a range of 18,636.00 and 18,738.95. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia up by 3.99%, Tata Consumer up by 3.91%, BPCL up by 3.36%, Nestle up by 3.05% and HDFC Life Insurance up by 2.54%. On the flip side, Cipla down by 1.19%, Kotak Mahindra Bank down by 1.00%, Bajaj Finance down by 0.48%, Mahindra & Mahindra down by 0.34% and Maruti Suzuki down by 0.29% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 1.63 points or 0.02% to 7,626.47, France’s CAC fell 27.9 points or 0.39% to 7,181.10 and Germany’s DAX was down by 57.68 points or 0.36% to 15,934.76. 

Asian markets settled mostly higher on Wednesday with the prospect of a pause in the Federal Reserve's interest rate hike cycle next week. Meanwhile, investors awaited cues from US inflation data for directional cues. Wall Street’s overnight gains also helped the Asian markets to trade higher. Chinese shares traded almost flat with positive momentum due to expected stimulus measures to boost growth. But, some gains were capped by disappointed Chinese trade data. However, Japanese shares declined on profit booking.