Markets snap two-day winning streak

Indian equity benchmarks snapped two-day winning streak and ended lower with losses of around half percent on Thursday, facing heavy volatility, amid emergence of profit-taking and negative trend in the US markets. Markets made a cautious start and traded with volatility in early deals as traders got anxious after the Securities and Exchange Board of India (Sebi) restrained 135 entities from accessing the securities market and directed them to impound around Rs 126 crore of wrongful gains from alleged market manipulation done through bulk SMSes. 

Markets faced selling pressure at higher levels in afternoon deals, even as Fitch Ratings raised its forecast for India's economic growth to 6.3 per cent for current fiscal year 2023-24 from 6 per cent it had predicted previously. This is primarily because of a stronger outturn in the first quarter and near-term momentum. Traders paid no heed towards a report by rating agency CRISIL stating that the residential real estate sector across the top six cities of India - Mumbai, Delhi NCR, Bengaluru, Pune, Kolkata, and Hyderabad - is expected to clock 8-10 per cent sales growth this fiscal year. It noted that buoyant residential demand across all segments has resulted in robust sales growth in the past two financial years. Traders also ignored provisional data from the National Stock Exchange showing that foreign institutional investors (FII) bought shares worth Rs 4,013.10 crore on June 21. 

On the global front, Asian markets settled mostly lower on Thursday following the broadly negative cues from global markets overnight, on renewed concerns over the outlook for interest rates following the hawkish remarks by US Fed Chair Jerome Powell, who reiterated the Fed is likely to continue raising interest rates in an effort to contain stubbornly elevated inflation. European markets were trading lower as investors waited for the Bank of England's interest-rate decision later in the day.

Finally, the BSE Sensex fell 284.26 points or 0.45% to 63,238.89 and the CNX Nifty was down by 85.60 points or 0.45% to 18,771.25.   

The BSE Sensex touched high and low of 63,601.71 and 63,200.63, respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.07%, while Small cap index was down by 0.64%.

The top losing sectoral indices on the BSE Power down by 1.47%, Utilities down by 1.16%, Telecom down by 1.05%, IT down by 0.91% and Realty down by 0.88%, while there were no gaining sectoral indices on BSE. 

The top gainers on the Sensex were Larsen & Toubro up by 0.95%, Tata Steel up by 0.73%, Bharti Airtel up by 0.55%, HDFC up by 0.49% and HDFC Bank up by 0.48%. On the flip side, Bajaj Finance down by 2.35%, Tata Motors down by 2.05%, Asian Paints down by 1.98% and Power Grid Corporation down by 1.72% and NTPC down by 1.63% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said residential real estate developers across top cities in India are expected to clock 8-10 per cent sales growth in current financial year (FY24) despite rise in interest rates and asset price. Buoyant residential demand across the mid, premium, and luxury segments had resulted in robust sales growth in the past two financial years.

It stated leverage and credit profiles of real estate developers had strengthened too, and should sustain over the medium term. It stated states sales by the 11 large and listed real estate developers rose 50 per cent year-on-year last fiscal in value terms.

According to it, large developers are poised to increase their market share to 30 per cent this fiscal year from 16-17 per cent in fiscal 2020. Aniket Dani, Director, of CRISIL Market Intelligence and Analytics, said healthy economic growth and offices continuing with the hybrid working model is keeping demand for residential real estate steady this fiscal, especially for bigger and premium residences.

The CNX Nifty traded in a range of 18,886.60 and 18,759.50. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 1.10%, Larsen & Toubro up by 0.98%, Tata Steel up by 0.82%, HDFC up by 0.57% and HDFC Bank up by 0.56%. On the flip side, Bajaj Finance down by 2.33%, Tata Consumer Products down by 2.11%, Asian Paints down by 1.99%, Tata Motors down by 1.87% and Power Grid Corporation down by 1.80% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 65.09 points or 0.86% to 7,494.09, France’s CAC fell 90.82 points or 1.25% to 7,170.15 and Germany’s DAX lost 104.76 points or 0.65% to 15,918.37.

Asian markets settled mostly lower on Thursday after US Federal Reserve Chairman Jerome Powell affirming that more interest rate increases are likely ahead to contain stubbornly elevated inflation. Japanese shares declined by tracking Wall street stocks overnight. Although, Japanese central bank board member Asahi Noguchi said that the central bank had to maintain its ultra-loose policy in the near-term to ensure steady wage growth. Meanwhile, markets in China, Hong Kong and Taiwan were closed for the Dragon Boat Festival.