Markets end flat amid volatility

Indian equity benchmarks ended flat in the volatile session on Wednesday. Key gauges made a cautious start and traded lackluster throughout the day due to weak global cues, driven by concerns over an escalating trade conflict between the US and China. Traders also were cautious with Icra Ratings’ report that states continue to pay higher interest rates to investors for their debt, with the latest weighted average cost rising to 7.46 per cent at Tuesday's auctions wherein nine states raised Rs 16,200 crore. Some concern also came as the growth in India's services sector declined in June owing to inflation. The headline figure in the Purchasing Managers' Index (PMI) survey by credit rating agency S&P Global declined to 58.5 in June from 61.2 in May. This is the lowest level since April when it was 62.

However, traders took some support with provisional data from the National Stock Exchange showing that foreign institutional investors (FII) bought shares worth Rs 2,134.33 crore on July 4. Some support came with S&P Global Ratings analyst Neel Gopalakrishnan’s statement that the companies tracked by the global rating agency S&P in India are in good credit shape due to strong underlying growth and accommodative balance sheets. Traders also took a note of report that Finance Minister Nirmala Sitharaman has reviewed progress of implementation of Budget schemes with secretaries of finance ministry and Corporate Affairs Secretary. Besides the review of implementation of various schemes of Union Budget, the minister underlined the importance of continuous assessment of progress to ensure that the schemes are implemented in a time bound manner.

On the global front, Asian markets ended mostly lower on Wednesday after new data showed China's economy continued to struggle in June. Investors also looked ahead to the release of the Federal Reserve's latest monetary policy meeting minutes as well as the U.S. jobs report for hints on the trajectory of U.S. monetary policy. European markets were trading lower as a survey showed U.K. private sector continued to grow in June, but at the slowest pace since March.

Finally, the BSE Sensex fell 33.01 points or 0.05% to 65,446.04 and the CNX Nifty was up by 9.50 points or 0.05% to 19,398.50.     

The BSE Sensex touched high and low of 65,584.33 and 65,256.49, respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were FMCG up by 1.71%, Auto up by 1.62%, Oil & Gas up by 1.04%, PSU up by 0.80% and Energy up by 0.75%, while Bankex down by 0.27% and Telecom down by 0.13% were the few losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.61%, Indusind Bank up by 2.38%, Tech Mahindra up by 2.37%, Hindustan Unilever up by 2.03% and ITC up by 1.90%. On the flip side, HDFC Bank down by 3.20%, HDFC down by 2.93%, Bajaj Finserv down by 0.80%, Wipro down by 0.57% and Tata Motors down by 0.50% were the top losers.

Meanwhile, Fitch Ratings has said that Indian oil marketing companies' (OMCs) marketing segment to turn profitable from the financial year ending March 2024 (FY24) as crude oil prices fall to Fitch's assumption of $78.8 per barrel, following large losses in FY23 due to high crude prices and unchanged retail fuel prices. It said this should enable the OMCs to partly recoup the FY23 (April 2022 to March 2023) losses in first half of FY24, before the fall in crude prices in recent months is reflected in retail prices.

The rating agency expected India's petroleum product demand in the financial year ending March 2024 (FY24) to grow by a mid-single digit percentage after a 10 per cent rise in FY23, which was aided by the post-pandemic pent-up demand. Medium-term product demand growth is supported by Fitch's expectation of 6-7 per cent GDP growth for India over the next few years, driven by the government's increasing infrastructure spending and a pick-up in industrial activity.

Fitch Ratings also expects Indian refiners' gross refining margins (GRM) to moderate in FY24 from the record high in FY23 as it expects an easing of tight industry conditions. However, it still expects FY24 GRMs to be above mid-cycle levels due to increasing demand after China's reopening and uncertainty over Russia's transportation fuel supply. The normalisation of product spreads has also prompted India to discontinue in recent months the special excise duties on exports of diesel and aircraft turbine fuel that were imposed in July 2022.

The CNX Nifty traded in a range of 19,421.60 and 19,339.60. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 5.94%, Divi's Lab up by 5.91%, HDFC Life Insurance up by 4.33%, Maruti Suzuki up by 3.55% and Hero MotoCorp up by 3.50%. On the flip side, HDFC Bank down by 2.99%, HDFC down by 2.94%, Eicher Motors down by 2.61%, UPL down by 1.08% and Tata Consumer Products down by 1.06% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 40.98 points or 0.55% to 7,478.74, France’s CAC fell 48.3 points or 0.66% to 7,321.63 and Germany’s DAX lost 79.74 points or 0.5% to 15,959.43.

Asian markets ended mostly lower on Wednesday with caution ahead to the release of the Federal Reserve's latest monetary policy meeting minutes as well as the US jobs report for further clues on the US central bank’s rate-hike path. Chinese shares declined after a private survey showed China's services activity expanded at the slowest pace in five months in June, adding to worries about a faltering post-pandemic recovery in China. Goldman Sachs downgraded ratings on some Chinese banks. Meanwhile, the au Jibun Bank Flash Japan Services Business Activity Index eased to 54 in June 2023 from a series record 55.9 in May 2023.