Post Session: Quick Review

Indian markets marched towards fresh heights on Thursday’s session and finished the trade near record highs for yet another day. Bulls and Bears both were active in today’s session. Metal and Banking stocks offered support to markets to scale new levels. As for broader indices, the BSE Mid cap index witnessed volatility, while Small cap index saw stability in trade during the day. Meanwhile, monsoon session of Parliament commenced today and it will continue till August 17, 2023. There will be total 17 sittings during this session of the Parliament.  

After making cautious start, markets traded marginally lower, as sentiments were downbeat after S&P Global Ratings reportedly said India is unlikely to embark on any major new reforms till the 2024 elections, but momentum could pick up if the next government comes with a strong mandate. Traders also took a note of a private report that India’s chances of missing the budget deficit target for this fiscal year is very slim at the moment despite weather hindrances, divestment revenue risks and meek corporate tax collections, thanks to support from the central bank. However, in afternoon session, markets managed to recoup from lows, as investors found solace with World Bank President Ajay Banga’s statement that amidst risk of a global slowdown in the early part of next year, India is expected to remain shielded from its effects due to robust domestic consumption. Indices continued their upward rally till the end of the session. Traders got encouragement, as the Asian Development Bank (ADB) in its latest forecast has maintained the growth outlook for developing economies in Asia and the Pacific at 4.8 per cent for 2023, and noted robust domestic demand continues to support the region’s recovery. According to the Asian Development Outlook (ADO) July 2023, ADB forecasted that inflation in the region is expected to fall continuously, approaching pre-pandemic levels as fuel and food prices decline. 

On the global front, European markets were trading higher as investors assessed mixed earnings from companies in the region, although semiconductor stocks saw a heavy selloff after Taiwanese chipmaker TSMC delivered a downbeat sales forecast. Asian markets ended mostly in red amid traders remained cautiously optimistic because of an improving outlook for interest rates. Though the US Fed is still widely expected to raise rates by another quarter point next week, traders are hopeful it is nearing the end of its interest rate hikes. Back home, Credit rating agency Crisil in its latest report has said that the Indian specialty chemicals sector will see revenue growth of 6-7% in fiscal 2024, with higher domestic demand (60% of total revenue) driving up volume growth even as macroeconomic headwinds in the US and Europe subdue exports.

The BSE Sensex ended at 67,571.90, up by 474.46 points or 0.71% after trading in a range of 66,831.38 and 67,619.17. 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 0.05%, while Small cap index was up by 0.19%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.45%, Bankex up by 1.40%, Healthcare up by 1.05%, PSU up by 0.60% and Energy was up by 0.57%, while IT down by 0.81%, TECK down by 0.53%, Power down by 0.43%, Consumer Durables down by 0.37% and Capital Goods was down by 0.29% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 2.78%, Kotak Mahindra Bank up by 2.58%, ICICI Bank up by 2.24%, Maruti Suzuki up by 1.74% and Bharti Airtel up by 1.47%. On the flip side, Infosys down by 1.73%, Ultratech Cement down by 1.21%, HCL Tech down by 1.09%, Bajaj Finserv down by 0.62% and Larsen and Toubro 0.31% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s growth prospects, World Bank President Ajay Banga said that the country has come out strong from the challenges posed by the Covid pandemic but the momentum needs to be maintained. He said India is doing a lot of things which are helping it to stay ahead during times of a global slowdown. He added ‘One thing that is in India's favour is the very high percentage of GDP that comes domestically... India has come out strong from the challenges posed by the pandemic but the momentum needs to be maintained’. He noted ‘The best way to maintain this momentum is growth and more jobs. India is focussed on growing more and more and generating more jobs’.

About India's potential growth in high income jobs, Banga said ‘We need to understand where are these jobs. They are in technology, which are very few...then they are in manufacturing. India's opportunity currently is to cash in on the China plus strategy. This opportunity won't stay open for 10 years, it is a three to five years opportunity when supply chains start relocating or add another location that is going to need work’.

The World Bank President said he is preparing to pitch for private capital and corporate social responsibility funds to augment current sources of financing. He further said the gains made on poverty over the last three to four decades across the world took a hit due to the pandemic, climate change and higher debt in some countries. He said ‘the best way to drive a nail in the coffin of poverty is growth. You have to provide jobs to people...you have to provide education and skilling for those jobs. You have to provide healthcare for people’. Noting that India is focused on both growth and jobs, he said ‘I am actually more optimistic with all the infrastructure investment...both digital and physical infrastructure in India’.

The CNX Nifty ended at 19,979.15, up by 146.00 points or 0.74% after trading in a range of 19,758.40 and 19,991.85. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 2.78%, Kotak Mahindra Bank up by 2.64%, ICICI Bank up by 2.28%, Dr. Reddy's Lab up by 2.26% and Cipla up by 2.00%. On the flip side, Infosys down by 1.73%, Ultratech Cement down by 1.26%, HCL Tech down by 1.13% and Bajaj Finserv down by 0.50% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 50.84 points or 0.67% to 7,639.04, France’s CAC rose 22.65 points or 0.31% to 7,349.59 and Germany’s DAX was up by 31.78 points or 0.2% to 16,140.71.

Asian markets settled mostly lower on Thursday as investors were cautiously awaiting cues from the upcoming US Federal Reserve’s interest rate decision next week. Chinese shares declined as the Chinese government's pledge to support the private economy failed to impress investors, while sliding tech shares also dragged the broader market lower. Moreover, Japanese shares dropped ahead of earnings season in Japan. However, some losses were capped by Wall Street’s overnight gains after better-than-expected quarterly earnings reports from a spate of banks and other big companies.