Post Session: Quick Review

Indian equity markets took break from winning streak on Friday and ended the day with cut of over a percent. Bears took full control over markets, as traders sold-off their riskier shares. IT and Metal counters mainly pressurized the markets to trade lower during the day. As for broader indices, the BSE Mid cap index ended in red, while Small cap index managed to end in green. Globally investors were cautious ahead to next week's US Fed monetary policy meeting, where the Fed is widely expected to raise interest rates by another quarter point.

Markets made gap-down opening as investors opted to book profit after recent rally. Traders were concerned as latest payroll data released by the Employees’ Provident Fund Organisation (EPFO) showed that formal job creation slowed in May after recovering slightly at the turn of the fiscal year in the previous month. The number of new monthly subscribers under the EPF declined by close to 1 per cent to 883,176 in May from 891,974 in April. Markets added more losses in afternoon session with private report stating that private equity and venture capital (PE/VC) funds' investments into Indian entities declined by nearly a fourth to $27.5 billion in January-June 2023 against the year-ago period. Traders overlooked S&P Global Ratings’ report in which it has projected Indian banking sector's weak loans will decline to 3-3.5 per cent of gross advances by March 31, 2025 as structural improvements and good economic prospects would support the resilience of financial institutions. Indices continued to trade under heavy selling pressure in late afternoon session, as sentiments got hit after retail inflation for farm workers and rural labourers inched up marginally to 6.31 per cent and 6.16 per cent, respectively in June as compared to 5.99 per cent and 5.84 per cent in May this year. The All-India Consumer Price Index Number for Agricultural Labourers and Rural Labourers for June 2023 increased by 10 points each to 1,196 points and 1,207 points, respectively. CPI-AL and CPI-RL were 1,186 points and 1,197 points in May 2023.

On the global front, European markets were trading mostly in green as investors digested a fresh round of corporate earnings and looked ahead to a crucial Spanish election over the weekend. Asian markets ended mixed as fresh U.S. labor market data spurred concerns that the Federal Reserve will keep interest rates higher for longer to rein inflation. Back home, the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report has showed that India created 1630367 new jobs in the month of May 2023 as against revised figure of 1537511 in April 2023.

The BSE Sensex ended at 66,684.26, down by 887.64 points or 1.31% after trading in a range of 66,533.74 and 67,190.52. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.26%, while Small cap index was up by 0.13%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.69%, Industrials up by 1.33%, PSU up by 0.51%, Telecom up by 0.35% and Utilities was up by 0.08%, while IT down by 4.40%, TECK down by 3.91%, Consumer Durables down by 1.09%, FMCG down by 0.89% and Metal was down by 0.77% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 3.88%, NTPC up by 1.09%, Tata Motors up by 0.78%, SBI up by 0.78% and Kotak Mahindra Bank up by 0.70%. On the flip side, Infosys down by 8.18%, Hindustan Unilever down by 3.53%, Reliance Industries down by 3.19%, HCL Tech down by 3.07% and Wipro down by 3.07% were the top losers. (Provisional)

Meanwhile, S&P Global Ratings has projected Indian banking sector's weak loans will decline to 3-3.5 per cent of gross advances by March 31, 2025 on the back of structural improvement, including healthy corporate balance sheets, tighter underwriting standards, and improved risk-management practices. It also said that stronger balance sheets and higher demand should boost bank loan growth, but deposit growth would lag.

In its mid-year global bank outlook, S&P said India's economic growth prospects should remain strong over the medium term, with GDP expanding 6-7.1 per cent annually in fiscal years 2024-2026. It said India to remain the fastest-growing economy in Asia-Pacific, and the fastest-growing large economy globally.

It further said the small and midsize enterprise sector and low-income households are vulnerable to rising interest rates and high inflation. But it believed that interest rates in India are unlikely to rise materially. This should limit the risk for the country's banking industry. S&P further said that slower global growth and external demand will weigh on economic activity and could fuel further inflation. However, given that India is domestically oriented, it expects the economic growth to be less affected. It assumed the impact on the banking sector will also be modest.

The CNX Nifty ended at 19,745.00, down by 234.15 points or 1.17% after trading in a range of 19,700.00 and 19,887.40. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Larsen & Toubro up by 3.88%, ONGC up by 2.00%, NTPC up by 1.14%, SBI up by 0.83% and BPCL up by 0.70%. On the flip side, Infosys down by 8.13%, Tech Mahindra down by 4.62%, Hindustan Unilever down by 3.67%, HCL Tech down by 3.49% and Reliance Industries down by 3.10% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 2.35 points or 0.03% to 7,648.40 and France’s CAC was up by 18.42 points or 0.25% to 7,403.33. On the flip side, Germany’s DAX was down by 69.51 points or 0.43% to 16,134.71.

Asian markets settled mostly higher on Friday, despite a mixed performance on Wall Street overnight followed by disappointing earnings. Meanwhile investors are eagerly awaiting central bank meetings in the Unites States, Europe and Japan next week for further clues on the interest rate outlook. However, Japanese shares fell after weaker than expected trade data for June, with imports falling nearly 13% from a year earlier. Japanese investors dumped semiconductor shares following weak earnings from chip giant Taiwan Semiconductor Manufacturing Co (TSMC). Chinese shares ended almost flat with negative momentum on concerns over health of Chinese property developers after rating agencies, Moody's and S&P Global sent stark warnings about China's biggest commercial real estate firm Wanda Commercial.