Benchmarks snap two-day losing streak on Monday

Snapping a two-day losing streak, Indian equity benchmarks ended in green on Monday tracking strength in global markets and buying in Capital Goods, Industrials and Realty stocks. After making a positive start, key gauges turned cautious as the Department for Promotion of Industry and Internal Trade (DPIIT) in its latest data has said that foreign direct investment (FDI) equity inflows into India declined 34 per cent to $10.94 billion during April-June 2023-24, dragged by lower inflows in computer hardware and software, telecom, auto and pharma. However, markets soon gained some traction as traders found support with Finance Minister Nirmala Sitharaman’s statement that India's Gross domestic product (GDP) growth in the first quarter of this fiscal (Q1FY24) should be good and that the government's priority is to tame inflation, which has touched a 15-month high. She also said that green shoots of private capital expenditure upcycle can be palpably felt as the government's enhanced capital expenditure is now crowding in private sector investments. 

Sentiments remained positive in afternoon deals, taking support from the commerce ministry’s statement that Indian and UK officials will continue their negotiations till the month-end to iron out differences on the proposed free trade agreement (FTA). It said this meeting will be followed by a review at the higher level. Some support came as Prime Minister Narendra Modi stated that India has become face of Industry 4.0 revolution; future of global growth dependent on future of business. Some optimism also came amid reports that rise in high net-worth individuals and their need for diversification beyond traditional investment products contributed to a 15 per cent year-on-year gain in the asset base of portfolio management services to Rs 28.5 lakh crore at June-end. However, gains were limited as some cautiousness remained among traders after the Reserve Bank of India (RBI) in its latest data has said India's foreign exchange reserve fell by $7.3 billion to a near two-month low of $595 billion in the week ended August 18, registering the most substantial weekly decline in over six months.

On the global front, European markets were trading higher despite U.S. Federal Reserve's hawkish stance on interest rates and the darkening economic outlook. Asian markets settled mostly higher on Monday as investors cheered China's stimulus to ease market unrest and drive economic growth. Chinese authorities announced a slew of measures over the weekend to bolster the country's equity markets and fuel an increase in spending.

Finally, the BSE Sensex rose 110.09 points or 0.17% to 64,996.60 and the CNX Nifty was up by 40.25 points or 0.21% to 19,306.05.          

The BSE Sensex touched high and low of 65,213.45 and 64,776.92, respectively. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.59%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.37%, Industrials up by 1.09%, Realty up by 0.95%, PSU up by 0.91% and Telecom up by 0.87%, while IT down by 0.38%, TECK down by 0.33%, FMCG down by 0.27% and Energy down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.09%, Mahindra & Mahindra up by 1.95%, HDFC Bank up by 1.01% and Sun Pharma up by 0.89% and Maruti Suzuki India up by 0.87%. On the flip side, Reliance Industries down by 1.11%, Nestle down by 0.97%, HCL Technologies down by 0.67%, Titan Company down by 0.59% and ITC down by 0.56% were the top losers.

Meanwhile, the Department for Promotion of Industry and Internal Trade (DPIIT) in its latest data has said that foreign direct investment (FDI) equity inflows into India declined 34 per cent to $10.94 billion during April-June 2023-24, dragged by lower inflows in computer hardware and software, telecom, auto and pharma. FDI inflows stood at $16.58 billion during April-June 2022-23. Inflows during January-March 2023 too had contracted 40.55 per cent to $9.28 billion.

It stated total FDI, which includes equity inflows, reinvested earnings and other capital, contracted 21.4 per cent to $17.56 billion during the period under review as against $22.34 billion in April-June 2022. During the quarter, FDI equity inflows decreased from major countries including Singapore, Mauritius, the US, UK, and UAE. Investments dipped significantly from Cayman Islands and Cyprus to $75 million and $6 million during April-June 2023 as against $450 million and $605 million in the year-ago period.

It highlighted that investments from overseas fell in April, May and June this fiscal to $5.1 billion, $2.67 billion and $3.16 billion, respectively as against $6.46 billion, $6.15 billion and $3.98 billion in the year-ago corresponding periods.

The CNX Nifty traded in a range of 19,366.85 and 19,249.70. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation up by 2.77%, Larsen & Toubro up by 2.11%, Cipla up by 1.95%, Mahindra & Mahindra up by 1.83% and BPCL up by 1.53%. On the flip side, JIO Financial Services down by 2.05%, Reliance Industries down by 1.27%, Adani Enterprises down by 0.87%, Hindalco down by 0.87% and Nestle down by 0.82% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 4.95 points or 0.07% to 7,338.58, France’s CAC rose 38.05 points or 0.53% to 7,267.65 and Germany’s DAX gained 51.04 points or 0.33% to 15,682.86.

Asian markets settled mostly higher on Monday tracking Wall Street’s overnight gains last Friday after US Fed Chair Jerome Powell expressed confidence in continued economic growth in the United States and reiterated Fed's commitment to pull inflation back to the 2% target. Meanwhile investors were awaiting key US jobs and inflation readings due this week. Chinese shares gained after Chinese authorities announced a slew of measures including plans to halve the stamp duty on stock trading starting Monday, while China's securities regulator also approved the launch of 37 retail funds to help infuse new capital into the capital market and said it would slow the pace of initial public offerings. Moreover, Japanese shares gained on tracking persistent weakness of the yen, but tourism-related shares declined amid worries about the impact of a ban on the country’s seafood by China.