Post Session: Quick Review

Indian markets ended Wednesday’s session slightly in red. Traders were cautious amid ongoing monetary policy committee (MPC) meeting. The Reserve Bank of India (RBI) is widely expected to keep rates unchanged for the seventh consecutive meeting. However, markets spent most of their time in green terrain. The broader indices, the BSE Mid cap index and Small cap index ended in green. 

Markets made gap-down opening tracking weak cues from Wall Street overnight as well as lackluster trade in Asian counterparts, as strong US economic data sent Treasury yields higher and renewed concerns over the outlook for interest rates. However, further markets saw recovery to trade flat with positive bias, as traders took some support with report that the government has broadly met the tax collection target of over Rs 34.37 trillion for 2023-24 on the back of robust economic activity and improved compliance. The government had raised the target for direct tax collection in FY24 (April 2023 to March 2024) to Rs 19.45 trillion, while for indirect taxes (GST+ Customs + Excise) the target was lowered to Rs 14.84 trillion in the revised estimates (RE) presented in Parliament on February 1, 2024. In afternoon session, indices remained higher. Traders continue to took support as the World Bank revised its earlier projection of Indian economy growth by 1.2 per cent to 7.5 per cent for FY23/24. But, markets failed to hold their gains and entered into red terrain, as traders sold some of their riskier assets ahead of outcome of RBI MPC meeting.

On the global front, European markets were trading mostly in green as investors awaited Eurozone inflation data and Fed Chair Jerome Powell's comments later in the day for further clues on the timing and speed of interest rate cuts. All Asian markets ended lower as strong U.S. data dented rate cut hopes and oil extended gains amid rising tension in the Middle East, clouding the inflation outlook. Back home, India Ratings and Research (Ind-Ra) has observed a notable increase in the resolution of cases under the Corporate Insolvency Resolution Process (CIRP), with the percentage of cases closed through the approval of resolution plans reaching 29% in Q3 FY24 (Q3 FY23: 17%).

The BSE Sensex ended at 73,876.82, down by 27.09 points or 0.04% after trading in a range of 73,540.27 and 74,151.21. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.61%, while Small cap index was up by 1.18%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.45%, Power up by 1.20%, PSU up by 1.06%, IT up by 0.78% and TECK was up by 0.73%, while Realty down by 2.45%, Auto down by 0.37%, FMCG down by 0.27%, Consumer Durables down by 0.23%, Consumer Discretionary down by 0.13% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 2.20%, TCS up by 1.81%, Tech Mahindra up by 1.75%, Bajaj Finance up by 1.38% and Axis Bank up by 1.32%. On the flip side, Nestle down by 2.62%, Kotak Mahindra Bank down by 1.40%, JSW Steel down by 1.35%, Titan Co down by 1.16% and Indusind Bank down by 0.98% were the top losers. (Provisional)

Meanwhile, the World Bank in its South Asia Development Update April 2024 has revised its earlier projection of Indian economy growth by 1.2 per cent to 7.5 per cent for FY23/24. It said overall, growth in South Asia is expected to be strong at 6.0 per cent in 2024, driven mainly by robust growth in India and recoveries in Pakistan and Sri Lanka. According to the report, South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.1% in 2025. It said ‘In India, which accounts for the bulk of the region's economy, output growth is expected to reach 7.5% in FY23/24 before returning to 6.6% over the medium term, with activity in services and industry expected to remain robust’. 

In India, the World Bank said, economic activity surprised on the upside in 2023Q4, with growth of 8.4 per cent from a year ago. The expansion was supported by rapid increases in investment and government consumption. More recent survey data point to continued strong performance. It added in February, India's composite purchasing managers index (PMI) stood at 60.6, well above the global average of 52.1 (a value above 50 indicates expansion). Growth in FY2023/24 is estimated to have exceeded earlier forecasts. According to the report, in India, inflation has remained within the Reserve Bank of India's 2-6 per cent target range since a spike in mid-2023, and the policy rate has remained unchanged since February 2023. Food price inflation has been elevated, partly reflecting a weak harvest due to El Nino.

In India, output growth is projected to reach 7.5 percent in FY2023/24 on the back of robust growth in Q3 of FY2023/24. Growth is expected to moderate to 6.6 percent in FY2024/25 before picking up in subsequent years as a decade of robust public investment yields growth dividends. The expected slowdown in growth between FY2023/24 and FY2024/25 mainly reflects a deceleration in investment from its elevated pace in the previous year. It further said growth in services and industry is expected to remain robust, the latter aided by strong construction and real estate activity. Inflationary pressures are expected to subside, creating more policy space for easing financial conditions.

As per the report, in Bangladesh, output is expected to rise by 5.7% in FY24/25, with high inflation and restrictions on trade and foreign exchange constraining economic activity. Following the contraction in FY22/23, Pakistan's economy is expected to grow by 2.3% in FY24/25 as business confidence improves. In Sri Lanka, output growth is expected to strengthen to 2.5% in 2025, with modest recoveries in reserves, remittances, and tourism.

The CNX Nifty ended at 22,434.65, down by 18.65 points or 0.08% after trading in a range of 22,346.50 and 22,521.10. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Shriram Finance up by 3.67%, NTPC up by 1.87%, Divi's Lab up by 1.72%, TCS up by 1.63% and Axis Bank up by 1.53%. On the flip side, Nestle down by 2.64%, Bajaj Auto down by 2.11%, Dr. Reddy's Lab down by 1.81%, Kotak Mahindra Bank down by 1.49% and Britannia down by 1.33% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC rose 21.07 points or 0.26% to 8,151.12 and Germany’s DAX was up by 51.48 points or 0.28% to 18,334.61. On the flip side, UK’s FTSE 100 was down by 31.99 points or 0.4% to 7,903.10.

Asian markets settled down on Wednesday following overnight declines in Wall Street as rally in commodities, positive US manufacturing activity and strong jobs data spurred speculation that the US central bank will keep interest rates higher for the time being. Meanwhile, investors were cautiously awaiting Fed Chair Jerome Powell's speech later in the day and the release of Friday's US non-farm payroll data for additional clarity on the timing and pace of Federal Reserve easing. Hong Kong shares dropped after a powerful earthquake in Taiwan raised concerns about possible disruptions to the vital chip-making industry. Moreover, Chinese shares declined even as a private survey data showed service sector activity in the country grew as expected in March.