Post Session: Quick Review

Indian equity benchmarks traded with volatility throughout the day and ended the sessions flat amid the Reserve Bank of India's (RBI) monetary policy decision. Besides, hawkish comments from Fed officials spurred concerns about the outlook for inflation and interest rates. Investors preferred to play safe ahead of key macroeconomic data. The broader indices, the BSE Mid cap index and Small cap index ended in green. Buying was seen in Realty sector’s stock, while selling was witnessed in IT sector’s stock.

After making a negative start, markets turned volatile amid weak global cues. Foreign fund outflows weighted down on the markets sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 1,136.47 crore on April 4, provisional data from the NSE showed. Further, markets traded with marginal losses, as traders were cautious with ICRA’s report that growth of the Indian Securitisation market is set to slow this fiscal year keeping the trend witnessed in the last quarter of fiscal 2024 as non-banking finance companies and banks get into co-lending reducing the demand for such papers. Losses were limited after the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) decided to Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for the seventh consecutive time. In late afternoon session, markets wavered between gains and losses and finally ended the session flat. Traders took note of report that Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the consumption is likely to support economic growth in 2024-25, adding that urban consumption stayed buoyant. He said the resilience in cement production, together with strong growth in steel consumption and production and import of capital goods, augur well for the investment cycle to gain further traction.

On the global front, European markets were trading lower as investors reacted to hawkish comments from Federal Reserve officials and escalating tensions in the Middle East. Meanwhile, Germany's factory orders expanded in February after declining sharply at the start of the year, signaling that the recession is likely to be relatively mild. Asian markets ended mostly in red as hawkish comments from a trio of Fed policymakers as well as rising oil prices spurred more uncertainty about the outlook for U.S. interest rates. Back home, Power Minister R K Singh has said that the government has asked all power plants to operate at full capacity as it pulls all the stops to meet peak electricity demand in the searing summer season.

The BSE Sensex ended at 74,248.22, up by 20.59 points or 0.03% after trading in a range of 73,946.92 and 74,361.11. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index declined 0.50%, while Small cap index was up by 0.50%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.49%, Bankex up by 0.83%, FMCG up by 0.51%, PSU up by 0.45% and Telecom up by 0.24%, while TECK down by 0.51%, IT down by 0.44%, Capital Goods down by 0.22%, Auto down by 0.17% and Oil & Gas down by 0.15% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.92%, Bajaj Finserv up by 1.56%, HDFC Bank up by 1.41%, ITC up by 1.21% and SBI up by 0.89%. On the flip side, Ultratech Cement down by 1.69%, Larsen & Toubro down by 1.54%, Bharti Airtel down by 1.28%, Bajaj Finance down by 1.25% and Asian Paints down by 1.18% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) has decided to Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for the seventh consecutive time. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. 

On the inflation front, the MPC highlighted that headline inflation softened to 5.1 per cent during January-February 2024, from 5.7 per cent in December. After correcting in January, food inflation edged up to 7.8 per cent in February primarily driven by vegetables, eggs, meat and fish. Fuel prices remained in deflation for the sixth consecutive month in February. CPI core (CPI excluding food and fuel) disinflation took it down to 3.4 per cent in February - this was one of the lowest in the current CPI series, with both goods and services components registering a fall in inflation. CPI inflation for 2024-25 is projected at 4.5 per cent with Q1 at 4.9 per cent; Q2 at 3.8 per cent; Q3 at 4.6 per cent; and Q4 at 4.5 per cent. 

On the economic growth front, the domestic economy is experiencing strong momentum. As per the second advance estimates (SAE), real gross domestic product (GDP) expanded at 7.6 per cent in 2023-24 on the back of buoyant domestic demand. Real GDP increased by 8.4 per cent in Q3, with strong investment activity and a lower drag from net external demand. On the supply side, gross value added recorded a growth of 6.9 per cent in 2023-24, driven by manufacturing and construction activity. Real GDP growth for 2024-25 is projected at 7.0 per cent with Q1 at 7.1 per cent; Q2 at 6.9 per cent; Q3 at 7.0 per cent; and Q4 at 7.0 per cent.

The CNX Nifty ended at 22,513.70, down by 0.95 points or 0.00% after trading in a range of 22,427.60 and 22,537.60. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 2.06%, SBI Life up by 1.47%, HDFC Bank up by 1.44%, Bajaj Finserv up by 1.34% and ITC up by 1.14%. On the flip side, Ultratech Cement down by 1.81%, Grasim Industries down by 1.77%, Bajaj Auto down by 1.49%, Bajaj Finance down by 1.48% and Larsen & Toubro down by 1.44% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 72.43 points or 0.91% to 7,903.46, France’s CAC fell 111.22 points or 1.36% to 8,040.33 and Germany’s DAX was down by 276.42 points or 1.5% to 18,126.71.

Asian markets settled mostly down on Friday, tracking overnight declines on Wall Street and ahead of key jobs data due later in the day to gauge the health of the US economy and see what the Federal Reserve might do on interest rates. Meanwhile, hawkish comments from Fed officials and rising oil prices also spurred more uncertainty about the outlook for US interest rates. Japanese shares slumped as a firmer yen against the US dollar dented exporter issues. Markets in China and Taiwan were closed for Ching Ming Festival and Tomb Sweeping Day holiday respectively.