Post Session: Quick Review

In volatile trading session, Indian equity markets scaled up new high levels on last trading day of week and ended flat. The volatility seen in the markets ahead of the results of the Lok Sabha polls announcement. Besides, weakness in global markets forced markets to trade cautiously. Selling was visible in the Metal and IT sector’s stocks. The broader indices, the BSE Mid cap index ended in green, while Small cap index ended in red.

Markets made cautious start and turned volatile following the broadly sell-off on Wall Street overnight as well as weakness in Asian counterparts after the recent release of stronger-than-expected US economic data and the slightly hawkish Fed minutes renewed concerns the US Fed will keep interest rates higher for longer than previously thought. Some cautiousness came in with report that India's engineering exports declined 3.2 per cent to $8.67 billion in April 2024, primarily due to lower shipments of metals, especially iron, steel and copper. The lower shipment of steel was mainly witnessed in Italy, Nepal, the UAE, the Netherlands, the USA, China, and South Korea, among others. In afternoon session, indices marched towards newer heights, as sentiments were positive after S&P Global Rating analyst said that India can get rating support over time if it utilises the highest-ever dividend of over Rs 2.11 trillion received from the Reserve Bank to reduce fiscal deficit.  The RBI board has decided to pay a record Rs 2.11 trillion dividend to the government for the fiscal ended March 2024, more than double of what was budgeted expectation of Rs 1.02 trillion. Traders took a note of an industry body, the Indian Staffing Federation’s (ISF) statement that India should consider lowering the 18% tax imposed on recruitment agencies for providing outsourced staff to big companies, which could help boost employment and wages of contract workers. However, in last leg of trade markets come off from high levels. 

On the global front, European markets were trading lower as confidence among French manufacturers worsened unexpectedly in May and returned to below its long-term average. Asian markets ended in red as robust U.S. economic data stoked concerns about sticky inflation and the Federal Reserve's rate path. Back home, a severe heat wave pushed India’s power demand to a fresh high. As per the data from the Ministry of Power, the power demand in India was on May 23, 2024 at its seasonal high at 237 gigawatts (GW), surpassing its previous record high of 234 GW seen earlier this week.

The BSE Sensex ended at 75,410.39, down by 7.65 points or 0.01% after trading in a range of 75,244.22 and 75,636.50. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index gained 0.23%, while Small cap index was down by 0.20%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.86%, Capital Goods up by 1.08%, PSU up by 0.66%, Industrials up by 0.59% and Oil & Gas was up by 0.52%, while FMCG down by 0.71%, IT down by 0.55%, Healthcare down by 0.51%, Realty down by 0.47% and Metal was down by 0.41% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC Bank up by 1.56%, Bharti Airtel up by 1.12%, Larsen & Toubro up by 0.93%, Axis Bank up by 0.61% and NTPC up by 0.59%. On the flip side, Tech Mahindra down by 1.33%, Asian Paints down by 1.21%, TCS down by 1.16%, Mahindra & Mahindra down by 1.13% and Titan Company down by 1.13% were the top losers. (Provisional)

Meanwhile, with lower shipments of metals, especially iron, steel and copper, India's engineering exports declined 3.2 per cent to $8.67 billion in April 2024. The growth of engineering exports has been steady in the past four months. The lower shipment of steel was mainly witnessed in Italy, Nepal, the UAE, the Netherlands, the USA, China, and South Korea, among others. Notably, engineering exports to the USA increased 1.2 per cent year-on-year to $1.41 billion in April this year. The value of shipments to Saudi Arabia was higher by 48.9 per cent in April 2024, at $435.72 million, as against $292.72 million in April 2023. Engineering exports to China went up 14.8 per cent to $210.29 million from $183.24 million in the same month last year. Engineering exports recorded a growth of 2.61 per cent during April 2024, excluding the export of iron and steel.

The exports of both metals declined by a substantial 36.41 per cent, which was the single biggest reason behind the fall seen during the current month. The decline in engineering exports was witnessed in almost all regions, barring North America, North East Asia, WANA, and the CIS. Among top exporting destinations, the USA, Saudi Arabia, UAE, Singapore, UK, Mexico, and China experienced positive growth in April 2024, while Germany, Italy, Turkey, South Korea, Japan, Nepal, Brazil, Thailand, France, Bangladesh, and many more saw negative export growth. A high base effect caused a decline in engineering exports to Russia, as exports to the country stood at $118.56 million in April 2024, 9.4 per cent lower compared to $130.91 million in the corresponding period last year.

Region-wise, North America and the European Union remained India's topmost destinations for engineering exports, with a share of 21.1 per cent and 18.4 per cent, respectively, in India's total engineering exports. North East Asia registered the highest growth of 24.5 per cent during April 2024 vis-a-vis the same period last year, followed by CIS (growth of 7.9 per cent), North America (growth of 4.7 per cent), and WANA (growth of 3.1 per cent). All remaining regions witnessed negative growth in exports. India's total engineering goods exports in the financial year ended March 2024 had risen marginally to $109.32 billion from $107.04 billion in FY2022-23, despite numerous challenges.

The CNX Nifty ended at 22,957.10, down by 10.55 points or 0.05% after trading in a range of 22,908.00 and 23,026.40. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC Bank up by 1.65%, Larsen & Toubro up by 1.13%, Bharti Airtel up by 1.05%, BPCL up by 1.03% and Axis Bank up by 0.75%. On the flip side, Adani Ports down by 1.89%, Tata Consumer down by 1.76%, Tech Mahindra down by 1.18%, ITC down by 1.17% and Titan Company down by 1.15% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 32.46 points or 0.39% to 8,306.77, France’s CAC fell 21.24 points or 0.26% to 8,081.09 and Germany’s DAX was down by 78.17 points or 0.42% to 18,613.15.

Asian markets settled down on Friday tracking overnight falls in Wall Street as robust US economic data stoked concerns about sticky inflation and a possible delay in US interest rate cuts. Data showed that US business activity grew at its fastest pace in more than two years in May, while weekly jobless claims fell by more than anticipated last week. Moreover, hawkish comments from another Federal Reserve official also weighed on market sentiments. Japanese shares dropped as data showed Japan's core inflation slowed for a second straight month in April, raising uncertainty over whether the Bank will raise interest rates further this year. Chinese shares declined as China's military started its second day of war games around Taiwan on Friday.