Sensex, Nifty end flat amid volatility

Indian equity benchmarks ended flat with a negative bias in volatile session on Friday on profit booking at record-high levels amid weak global cues. Traders also remained on sidelines ahead of the results of the Lok Sabha polls announcement. Markets made a cautious start and oscillated between gains and losses throughout the day as traders got anxious 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. Some cautiousness also came with another report stating that investments by private equity (PE) and venture capital (VC) funds declined by 35 per cent to $4.4 billion in April compared with $6.8 billion in the year-ago period. It said PE/VC investors continue to remain cautious due to global uncertainties, geopolitical tensions, and the ongoing Indian general elections.

However, traders took some support with S&P Global Rating analyst’s statement 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. Some support came amid foreign fund inflows. Foreign institutional investors turned buyers on May 23 as they bought Indian equities worth Rs 4,670.95 crore. 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. 

On the global front, European markets were trading lower as U.S. rate jitters along with growing tensions between China and Taiwan sapped investors' appetite for risk. Asian markets settled down on Friday as robust U.S. economic data stoked concerns about sticky inflation and the Federal Reserve's rate path. Hawkish comments from another Federal Reserve official also weighed on investor sentiment.

Finally, the BSE Sensex fell 7.65 points or 0.01% to 75,410.39, and the CNX Nifty was down by 10.55 points or 0.05% points to 22,957.10. 

The BSE Sensex touched high and low of 75,636.50 and 75,244.22 respectively. There were 9 stocks advancing against 21 stocks declining on the index.

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

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 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 down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.64%, Bharti Airtel up by 1.12%, Larsen & Toubro up by 0.93%, NTPC up by 0.68% and UltraTech Cement up by 0.61%. On the flip side, Asian Paints down by 1.21%, Tech Mahindra down by 1.18%, ITC down by 1.16%, Mahindra & Mahindra down by 1.15% and TCS down by 1.14% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) has said that it expects stable operating performance for most infrastructure projects in the current financial year. It maintained its stable outlook on the infrastructure sector, including the transport segment which signifies low chances of rating changes for the sector in the near to medium term.

It assigned a positive outlook on the airport segment which means there are high chances of rating upgrades in the near to medium term. It stated that the stable outlook on the infrastructure sector factors in the likelihood of a stable operating performance for most projects, long-term revenue visibility under concession agreements and power purchase pacts and expected improved cargo and traffic volumes.

Besides, on the power sector, it expects total capacity installed to reach about 476 GW in FY25 against 440 GW as of March 2024. Bharat Kumar Reddy, Associate Director at India Ratings and Research, said ‘On the energy front, we have seen peak demand growing by almost 13 per cent during the last fiscal. However, the deficit has reduced to 1.5 per cent compared to 4 per cent which we have seen in FY23 that is largely because of better coal supply.’ The overall peak demand was 243 GW in FY24 and the total capacity installed was about 440 GW as of March 2024.

The CNX Nifty traded in a range of 23,026.40 and 22,908.00. There were 17 stocks advancing against 32 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were HDFC Bank up by 1.60%, Bharti Airtel up by 1.12%, BPCL up by 1.12%, Larsen & Toubro up by 0.99%, and UltraTech Cement up by 0.66%. On the flip side, Adani Ports & SEZ down by 1.83%, Tech Mahindra down by 1.42%, Mahindra & Mahindra down by 1.26%, JSW Steel down by 1.19% and Titan Company down by 1.19% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 34.27 points or 0.41% to 8,304.96, France’s CAC fell 14.79 points or 0.18% to 8,087.54 and Germany’s DAX lost 65.47 points or 0.35% to 18,625.85.

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.