Post Session: Quick Review

Indian equity markets lost some more ground on Wednesday and concluded the day’s trade with cut of over half a percent. Markets witnessed selling pressure till the end of the session ahead of outcome of general elections 2024, which will be declared on June 4. Besides, geopolitical tensions dampened the investor’s sentiments. Banking, IT and Oil & Gas sectors were on the priority list of the sellers. As for broader indices, the BSE Mid cap index ended in red, while Small cap index ended in green.

Markets made negative start and extended their losses tracking mixed cues from Wall Street overnight as well as weakness in Asian counterparts as skepticism over the outlook for interest rates continue ahead of the release of key inflation readings from the U.S. and Europe later in the week. The report on US personal income and spending in the month of April, due on Friday, includes readings on inflation said to be preferred by the US Fed. The inflation data could have a significant impact on the outlook for interest rates ahead of the Fed's next monetary policy meeting on June 11-12. Traders were cautious as data released by the government showed the ratio of cost overruns in central government projects rose to a 12-month high of 20.09% in April compared with 18.65% in the previous month. It said the anticipated cost of 1,838 projects with a value of Rs 150 crore and above, at Rs 33.2 lakh crore, was Rs 5.6 lakh crore higher than the original cost, with the ratio of delayed projects also rising compared with the previous few months. Indices continued to reel under selling pressure in afternoon session. Traders overlooked report by SBI Research in which it anticipates India's GDP growth could touch 8 per cent in FY24, with strong performance across various economic indicators and favorable monsoon conditions. The report also highlights the potential impact of global economic resilience on India's growth trajectory. Despite the challenges faced by the global economy, including geopolitical tensions and extreme weather events, global growth remains resilient, supported by easing inflationary pressures and strong employment conditions. In late afternoon session, markets remained lower and ended with cut of around 0.80% each as investors sold-off riskier shares. 

On the global front, European markets were trading lower as rising bond yields globally spurred concerns of interest rates staying elevated for longer, even as investors awaited more economic data to firm up bets on rate cuts. Asian markets ended mostly in red as the dollar and U.S. bond yields ticked higher following hawkish Fed comments and a poor two-year and five-year note auction. Geopolitical tensions also weighed after the pro-Iranian Yemeni Houthi group attacked a Greek ship in the Red Sea. Back home, the Directorate General of Foreign Trade (DGFT) has put on hold the new norms for permissible wastage amount for gold, silver and platinum content in jewellery exports until July 31, 2024, just a day after the notification after the gems and jewellery industry raised serious concerns on the new standards.

The BSE Sensex ended at 74,502.90, down by 667.55 points or 0.89% after trading in a range of 74,454.55 and 74,986.22. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional) 

The broader indices ended mixed; the BSE Mid cap index declined 0.38%, while Small cap index was up by 0.23%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 0.31%, Healthcare up by 0.31%, Utilities up by 0.25%, Power up by 0.24% and Industrials was up by 0.23%, while Bankex down by 1.37%, Oil & Gas down by 0.95%, IT down by 0.92%, Energy down by 0.90% and Realty was down by 0.88% were the top losing indices on BSE. (Provisional)

Meanwhile, the Economic Research Department of the State Bank of India (SBI) has released a detailed research report authored projecting a significant boost in India's economic growth, driven by a recovering global economy.  With strong performance across various economic indicators and favorable monsoon conditions, the report anticipates that India's GDP growth could touch 8 per cent in FY24. The report also highlights the potential impact of global economic resilience on India's growth trajectory. Despite the challenges faced by the global economy, including geopolitical tensions and extreme weather events, global growth remains resilient, supported by easing inflationary pressures and strong employment conditions.

SBI's in-house developed Artificial Neural Network (ANN) model, using 30 high-frequency indicators, forecasts Q4 FY24 GDP growth at 7.4 per cent. The report identifies a consistent growth trend across both urban and rural sectors in India. Urban economic momentum is indicated by strong performance in passenger vehicle sales, airport passenger traffic, GST collections, credit card transactions, petroleum consumption, and toll collection. Rural economic indicators also show a positive trend, with diesel consumption and two-wheeler sales increasing. An 'above normal' monsoon forecast bodes well for the rural economy, enhancing the supply of essential commodities like pulses, oilseeds, and cereals.

Corporate India continues to demonstrate resilience, with around 2,400 listed entities reporting strong numbers in Q4 FY24. While top-line growth stood at 9 per cent, EBIDTA increased by approximately 21 per cent. However, there was some pressure on profitability, with PAT growth declining to around 12 per cent from 42 per cent in the previous two quarters. Corporate Gross Value Added (GVA) grew by around 18 per cent in Q4 FY24, showing a slight reduction from previous quarters. With the global economy showing signs of recovery and easing inflationary pressures, India is well-positioned to achieve robust growth.

The top gainers on the Sensex were Power Grid up by 1.33%, Nestle up by 0.71%, Sun Pharma up by 0.58%, ITC up by 0.58% and Indusind Bank up by 0.38%. On the flip side, Tech Mahindra down by 2.26%, Bajaj Finserv down by 2.00%, ICICI Bank down by 1.99%, HDFC Bank down by 1.62% and Ultratech Cement down by 1.46% were the top losers. (Provisional)

The CNX Nifty ended at 22,704.70, down by 183.45 points or 0.80% after trading in a range of 22,685.45 and 22,825.50. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 3.52%, Power Grid up by 1.57%, Divi's Lab up by 1.27%, Nestle up by 1.00% and Sun Pharma up by 0.96%. On the flip side, HDFC Life Insurance down by 2.87%, SBI Life down by 2.62%, Tata Consumer down by 2.21%, ICICI Bank down by 2.21% and Tech Mahindra down by 2.18% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 28.98 points or 0.35% to 8,225.20, France’s CAC fell 69.88 points or 0.87% to 7,987.92 and Germany’s DAX was down by 114.98 points or 0.62% to 18,562.89.

Asian markets settled mostly down on Wednesday tracking Wall Street’s mixed closing overnight as the dollar and US bond yields ticked higher after hawkish comments from Minneapolis Federal Reserve Bank President Neel Kashkari and a weak 2-year and 5-year note auctions. Market sentiments weakened further as another attack on a ship in the Red Sea added to heightened geopolitical tensions in the Middle East. Meanwhile, investors are focusing key inflation readings from the major economies this week for more signals about interest rate policy. Japanese shares declined as rising Japan’s government bond yields hurting growth stocks. However, Chinese shares gained marginally after the country's biggest cities eased requirements for home down payments and mortgages to bolster slumping property market and the International Monetary Fund raised its forecast for China's economic outlook.