Post Session: Quick Review

After several exit polls pointed to a third term and sizable mandate for Prime Minister Narendra Modi, Indian equity markets hit record highs on Monday with Sensex and Nifty settling above the psychological 76,400 and 23,250 levels, respectively. Robust Indian GDP data for the fourth quarter of FY24 also boosted investor sentiment. There were no losing sectoral indices on the BSE.  The broader indices, the BSE Mid cap index and Small cap index ended with hefty gains. 

Markets made gap-up opening and remained higher, as traders took support after India’s gross domestic product (GDP) grew 7.8 per cent y-o-y during the January-March 2024 quarter (Q4 FY24) as compared to 7 per cent growth recorded a year ago.  For the full financial year 2023-24, India’s GDP growth rate stood at 8.2 per cent as against 7 per cent in FY23. Some support came in as growth of eight core industries rose to 6.2% in April from 6% in March, mainly due to higher growth achieved in natural gas, refinery products, coal, steel and electricity sectors. In afternoon session, markets continued to trade near all-time high points, as investors continued to hunt for fundamentally strong stocks. Traders remain energized as the government data showed that India’s goods and services tax (GST) collection in May rose 10 per cent year-on-year (Y-o-Y) to Rs 1.73 trillion, taking overall collection to Rs 3.83 trillion so far in the current financial year (FY25). Traders overlooked reports that India's manufacturing sector growth eased further in the month of May, signaling a slower but still substantial improvement in the health of the sector. The headline figure was nearly four points higher than its long-run average. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 57.5 in May as against 58.8 in April. It was 59.1 in March. In late afternoon session, markets continued their gaining momentum and ended with gains of over three percent.

On the global front, European markets were trading higher extending last week’s rally, as investors look ahead to the European Central Bank’s latest interest rate decision later this week. Asian markets ended mostly in green as soft U.S. inflation data revived rate cut hopes and a private survey showed China's factory activity grew the fastest in about two years in May due to production gains and new orders.

The BSE Sensex ended at 76,468.78, up by 2507.47 points or 3.39% after trading in a range of 75,678.43 and 76,738.89. There were 27 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 3.54%, while Small cap index was up by 2.05%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 7.78%, PSU up by 7.67%, Power up by 7.60%, Oil & Gas up by 7.42% and Energy was up by 6.28%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were SBI up by 9.60%, NTPC up by 9.50%, Power Grid up by 9.07%, Larsen & Toubro up by 6.31% and Reliance Industries up by 5.84%. On the flip side, Sun Pharma down by 0.35%, HCL Tech down by 0.22% and Asian Paints down by 0.13% were the few losers. (Provisional)

Meanwhile, India's manufacturing sector growth eased further in the month of May, signaling a slower but still substantial improvement in the health of the sector. The headline figure was nearly four points higher than its long-run average. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 57.5 in May as against 58.8 in April. It was 59.1 in March.

Amid marketing efforts, demand strength and favourable economic conditions, new orders rose at a substantial pace however the slowest in three months. Growth was stymied by competition and election-related disruptions. Besides, new export orders rose at a faster pace in May. The upturn was the strongest in over 13 years as firms noted gains from customers across several countries in Africa, Asia, the Americas, Europe and the Middle East.

The survey report further noted that Indian manufacturers expressed the highest level of positive sentiment towards growth prospects in nearly nine-and-a-half years. Confidence was fuelled by advertising and innovation, alongside expectations that economic and demand conditions will remain favourable. Ongoing strong sales performances combined with upbeat growth forecasts fuelled job creation in May, rising to one of the greatest extents seen since data collection started in March 2005.

On the price front, Jobs growth, parallel to rising material and freight costs, underpinned a quicker increase in input costs at goods producers. The overall rate of inflation remained below its long-run average, but picked up to its joint-highest since August 2022. In response to the latest increase in operating expenses companies raised their own selling prices in May. The rate of charge inflation quickened to an eight-month high.

The CNX Nifty ended at 23,263.90, up by 733.20 points or 3.25% after trading in a range of 23,062.30 and 23,338.70. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports up by 10.20%, NTPC up by 9.14%, SBI up by 9.07%, Power Grid up by 8.92% and ONGC up by 7.47%. On the flip side, Eicher Motors down by 1.32%, LTIMindtree down by 1.12%, HCL Tech down by 0.73%, Asian Paints down by 0.51% and Sun Pharma down by 0.46% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 17.58 points or 0.21% to 8,292.96, France’s CAC rose 22.26 points or 0.28% to 8,015.13 and Germany’s DAX was up by 137.73 points or 0.74% to 18,635.67.

Asian markets settled mostly higher on Monday as soft US inflation data kept the door open for the US Federal Reserve to cut interest rates later in the year. Hong Kong and South Korean shares gained, led by technology shares after Nvidia Corporation unveiled a new line of artificial intelligence chips. A survey showed South Korea's factory activity expanded in May at the fastest pace in two years. Japan shares rose after a survey revealed the health of Japan's manufacturing economy improved for the first time in a year during May. However, Chinese shares ended with marginal cut even as China's factory activity grew the fastest in about two years in May due to production gains and new orders.