Post Session: Quick Review

Indian equity markets witnessed recovery in Wednesday’s trade and ended with gains of over three percent on hopes of NDA likely to lead the government. Besides, traders were eyeing towards Reserve Bank of India’s Monetary Policy Committee (MPC) meeting. Investors ignored India’s services sector data. As for broader indices, the BSE Mid cap index ended with gains of over four percent, while Small cap index ended with gains of over two percent. There were no losing sectoral indices on the BSE. 

Markets made optimistic start and extended their gains as traders preferred to buy stock at lowest levels after yesterday’s sell-off and following overnight gains on Wall Street. Sentiments got up-beat with a private report that India's world record beating economic growth rate together with robust tax revenues, a fast expanding digital and financial infrastructure and a strong manufacturing sector will give the new government a base for unleashing next generation reforms that may make the country a developed nation by 2047. In afternoon session, markets continued their gaining momentum even after India’s services sector activity growth eased further during the month of May but remained comfortably above the neutral mark of 50.0, highlighting a sharp upturn in output. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index fell to 60.2 in May from 60.8 in April. It was 61.2 in March. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also eased to 60.5 in May as against 61.5 in April. Traders took support as private report stated that India's economic fundamentals remain robust, after the results of the country's general elections paved the way for Prime Minister Narendra Modi's third consecutive term in office. The Election Commission of India has declared results for all 543 Lok Sabha constituencies, with the BJP winning 240 seats and the Congress 99. In late afternoon session, indices remained higher as investors continued to hunt for fundamentally strong stocks.

On the global front, European markets were trading higher mirroring global sentiment as a soft U.S. labour market data firmed bets of a rate cut from the Federal Reserve, ahead of the European Central Bank's key rate verdict later this week. Asian markets ended mostly in red even as a private survey showed China's services sector in May expanded at its fastest pace since July last year. Back home, credit rating agency ICRA in its latest report has said that the overall securitisation volumes, originated mainly by non-banking financial companies (NBFCs) and housing finance companies (HFCs), is estimated at Rs 38,000 crore in Q3 FY2024, reflecting a sequential de-growth of around 17% from around Rs 46,000 crore recorded in Q2 FY2024.

The BSE Sensex ended at 74,382.24, up by 2303.19 points or 3.20% after trading in a range of 71,879.44 and 74,534.82. There were 29 stocks advancing against 1 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 4.41%, while Small cap index was up by 2.93%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 6.01%, Metal up by 5.36%, FMCG up by 4.52%, Auto up by 4.50% and Basic Materials was up by 4.48%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 7.14%, Tata Steel up by 6.36%, Mahindra & Mahindra up by 6.00%, Bajaj Finance up by 5.06% and Kotak Mahindra Bank up by 4.69%. On the flip side, Larsen & Toubro down by 0.08% was the only losers. (Provisional)

Meanwhile, in order to compete with China on the economic front, External Affairs Minister S Jaishankar has said India should focus on manufacturing, a key sector which was ignored by governments before Prime Minister Narendra Modi came to power in 2014. Noting that tension at the border with China has caused ‘abnormality’ in New Delhi-Beijing relations, he said India's thinking is absolutely clear that unless there is peace and stability in the border areas, the ties between the two Asian powers will not improve. There is no other way to counter China on the economic front, insisted the career diplomat-turned-politician while replying to questions from audience members on how he saw India's relationship with the world's second largest economy as it moves towards becoming a $5 trillion economy.

Jaishankar said ‘If we talk of rising Bharat, it will rise through technology. You cannot build strong technology on weak manufacturing. At any cost, we should put special emphasis on manufacturing, because that is the only economic response’. He emphasised that tension at the border has affected Sino-Indian ties. He said ‘As you know, there is tension at the border (with China). And this has caused abnormality in our relations. For that our thinking is very clear that unless there is peace and stability at the border, the relations will remain in the same deteriorated condition’.

About the future of the World Trade Organisation amid China dumping goods in India through dubious methods and advanced countries using the WTO to their own convenience, the Minister said while it has its own set of challenges, New Delhi should never leave the global forum. He noted ‘It (WTO) is a formal and accepted forum for talks. Here we would put forward our point, work with allies to save our interest. We recently held a meeting on fishing. We should also explore arrangements at bilateral and group levels’.

He also emphasised that reforms carried out by the government and policies framed to counter Covid-19 have helped India emerge from the pandemic and strengthen its economic position to such an extent that today ‘we are the fastest growing large economy’. He added ‘This is one reason why global perception about India has changed’. He said given India's leadership role, vision, stability, confidence and foreign investment figures, the world wants to collaborate with ‘us in our journey’.

The CNX Nifty ended at 22,620.35, up by 735.85 points or 3.36% after trading in a range of 21,791.95 and 22,670.40. There were 50 stocks advancing against 0 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports up by 8.46%, Indusind Bank up by 7.87%, Hindalco up by 7.12%, Hero MotoCorp up by 6.55% and Mahindra & Mahindra up by 6.53%. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 8.01 points or 0.1% to 8,240.05, France’s CAC rose 37.41 points or 0.47% to 7,975.31 and Germany’s DAX was up by 104.37 points or 0.56% to 18,510.01.