Post Session: Quick Review

Indian equity markets remained in green till the end of the session and settled the day’s trade in positive territory. Nifty hit fresh record high levels during the day. However, in last leg of trade, markets trimmed most of their gains ahead of the CPI inflation and IIP data to be announced later the day. The broader indices, the BSE Mid cap index and Small cap index ended with gains of over a percent. 

Markets made positive start and extended their gains, as investors took support after world bank report stated that India will remain the fastest-growing major economy recording a steady growth of 6.7 per cent in the next three years including the current financial year. Traders took note of report that exports from special economic zones (SEZs) rose by over 4 per cent to $163.69 billion in 2023-24 even though the country's total shipments dipped by more than 3 per cent in the last fiscal. Indices continued to trade higher in afternoon session as some support came in after Union Minister Piyush Goyal said that India is positioned in a sweet spot and it is the right time to convert challenges into opportunities. He also noted that the timely sharing of data and transparency in exports and imports will encourage investors to invest more confidently. Adding some relief, a private survey report stated that India stands sixth globally for its employment outlook for the third quarter of 2024, with 30% of businesses planning to hire more staff over the next three months. However, indices came off from day’s high levels in last leg of trade on account of profit booking by investors.

On the global front, European markets were trading higher ahead of the release of key U.S. inflation data and the Federal Reserve's interest-rate decision due later in the day. Meanwhile, the U.K. economy stagnated in April as growth in services output was offset by falls in both production and construction output. Asian markets ended mixed after Consumer prices in China were up 0.3 percent on year in May. That was shy of expectations for 0.4 percent and unchanged from the previous month. Back home, the rating agency -- India Ratings and Research (Ind-Ra) in its latest report has said that the steel demand is expected to grow in the range of 9-12 per cent during the ongoing 2024-25 fiscal.

The BSE Sensex ended at 76,606.57, up by 149.98 points or 0.20% after trading in a range of 76,533.78 and 77,050.53. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 1.07%, while Small cap index was up by 1.06%. (Provisional)

The top gaining sectoral indices on the BSE were Industrials up by 1.22%, Power up by 1.20%, Capital Goods up by 1.19%, PSU up by 1.18% and Utilities was up by 1.07%, while FMCG down by 0.40% and Realty was down by 0.11% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid Corp up by 2.53%, Tech Mahindra up by 1.61%, Bajaj Finance up by 1.18%, NTPC up by 1.02% and Ultratech Cement up by 0.99%. On the flip side, Mahindra & Mahindra down by 1.34%, Hindustan Unilever down by 0.88%, Titan Co down by 0.64%, Infosys down by 0.64% and Axis Bank down by 0.57% were the top losers. (Provisional)

Meanwhile, expressing optimism over the India’s growth prospects, the World Bank in its latest Global Economic Prospects report has stated that the country will remain the fastest-growing major economy recording a steady growth of 6.7 per cent in the next three years including the current financial year. As per the report, in India, growth is estimated to have picked up to 8.2 per cent in fiscal year (FY) 2023/24 (April 2023 to March 2024) - 1.9 percentage points higher than estimated in January. It further said global growth is projected to hold steady at 2.6 per cent in 2024 before edging up to an average of 2.7 per cent in 2025-26. That is well below the 3.1 per cent average in the decade before COVID-19.

It noted ‘The forecast implies that over the course of 2024-26 countries that collectively account for more than 80 per cent of the world’s population and global GDP would still be growing more slowly than they did in the decade before COVID-19’. Growth in the South Asia (SAR) region is projected to slow from 6.6 per cent in 2023 to 6.2 per cent in 2024, mainly due to a moderation of growth in India from a high base in recent years. With steady growth in India, regional growth is forecast to stay at 6.2 per cent in 2025-26. Among the region’s other economies, growth is expected to remain robust in Bangladesh, though at a slower rate than in the past several years, and to strengthen in Pakistan and Sri Lanka.

The report said ‘India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate. After a high growth rate in FY2023/24, steady growth of 6.7 per cent per year, on average, is projected for the three fiscal years beginning in FY2024/25’. This moderation is mainly due to a slowdown in investment from a high base. However, investment growth is still expected to be stronger than previously envisaged and remain robust over the forecast period, with strong public investment accompanied by private investment. It further said that private consumption growth is expected to benefit from a recovery of agricultural production and declining inflation.

It added government consumption is projected to grow only slowly, in line with the government’s aim of reducing current expenditure relative to GDP. According to the report, global inflation is expected to moderate to 3.5 per cent in 2024 and 2.9 per cent in 2025, but the pace of decline is slower than was projected just six months ago. Many central banks, as a result, are expected to remain cautious in lowering policy interest rates. Global interest rates are likely to remain high by the standards of recent decades - averaging about 4 per cent over 2025-26, roughly double the 2000-19 average. In India, World Bank said inflation has remained within the Reserve Bank’s target range of 2 to 6 per cent since September 2023.

The CNX Nifty ended at 23,322.95, up by 58.10 points or 0.25% after trading in a range of 23,295.95 and 23,441.95. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Coal India up by 2.59%, Power Grid up by 2.56%, Eicher Motors up by 1.93%, SBI Life up by 1.73% and Tech Mahindra up by 1.57%. On the flip side, Mahindra & Mahindra down by 1.69%, Britannia down by 1.42%, Hindustan Unilever down by 1.08%, Tata Consumer down by 0.96% and Titan Company down by 0.83% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 53.13 points or 0.65% to 8,200.94, France’s CAC rose 26.2 points or 0.34% to 7,815.41 and Germany’s DAX was down by 92.15 points or 0.5% to 18,462.09.

Asian markets settled mostly lower on Wednesday tracking a mixed finish overnight on Wall Street, while US treasury yields extended their decline ahead of key US inflation data and a Federal Reserve policy decision later in the day for additional clues on the outlook for interest rates. However, technology shares performed well after Apple unveiled new artificial intelligence features meant to rekindle demand for iPhones. Japanese shares declined as investors waiting for Japanese central bank policy decisions with speculation that the Bank of Japan will trim back JGB purchases in its announcement from Friday's meeting. Japan's wholesale prices in May rose 2.4% from a year earlier, due to both the rising cost of electricity and the weak yen, central bank data showed. Chinese shares fell on reports that the Biden administration is considering further restrictions on China's access to chip technology used for artificial intelligence. China's consumer inflation held steady in May while factory gate inflation eased, official data revealed.