Benchmarks end Thursday’s session on positive note

Indian equity benchmarks ended Thursday’s trading session on a positive note, backed by gains in Realty, Capital Goods and Consumer Durables stocks. After an initial gap-up, the markets wiped off some of their gains in the opening trade itself amid slight fall in industrial growth. The Index of Industrial Production (IIP) moderated to 5 per cent in April from an upwardly revised figure of 5.4 per cent in the preceding month. However, key gauges managed to trade in green throughout the day as government data showed Retail inflation continued its downward slide to reach a one-year low of 4.75 per cent in May due to a marginal decline of prices in the food basket and remained within the Reserve Bank’s comfort zone of below 6 per cent. Besides, foreign fund inflows also aided domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 426.63 crore on June 12.

Markets maintained their gains in second half of trading session, taking support from ICRA Executive Vice President and Chief Ratings Officer K Ravichandran’ statement that the PLI scheme is expected to attract investments of Rs 3-4 trillion in the next four years and generate 200,000 jobs as large projects in sectors, including semiconductor, solar module and pharmaceutical intermediaries, are expected to take off. He said that going ahead private sector capex is expected to pick up in oil and gas, metals and mining, hospitals, healthcare and cement sectors. Sentiments remained optimistic as the Reserve Bank of India (RBI) in its latest data report on ‘Overseas Direct Investment’ has showed that the country's outward foreign direct investment (OFDI) commitments increased 1.04% at $2009.51 million in May 2024 as compared to $1988.8 million in May 2023. These OFDI commitments were $2782.61 million in the month of April 2024. According to the report, the equity commitments rose 6.51% to $1028.76 million in May 2024 from $965.86 million a year ago.

On the global front, European markets were trading lower after the U.S. Federal Reserve held interest rates steady but cautioned that inflation is still too high to start cutting policy rate. Asian markets settled mostly higher on Thursday as soft U.S. inflation data helped keep the door open for a Federal Reserve rate cut in September.

Finally, the BSE Sensex rose 204.33 points or 0.27% to 76,810.90, and the CNX Nifty was up by 75.95 points or 0.33% points to 23,398.90.   

The BSE Sensex touched high and low of 77,145.46 and 76,719.70 respectively. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.79%, while Small cap index was up by 0.89%.

The top gaining sectoral indices on the BSE were Realty up by 2.15%, Capital Goods up by 2.05%, Consumer Durables up by 2.01%, Industrials up by 1.67% and IT up by 1.08%, while Telecom down by 0.89%, FMCG down by 0.46%, Utilities down by 0.39%, Bankex down by 0.10% and Metal down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.73%, Titan Company up by 2.68%, Larsen & Toubro up by 2.06%, Indusind Bank up by 1.59% and Tech Mahindra up by 1.44%. On the flip side, Hindustan Unilever down by 1.64%, ICICI Bank down by 1.10%, Axis Bank down by 0.99%, Power Grid Corporation down by 0.99% and Bharti Airtel down by 0.83% were the top losers.

Meanwhile, ICRA Executive Vice President and Chief Ratings Officer K Ravichandran has said the PLI scheme is expected to attract investments of Rs 3-4 trillion in the next four years and generate 200,000 jobs as large projects in sectors, including semiconductor, solar module and pharmaceutical intermediaries, are expected to take off.

Ravichandran said that going ahead private sector capex is expected to pick up in oil and gas, metals and mining, hospitals, healthcare and cement sectors.  These are the sectors that are expecting large outlay over the medium term. However, taking the private sector capex to record high levels would require the government to give some tax breaks so that people have more disposable income in their hands.

The PLI scheme was announced in 2021 for 14 sectors, including telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharma, with an outlay of Rs 1.97 trillion. PLI schemes have witnessed over Rs 1.03 trillion of investment till November 2023, and employment generation of over 678,000. 

The CNX Nifty traded in a range of 23,481.05 and 23,353.90. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 4.92%, Mahindra & Mahindra up by 3.21%, HDFC Life Insurance up by 3.20%, Divi's Lab up by 3.16% and Titan Company up by 2.68%. On the flip side, Hindustan Unilever down by 1.57%, Eicher Motors down by 1.06%, Axis Bank down by 1.04%, Power Grid Corporation down by 1.03% and Britannia Industries down by 1.03% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 39.83 points or 0.49% to 8,175.65, France’s CAC fell 97.45 points or 1.25% to 7,767.25 and Germany’s DAX lost 205.97 points or 1.12% to 18,424.89.

Asian markets settled mostly higher on Thursday as soft US inflation data fuelled bets that the US Federal Reserve will lower interest rates in coming months. Data showed that US consumer prices rose 3.3% in the year to the end of May, down 0.1% points from the month before. Although, the latest projections showed officials expect only one interest rate cut this year compared to the three projected in March. Hong Kong shares gained on optimism over Artificial intelligence (AI)’s potential to positively impact businesses. However, Chinese shares declined after the European Commission said it plans to impose provisional duties on imports of Chinese electric vehicles in July. Japanese shares fell ahead of Friday's BOJ policy meeting where the BoJ may consider trimming its bond buying, taking a first key step to reducing its almost $5 trillion balance sheet.