Benchmarks end marginally higher in volatile session

Indian equity benchmarks remained volatile throughout the day but managed to end marginally higher on Thursday led by buying in Realty, Basic Materials and Metal stocks. Benchmark indices made a slightly positive start but soon turned cautious as investors adjusted their position amid the weekly F&O expiry. Some concern came as the ministry of labour and employment stated that formal job creation under the Employees’ State Insurance Corporation (ESIC) fell by 7.8% to 1.64 million in April 2024 as against 1.78 million in the corresponding month last year. Traders also remained cautious with the RBI Bulletin stating that retail inflation is gradually easing, but volatile and elevated food prices are interrupting the path of disinflation. In article on the ‘State of the Economy’, published in the June 2024 Bulletin, it said global growth was resilient in the first quarter of 2024, and many central banks have pivoted towards a less restrictive monetary policy stance in response to the fall in inflation in their economies.

However, markets showed gradual upside momentum in late morning deals and traded with gains till the end as traders found support with global rating agency Fitch Ratings’ statement that India will see higher Consumer spending with elevated consumer confidence. Expectations of better than expected monsoon will support growth and make inflation less volatile. The rating agency has elevated India’s growth forecast by 20 basis point to 7.2 per cent for fiscal year 2024-25. Earlier in March Fitch has forecasted India’s growth at 7 per cent. Besides, foreign fund inflows also aided domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 7,908.36 crore on June 19. Traders took note of report that government has hiked Minimum Support Prices (MSP) for all mandated Kharif Crops for Marketing Season 2024-25. This move aimed to ensure remunerative prices to the growers for their produce. The MSP of paddy (Common) has been raised by Rs 117 to Rs 2,300 per quintal. Jowar, Bajra, Ragi and Maize’s MSP have been increased to Rs 3371 (Jowar Hybrid) - 3421 (Jowar Maldandi), Rs 2625, Rs 4290 and Rs 2225 per quintal respectively. 

On the global front, European markets were trading higher as investors awaited the Bank of England's rate decision later in the day. The BoE is widely expected to hold its interest rate at 5.25 percent for the seventh straight session despite inflation hitting the 2 percent target in May. Asian markets settled mixed on Thursday as France's political crisis fueled jitters and investors looked ahead to a slew of central bank rate decisions.

Finally, the BSE Sensex rose 141.34 points or 0.18% to 77,478.93, and the CNX Nifty was up by 51.00 points or 0.22% points to 23,567.00.   

The BSE Sensex touched high and low of 77,643.09 and 77,100.36 respectively. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.55%, while Small cap index was up by 1.00%.

The top gaining sectoral indices on the BSE were Realty up by 1.97%, Basic Materials up by 1.88%, Metal up by 1.87%, Energy up by 0.90% and Oil & Gas up by 0.81%, while Auto down by 0.72%, Telecom down by 0.45%, Consumer Durables down by 0.25%, PSU down by 0.17% and Utilities down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were JSW Steel up by 1.67%, Tata Steel up by 1.28%, ICICI Bank up by 1.05%, Reliance Industries up by 1.00% and Kotak Mahindra Bank up by 0.96%. On the flip side, Sun Pharma down by 2.24%, Mahindra & Mahindra down by 2.10%, NTPC down by 1.26%, SBI down by 1.03% and Wipro down by 1.03% were the top losers.

Meanwhile, with an aim to kick start the offshore wind energy development in India, the Union Cabinet has approved the Viability Gap Funding (VGF) scheme for offshore wind energy projects at a total outlay of Rs 7453 crore, including an outlay of Rs 6853 crore for installation and commissioning of 1 GW of offshore wind energy projects (500 MW each off the coast of Gujarat and Tamil Nadu), and grant of Rs 600 crore for up-gradation of two ports to meet logistics requirements for offshore wind energy projects.

The VGF scheme is a major step towards implementation of the National Offshore Wind Energy Policy notified in 2015 with an aim to exploit the vast offshore wind energy potential that exists within the exclusive economic zone of India.  The VGF support from the Government will reduce the cost of power from offshore wind projects and make them viable for purchase by DISCOMs. 

The projects will be established by private developers selected though a transparent bidding process, While the power excavation infrastructure, including the offshore substations, will be constructed by Power Grid Corporation of India (PGCIL). Ministry of New and Renewable Energy, as the nodal ministry, will coordinate with various Ministries/Departments to ensure successful implementation of the scheme. The successful commissioning of 1 GW offshore wind projects will produce renewable electricity of about 3.72 billion units annually, which will result in annual reduction of 2.98 million ton of CO2 equivalent emission for a period of 25 years.

The CNX Nifty traded in a range of 23,624.00 and 23,442.60. There were 28 stocks advancing against 21 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Hindalco up by 2.34%, Grasim Industries up by 2.20%, JSW Steel up by 1.86%, BPCL up by 1.82% and Adani Ports &SEZ up by 1.54%. On the flip side, Hero MotoCorp down by 2.40%, Mahindra & Mahindra down by 2.04%, Sun Pharma down by 1.80%, HDFC Life Insurance Company down by 1.04% and NTPC down by 1.03% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 9.04 points or 0.11% to 8,214.15, France’s CAC rose 73.27 points or 0.97% to 7,643.47 and Germany’s DAX gained 111.31 points or 0.62% to 18,179.22.

Asian markets settled mixed on Thursday ahead of future rate decisions by major central banks. The People's Bank of China left benchmark lending rates unchanged at a monthly fixing in line with market expectations. Meanwhile, escalating geopolitical tensions in Europe and the Middle East also kept pressure on market sentiments. Chinese shares declined on concerns over a slowing property market. Japanese shares gained led by chip-related shares, while data showed Japan's exports rose for a sixth straight month in May.