Post Session: Quick Review

Indian equity markets yet another day scaled fresh highs levels and ended with gains over half a percent as investors continued to hunt for fundamentally strong stocks. Initially, indices hit the negative zone. But as the session progress, markets gained traction to touch record high levels. Investors were prepared for Infrastructure output and Government Budget Value data due this week. However, the broader indices ended mixed on Wednesday.

After making cautious start, markets traded in red for little time amid mixed cues from the other Asian markets. Traders were cautious as private report said a sluggish monsoon leading to subpar kharif sowing could queer the pitch further for food inflation, which already remains elevated. However, markets entered in green territory and held their gains, as some support came with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that India is at the threshold of a major structural shift in its growth trajectory. He added that India is moving ahead towards 8 per cent GDP growth in a sustained manner, adding that the average growth India recorded in the last three years is 8.3 per cent. Traders also took a note of Reserve Bank of India’s data stated that India’s financial position with the rest of the world improved over the year. The country increased its overseas assets more than it increased its foreign liabilities, largely due to a rise in reserve assets. During the financial year 2023-24, the net claims of non-residents on India decreased by $5.5 billion. Markets extended their upward momentum in afternoon session, as sentiments remained positive after Reserve Bank of India said that India’s external debt ratio improved to the best level in 13 years in FY24, declining to 18.7 percent of the GDP from 19 percent in the previous year.  The country added nearly $40 billion during this period, taking the total debt to $663.8 billion as of March 2024. In late afternoon session, markets hit all time high levels amid value buying by investors. 

On the global front, European markets were trading mostly in green after a euro-area policy maker hinted that two more interest rate cuts may be in store this year. Asian markets ended in green as a rebound in tech stocks helped offset hawkish comments from Federal Reserve officials. Amid much uncertainty about the interest-rate outlook, investors braced for the release of key U.S. inflation reading, due later this week for directional cues. Back home, Textile sector remained in limelight after Textiles Minister Giriraj Singh has said the government has approved over Rs 10,000 crore production linked incentive (PLI) scheme for textiles and now considering to extend it to the garments sector with a view to boosting domestic manufacturing and exports.

The BSE Sensex ended at 78,674.25, up by 620.73 points or 0.80% after trading in a range of 77,945.94 and 78,759.40. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.29%, while Small cap index was up by 0.15%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.30%, Energy up by 1.45%, Oil & Gas up by 0.98%, TECK up by 0.78% and Bankex was up by 0.58%, while Metal down by 1.46%, Realty down by 1.42%, Auto down by 0.75%, Consumer discretionary down by 0.52% and Consumer Durables was down by 0.50% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 4.09%, Bharti Airtel up by 3.07%, Ultratech Cement up by 2.68%, ICICI Bank up by 1.60% and Sun Pharma up by 1.37%. On the flip side, Mahindra & Mahindra down by 2.02%, Tata Steel down by 1.79%, Tech Mahindra down by 1.28%, JSW Steel down by 1.07% and Titan Company down by 0.86% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has asserted that the high interest rates are not impeding growth, and made it clear that the monetary policy will unambiguously focus on getting down inflation going forward.

Moreover, he said the country is at the threshold of a major structural shift in its growth trajectory and is moving towards a path where 8 per cent real GDP growth can be sustained on a yearly basis. He stated ‘Normally if growth is well sustained, if you’ve good growth, then it is a clear sign that your monetary policy and your interest rates are not acting as an impediment to growth.’

He said RBI’s nowcasting team is projecting a GDP growth number at 7.4 per cent for the June quarter, which is higher than the central bank’s own estimate of 7.3 per cent, and added that he is confident of the economy growing at the RBI estimated 7.2 per cent for FY25.

The CNX Nifty ended at 23,868.80, up by 147.50 points or 0.62% after trading in a range of 23,670.45 and 23,889.90. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Reliance Industries up by 4.12%, Bharti Airtel up by 3.15%, Ultratech Cement up by 2.74%, ICICI Bank up by 1.67% and Grasim Industries up by 1.40%. On the flip side, Apollo Hospital down by 2.52%, Mahindra & Mahindra down by 1.99%, Bajaj Auto down by 1.92%, Tata Steel down by 1.78% and Hindalco down by 1.58% were the top losers. (Provisional)

European markets were trading mostly in green; UK’s FTSE 100 increased 26.43 points or 0.32% to 8,274.22 and Germany’s DAX was up by 86.41 points or 0.47% to 18,264.03. On the flip side, France’s CAC was down by 11.27 points or 0.15% to 7,651.03. 

Asian markets settled higher on Wednesday with Japanese markets led regional gains as technology shares tracked their US peers higher. However, some gains were limited by anxiety over upcoming French elections, escalating tensions in the Middle East and hawkish comments from Federal Reserve officials. Federal Reserve governor Michelle Bowman has warned of upside risks to the inflation outlook and reiterated the need to keep borrowing costs elevated for some time. The are still not yet at the point where it is appropriate to lower the policy rate. Investors were cautiously awaiting the release of key US inflation reading, due later this week for directional cues.