Benchmarks end higher on Monday

Indian equity benchmarks ended with gains of over half percent on Monday, led by gains in IT, TECK and Basic Materials stocks amid largely positive global cues.  After starting on a quiet note, benchmark indices soon gained ground and gradually climbed throughout the session, as traders took encouragement with the data released by the Controller General of Accounts (CGA) showing that a fiscal surplus of Rs 1.6 trillion in May due to the Reserve Bank of India’s (RBI’s) record dividend transfer narrowed the Centre’s fiscal deficit for the first two months of 2024-25 to Rs 0.5 trillion or 3 per cent of the full-year estimate. Some support also came as Commerce and Industry Minister Piyush Goyal stated that healthy increase in the country's exports, improvement in the current account deficit (CAD) and focus on expanding manufacturing will help the Indian economy register a healthy growth rate. Some solace came after data showed foreign portfolio investors (FPIs) turned net buyers in June, following two months of net outflow. FPIs bought shares worth Rs 26,565 crore on a net basis in the month, driven by political stability and a sharp rebound in markets aided by aggressive retail buying. 

Domestic markets sustained their upward momentum in late afternoon deals, taking support from the Ministry of Commerce & Industry’s data showing that the output of eight core industries posted a growth of 6.3 per cent in May 2024 as compared with 5.2 per cent a year ago, on the back of healthy expansion in the production of coal, natural gas, and electricity. Sentiments also got boost with report that growth in the Indian manufacturing sector recovered some of the ground lost in May, as the headline Purchasing Managers Index (PMI) figure released by HSBC rose to 58.3 in June from 57.5 in May. The recovery in the sector was based on the back of buoyant demand conditions that spurred the expansions in new orders, output and buying levels. Adding to the optimism, RBI's monetary policy committee member Shashanka Bhide said Indian economy is poised for potentially a stable high growth phase and it is also in a strong position in the context of significant risks that the country is facing.

On the global front, European markets were trading higher as the prospect of French political gridlock helped ease concerns about further strains on the country's public finances. Also helping underpin investor sentiment, a survey showed the downturn in the eurozone's manufacturing sector wasn't as bad as initially feared in June. Asian markets settled higher on Monday as investors reacted to in-line U.S. inflation reading, mixed Chinese data and the results of the first round of voting for the French National Assembly.  Back home, India has initiated an anti-dumping probe into the import of glass fibre from China, Thailand, Bahrain following a complaint by a domestic player. The duty is aimed at protecting the domestic industry from cheap imports.

Finally, the BSE Sensex rose 443.46 points or 0.56% to 79,476.19, and the CNX Nifty was up by 131.35 points or 0.55% points to 24,141.95. 

The BSE Sensex touched high and low of 79,561.00 and 78,971.79 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 1.11%, while Small cap index was up by 1.58%.

The top gaining sectoral indices on the BSE were IT up by 1.84%, TECK up by 1.46%, Basic Materials up by 1.21%, Telecom up by 1.03% and Industrials up by 0.95%, while Utilities down by 0.64%, Realty down by 0.40% and Power down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.94%, Bajaj Finance up by 2.24%, Ultratech Cement up by 2.11%, TCS up by 1.75% and Infosys up by 1.46%. On the flip side, NTPC down by 2.23%, SBI down by 0.80%, Larsen & Toubro down by 0.61%, Indusind Bank down by 0.45% and Bajaj Finserv down by 0.38% were the top losers.

Meanwhile, Ministry of Statistics & Programme Implementation (MoSPI) in its report has said that retirement fund body EPFO's gross new subscribers addition declined by over 4 per cent to 10.9 million in 2023-24 compared to a year ago. According to the report 'Payroll Reporting in India: An Employment Perspective January to April, 2024', the Employees' Provident Fund Organisation (EPFO) recorded 10,993,119 gross addition of new members in 2023-24 compared to 11,498,453 in 2022-23.

The gross addition of new members was affected due to the pandemic and declined from 11,040,683 in 2019-20 to 8,548,898 in 2020-21. It bounced back to 10,865,063 in 2021-22. The Centre as well as states had imposed lockdown restriction in 2020 and 2021 to curb the spread of deadly coronavirus in the country, which had hit economic activities as well as employment. It showed that in the last five fiscal years till 2023-24, the gross new members addition by EFPO had not recovered to pre-covid level of 2018-19. The gross addition of new members was 13,944,349 in 2018-19.

Since April 2018, the ministry has been bringing out the employment related statistics in the formal sector covering the period September 2017 onwards, using information on the number of subscribers who have subscribed under three major schemes, namely Employees' Provident Fund (EPF), Employees' State Insurance (ESI) and National Pension Scheme (NPS). It stated the numbers of subscribers are from various sources and there are elements of overlap. Therefore, the estimates from various sources are not additive.

The report also showed that the gross addition of members of Employees' State Insurance Corporation (ESIC) also dipped to 16,760,672 in 2023-24 from 16,773,023 in 2022-23. However, according to the report, the new addition of subscribers increased under NPS to 937,020 in 2023-24 from 8,4,735 in 2022-23.

The CNX Nifty traded in a range of 24,164.00 and 23,992.70. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.98%, Wipro up by 2.40%, Bajaj Finance up by 2.06%, Grasim Industries up by 2.04% and Ultratech Cement up by 1.99%. On the flip side, NTPC down by 2.06%, Eicher Motors down by 0.92%, Apollo Hospital down by 0.82%, SBI down by 0.72% and Dr. Reddy's Lab down by 0.66% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 24.9 points or 0.3% to 8,189.02, France’s CAC rose 118.57 points or 1.56% to 7,597.97 and Germany’s DAX gained 71.55 points or 0.39% to 18,307.00.

Asian markets settled higher on Monday amid growing bet for an early interest rate cut in the United States after US inflation report came broadly in line with expectations. Seoul shares gained as a survey revealed that South Korea's factory activity growth quickened in June to the fastest in 26 months on surging new orders. Chinese shares gained after the Caixin Manufacturing Purchasing Managers' Index (PMI) unexpectedly rose from 51.7 to 51.8 in June. Japanese shares marginally rose after a survey showed confidence among large Japanese manufacturers improved during the three months to June, although, the yen struggled near 38-year lows after Japan downgraded GDP numbers for the March quarter. Hong Kong markets were closed for Special Administrative Region Establishment Day.