Post Session: Quick Review

Local equity markets hit their lifetime peaks in early trade, but some profit booking in last leg of trade forced markets to end with minor gains. Firm global market trends, buying in blue-chip stocks and robust FIIs inflows helped the markets to trade higher on Thursday’s trade. Investors looking forward to Q1 results which will start flowing in from next week. The broader indices, the BSE Mid cap index and Small cap index ended with gains of over half a percent. 

Markets opened at fresh high levels following the mostly positive cues from Wall Street overnight as well as mostly firm cues from Asian counterparts, reflecting optimism about an interest rate cut by the US Fed in September following the release of weaker than expected US economic data. Traders took encouragement as a CRISIL Ratings report said that revenues of top 18 states, which account for 90 per cent of India's gross state domestic product, are likely to grow at a pace of eight to 10 per cent during the current financial year at Rs 38 lakh crore with robust GST collections and devolution of finances from the Centre, which comprise around 50 per cent of the aggregate state revenues. However, markets come off from highs levels but continued to trade in green. Traders took a note of report that S&P Global Ratings Director, Sovereign Ratings, YeeFarn Phua, said a sovereign rating upgrade for India in the next 24 months is possible if the central government is able to prudently manage its finances and bring down fiscal deficit to 4 per cent of GDP. Traders took some support with a research paper by the economic think tank NCAER stating that poverty in India is estimated to have declined to 8.5 per cent in 2022-24 from 21.2 per cent in 2011-12, despite the challenges posed by the pandemic.

In afternoon session, markets remained in green, as sentiments were positive amid a private report stating that India aims to clock $2 trillion goods and services exports by 2030 amid the Red Sea crisis and two ongoing wars. Ecommerce exports are growing rapidly and those done through the postal and courier routes are pegged at $1.5 billion. In late afternoon session, markets trimmed some of their gains amid profit taking.

On the global front, European markets were trading higher as softer-than-expected U.S. economic data fueled speculation that the Federal Reserve could slash interest rates in September. Asian markets ended mostly in green amid fresh signs of a weakening U.S. economy revived hopes of interest rate cuts sooner rather than later. Back home, government is likely to increase subsidies on rural housing in the upcoming Budget 2024 by up to 50 percent from the previous year to more than $6.5 billion. The move comes amid rural distress, spurred by higher food inflation and sluggish growth in farmers' incomes.

The BSE Sensex ended at 80,049.67, up by 62.87 points or 0.08% after trading in a range of 79,986.41 and 80,392.64. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.60%, while Small cap index was up by 0.62%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.17%, IT up by 1.12%, TECK up by 0.98%, Auto up by 0.88% and PSU was up by 0.77%, while Consumer Durables down by 0.22%, FMCG down by 0.15% and Oil & Gas was down by 0.02% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were HCL Tech up by 2.69%, ICICI Bank up by 2.54%, Tata Motors up by 2.40%, Sun Pharma up by 1.83% and TCS up by 1.34%. On the flip side, HDFC Bank down by 2.36%, Bajaj Finance down by 1.97%, Tech Mahindra down by 1.12%, Larsen & Toubro down by 0.96% and Ultratech Cement down by 0.91% were the top losers. (Provisional)

Meanwhile, the S&P Global Ratings Director, Sovereign Ratings, YeeFarn Phua, has expressed optimism over the country’s rating upgrade and said that for India a sovereign rating upgrade is possible in the next 24 months if the central government is able to prudently manage its finances and bring down fiscal deficit to 4 per cent of Gross Domestic Product (GDP). He said the trigger for upgrade would be general government (Centre + states) deficit falling below 7 per cent of the GDP, and a lot of this would have to be driven by the central government.

The central government estimates to bring down fiscal deficit to 5.1 per cent of the GDP in the current fiscal, from 5.63 per cent in 2023-24. As per the fiscal consolidation roadmap, the deficit -- the difference between government expenditure and revenue -- will be brought down to 4.5 per cent by 2025-26. The rating agency had in May upgraded outlook for India to positive, from stable, while retaining the rating at 'BBB-'.

Phua further said the Indian economy has clocked an average of 8 per cent growth in the last three years, driven by domestic consumption and infrastructure investment that has made real difference on the ground. He added ‘We see the medium-term growth potential for India at 7 per cent’. He also said if the infrastructure bottlenecks are removed, that will lead to 8 per cent growth potential without the risk of overheating. S&P estimates India's economic growth at 6.8 per cent in the current fiscal, lower than 8.2 per cent in the last fiscal.

The CNX Nifty ended at 24,302.15, up by 15.65 points or 0.06% after trading in a range of 24,281.00 and 24,401.00. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 2.79%, ICICI Bank up by 2.61%, Tata Motors up by 2.31%, Sun Pharma up by 1.56% and Infosys up by 1.43%. On the flip side, HDFC Bank down by 2.35%, Bajaj Finance down by 2.09%, Wipro down by 1.54%, Adani Enterprises down by 1.46% and Tech Mahindra down by 1.40% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 53.95 points or 0.66% to 8,225.07, France’s CAC rose 57.42 points or 0.75% to 7,689.50 and Germany’s DAX was up by 52.77 points or 0.29% to 18,427.30. 

Asian markets ended mostly higher on Thursday after a slew of softer-than-expected US economic data fuelled speculation that the Federal Reserve could slash interest rates as early as September. Meanwhile, investors are now awaiting minutes from the Fed’s latest policy meeting to gauge future interest rate cuts. Investors are also awaiting the release of key US nonfarm payrolls report and British election outcome. Japanese shares gained as a weaker yen boosted automakers and other export-related shares. However, Chinese shares fell due to plummeting property shares ahead of next week's Chinese political meeting.