Sensex, Nifty pare losses to end flat

Indian equity benchmarks rebounded significantly from intraday lows and ended flat on Friday, driven by strong performances from index heavyweights SBI, Reliance Industries and Hindustan Unilever. After opening with a downside gap, markets slipped into further weakness in the early part of the session, as investors traded with caution ahead of Q1FY25 earnings and key macroeconomic data due next week. Traders took note of former Chief Economic Advisor Arvind Subramanian’s statement that the Centre has sacrificed a large portion of revenue from Goods and Services Tax (GST), up to 1 per cent of GDP, every year since the rollout of the new indirect tax regime to fund a 14 per cent compensation guarantee provided to states. Subramanian, who was actively involved in the implementation of the GST regime, also said that it would not be advisable at this point in time to bring petrol and alcohol under the GST. 

Markets trimmed some of their losses in late morning deals but continued to trade in red for almost the entire trading session, as rising crude oil prices weighed on the sentiments. Investors also remained on sidelines ahead of the US non-farm payroll data which could give some indication on the interest rate direction going ahead. However, key indices demonstrated sharp intraday upside bounce from the lows towards the end and settled flat. Traders found support with exchange data showing that Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday, as they purchased shares worth Rs 2,575.85 crore. Some support also came with CRISIL Ratings’ report stating that the fast-moving consumer goods (FMCG) sector is expected to see a revenue growth of 7 to 9 per cent this fiscal, helped by higher sales volume and a revival of rural markets. It said volume growth from urban consumers will also remain steady at 7 to 8 per cent supported by rising disposable incomes and continued focus on premium offerings by the industry players, especially in the personal care and home care segments.

On the global front, European markets were trading higher after the Labour Party secured a landslide victory in the U.K. election to end 14 years of Conservative rule, as widely expected. Asian markets ended mostly down on Friday as EU tariffs on Chinese imports took effect and China announced the next step in its anti-dumping investigation into European brandy imports. Back home, on the sectoral front, cement industry's stocks were in focus as a report from rating agency ICRA showed that the cement sector has witnessed a muted growth of 2-3 per cent in the first quarter of current fiscal on account of a slowdown in construction activity because of the Lok Sabha polls. However, the overall volumes for the FY2024-25 are likely to expand by 7-8 per cent driven by a healthy demand from the infrastructure and housing sectors. There were some reaction in port sector stocks with report that cargo traffic across 12 major Indian ports rose 6.8 per cent to 69.08 million tonnes (MT) in June from 64.69 MT in the year-ago month, with 10 ports showing positive growth while the remaining two witnessed a decline.

Finally, the BSE Sensex fell 53.07 points or 0.07% to 79,996.60, and the CNX Nifty was up by 21.70 points or 0.09% points to 24,323.85. 

The BSE Sensex touched high and low of 80,149.87 and 79,478.96 respectively. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.75%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were PSU up by 1.85%, Oil & Gas up by 1.77%, Energy up by 1.70%, Capital Goods up by 1.55% and Industrials up by 1.48%, while Consumer Durables down by 0.43%, Bankex down by 0.18%, IT down by 0.13%, TECK down by 0.06% and Realty down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.48%, Reliance Industries up by 2.32%, Hindustan Unilever up by 2.01%, NTPC up by 1.86% and Larsen & Toubro up by 1.52%. On the flip side, HDFC Bank down by 4.55%, Titan Company down by 1.99%, Tata Steel down by 0.85%, Mahindra & Mahindra down by 0.72% and Indusind Bank down by 0.65% were the top losers.

Meanwhile, CRISIL Ratings in its latest report has said that the fast-moving consumer goods (FMCG) sector is expected to see a revenue growth of 7 to 9 per cent this fiscal, helped by higher sales volume and a revival of rural markets. It said volume growth from urban consumers will also remain steady at 7 to 8 per cent supported by rising disposable incomes and continued focus on premium offerings by the industry players, especially in the personal care and home care segments.

Moreover, it stated the premiumisation trend and growth in volume will expand the operating margin of FMCG companies by 50-75 basis points to 20-21 per cent. It also the margin expansion would have been higher but for rising selling and marketing expenses amid heightened competition among organised and unorganised players alike. 

It added the product realisations in FY25 are expected to grow in low single digits with a marginal rise in prices of key raw materials for the food and beverages (F&B) segment, however, key raw material prices for personal care (PC) and home care (HC) segments are seen to be stable. The F&B segment accounts for nearly half of the sector's revenue while PC and HC segments form a quarter each.

The CNX Nifty traded in a range of 24,363.00 and 24,168.85. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.06%, Reliance Industries up by 2.63%, SBI up by 2.42%, Britannia Industries up by 2.09% and Cipla up by 1.98%. On the flip side, HDFC Bank down by 4.50%, Titan Company down by 1.90%, LTIMindtree down by 0.85%, Tata Steel down by 0.73% and IndusInd Bank down by 0.61% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 5.67 points or 0.07% to 8,246.93, France’s CAC rose 27.36 points or 0.36% to 7,723.14 and Germany’s DAX gained 152.99 points or 0.83% to 18,603.47.

Asian markets ended mostly down on Friday. Chinese shares declined as China announced the next step in its anti-dumping investigation into European brandy imports, and as the European Commission's provisional tariffs on Chinese-made electric vehicles took effect. Meanwhile, investors were awaiting several Chinese data due next week, including CPI and PPI numbers for June and new yuan loans. Investors were also awaiting US job data for cues on the US Federal Reserve's future policy path. Japanese shares ended almost flat note, after touching record levels on the back of a weaker yen and expectations for earnings growth.