Post Session: Quick Review

A volatility witnessed over the Dalal Street on Monday’s trading session, with both Sensex and Nifty ending lower. After a cautious start, markets remained weak throughout the day, as sentiments were pessimistic, amid a private report stating that India will struggle to create enough jobs for its growing workforce over the next decade even if the economy grows at a rapid pace of 7%. It suggested that the world’s most-populous nation will need more concerted steps to boost employment and skills. Traders were concerned as the Reserve Bank of India (RBI) said India's forex reserves dropped $1.713 billion to $651.997 billion for the week ended June 28. 

However, indices managed to stage recovery towards end of the day to end flat. The recovery from day's low was supported by gains garnered by ITC, Hindustan Unilever, Nestle India and HCL Tech. Some support came with a report that foreign investors infused over Rs 7,900 crore in Indian equities in the first week of the month amid a healthy economic and earnings growth momentum. With this, total FPI investment in equities reached Rs 1.16 trillion so far this year, data with the depositories showed. Besides, traders took some support with exchange data showing that Foreign Institutional Investors (FIIs) bought equities worth Rs 1,241.33 crore on Friday.

On the global front, European markets were trading higher, as traders digested the unexpected result of France's snap election and looked forward to upcoming Congressional testimony by Fed Chair Jerome Powell as well as the release of U.S. CPI data this week for greater clarity on Fed's monetary policy path. Asian markets settled mostly down on Monday, even as Japan posted a current account surplus of 2.849 trillion yen in May. That exceeded expectations for a surplus of 2.07 trillion yen following the 2.52 trillion yen surplus in April. Imports were up 9.3 percent on year to 9.241 trillion yen, while exports jumped 12.1 percent to 8.132 trillion yen for a trade deficit of 1.107 trillion yen. 

Back home, defence companies’ stocks remained in watch, as Ministry of Defence said that India has achieved the highest-ever growth in indigenous defence production in value terms during Financial Year (FY) 2023-24, on the back of successful implementation of the policies and initiatives of the government. As per the data received from all Defence Public Sector undertakings (DPSUs), other PSUs manufacturing defence items and private companies, the value of defence production in India has gone up to a record-high figure i.e., Rs 1,26,887 crore, reflecting a growth of 16.7% over the defence production of the previous financial year. 

The BSE Sensex ended at 79960.38, down by 36.22 points or 0.05% after trading in a range of 79731.83 and 80067.46. There were 14 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 0.14%, while Small cap index was down by 0.22%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.46%, Oil & Gas up by 1.00%, PSU up by 0.91%, Energy up by 0.81% and Capital Goods up by 0.65%, while Consumer Durables down by 1.46%, Metal down by 0.80%, Telecom down by 0.78%, Auto down by 0.63% and Consumer Disc down by 0.53% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 2.27%, Hindustan Unilever up by 1.55%, Nestle up by 1.28%, HCL Tech. up by 0.92% and Tata Motors up by 0.87%. On the flip side, Titan down by 3.54%, Adani Ports & SEZ down by 1.65%, Tata Steel down by 1.40%, Asian Paints down by 1.31% and JSW Steel down by 1.21% were the top losers. (Provisional)

Meanwhile, with an aim to resolve the pending issues and close the negotiations, India and the UK will hold the next round of talks this month for the proposed free trade agreement (FTA) amid the new government taking charge in Britain. The India-UK talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles. Britain's newly-elected Prime Minister Keir Starmer spoke to Prime Minister Narendra Modi and said he stood ready to conclude an FTA that worked for both sides. The two leaders agreed to work towards the early conclusion of a mutually beneficial India-UK FTA. There are pending issues in both the goods and services sectors.

The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty. On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates and certain confectionary items. Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance). The two countries are also negotiating a bilateral investment treaty (BIT).

There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights. The bilateral trade between India and the UK increased to $21.34 billion in 2023-24 from $20.36 billion in 2022-23. The Labour Party's election manifesto for the recent polls also committed to clinching the deal. The new Starmer-led government's new Foreign Secretary David Lammy is also on the record saying that he wants to finish the job on the FTA and plans to visit India within the first month of being elected.

The CNX Nifty ended at 24320.55, down by 3.30 points or 0.01% after trading in a range of 24240.55 and 24344.60. There were 22 stocks advancing against 27 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were ONGC up by 3.80%, ITC up by 2.29%, HDFC Life Insurance up by 2.23%, Hindustan Unilever up by 1.58% and Tata Consumer Products up by 1.18%. On the flip side, Divi's Lab down by 3.57%, Titan down by 3.46%, BPCL down by 2.33%, Shriram Finance down by 2.02% and Adani Ports & SEZ down by 1.68% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 25.08 points or 0.31% to 8,229.01, France’s CAC rose 32.92 points or 0.43% to 7,708.54 and Germany’s DAX gained 86.08 points or 0.47% to 18,561.53. 

Asian markets settled mostly down on Monday with caution ahead to the release of US and Chinese inflation figures as well as Fed Chair Jerome Powell's congressional testimony due this week for additional clues on the Fed's monetary policy path. Meanwhile, a potential political deadlock in France after exit polls suggested that no party will likely win a clear majority in the parliamentary elections, also weighed on market sentiments. Chinese shares declined as investors braced for one of the country's biggest annual policy meetings. Japanese shares retreated as investors took profits following a multi-day rally, while data showed real wages in the country fell for a 26th straight month.