Sensex, Nifty end at record closing highs on Tuesday

Indian equity benchmarks, after two days of profit booking, rebounded on Tuesday, hitting their fresh record closing levels on the back of gains in Auto, Consumer Durables and Realty stocks. Markets opened on a positive note and continued to inch higher throughout the day amid foreign fund inflows. Foreign institutional investors (FIIs) were net buyers in the cash segment for the fourth day in a row yesterday. They net purchased stocks worth Rs 61 crore on July 08. Traders took encouragement with the Reserve Bank of India’s KLEMS database showing that the total number of employed people as a ratio of the total population has increased to 44.2 per cent in FY24 from 34.7 per cent in FY18, with the workforce growing by 168 million during the period at 643.3 million. Total employment was 596.7 million in FY23, thereby adding 46.6 million in FY24. Traders also took note of report that India's informal sector grew post-pandemic, with Andhra Pradesh, Bihar, and Chhattisgarh logging big output gains in fiscal 2022-23. The number of informal firms in India increased 9 percent to 65 million in 2022-23 from 59.7 million in 2022-21, according to the Annual Survey of Unincorporated Sector Enterprises data released by the Ministry of Statistics and Programme Implementation.

Markets extended gains in second half of trading session and logged all-time closing high levels, taking support from rating agency Crisil’s report stating that securitisation volume rose to Rs 45,000 crore in the first quarter of the current fiscal (Q1FY25), marking a around 17% on-year, like-to-like growth (adjusted for the exit of a large HFC and regulatory measures on gold loan securitisation). Over 95 originators, including NBFCs and banks, tapped the market to diversify funding sources, compared with around 80 in previous fiscal. Some optimism also came with report stating that area sown under major crops was 14 percent higher as of July 5 compared with the previous year, as rainfall situation improved across the country. According to data released by the Indian Meteorological Department, sowing is likely to improve further as the country faced a rainfall surplus of 1.8 percent as of July 8.

On the global front, European markets were trading lower as investors reacted to a slew of disappointing corporate updates and looked ahead to a crucial testimony from Federal Reserve Chair Jerome Powell before a congressional panel for additional clues on the rate trajectory. Asian markets settled mostly higher on Tuesday after Wall Street equities inched higher to close at record peaks overnight ahead of the Federal Reserve Chair's testimony and key U.S. consumer and producer price inflation figures due this week. Back home, on the sectoral front, fuel related stocks were in watch as data from the Petroleum Planning and Analysis Cell of the oil ministry showed India's fuel consumption rose by 2.6% year-on-year to 19.99 million metric tonnes in June from a year earlier. There were some reaction in insurance industry stocks with report that first-year premium of life insurance companies posted nearly 23 per cent year-on-year (Y-o-Y) growth in the April-June period of the current financial year (FY25), tracking healthy double-digit growth among the public and private sector insurers

Finally, the BSE Sensex rose 391.26 points or 0.49% to 80,351.64, and the CNX Nifty was up by 112.65 points or 0.46% points to 24,433.20. 

The BSE Sensex touched high and low of 80,397.17 and 79,998.56 respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.36%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Auto up by 2.17%, Consumer Durables up by 2.01%, Realty up by 1.23%, Consumer Discretionary up by 1.21% and FMCG up by 1.06%, while Telecom down by 0.44%, Energy down by 0.14%, Capital Goods down by 0.11%, Oil & Gas down by 0.07% and TECK down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 6.60%, Mahindra & Mahindra up by 2.51%, ITC up by 2.09%, Sun Pharma up by 1.97% and Titan Company up by 1.96%. On the flip side, Reliance Industries down by 0.69%, Kotak Mahindra Bank down by 0.61%, Bajaj Finance down by 0.44%, JSW Steel down by 0.39% and Tata Steel down by 0.29% were the top losers.

Meanwhile, Rating agency Crisil in its latest report has said that securitisation volume rose to Rs 45,000 crore in the first quarter of the current fiscal (Q1FY25), marking around 17% on-year, like-to-like growth (adjusted for the exit of a large HFC and regulatory measures on gold loan securitisation). Over 95 originators, including NBFCs and banks, tapped the market to diversify funding sources, compared with around 80 in previous fiscal. Banks were also more active in the market as originators, with transaction volumes reaching around Rs 8,500 crore in the first quarter itself against around Rs 10,000 crore for the entire fiscal 2024.

The report stated that in terms of asset classes, the share of vehicle loan securitisation (including commercial vehicles and two-wheelers) in overall first-quarter volume surged 400 basis points (bps) year-on-year to around 41%, with continuing credit growth momentum among top NBFC originators. Share of mortgage-backed securitisation fell 900 bps to around 25% in line with the HFC exit, and regulatory measures on gold loan securitisation led to their share falling to negligible levels compared with around 7% in the first quarter of last fiscal. Microfinance accounted for around 14% against 10%, and other asset classes increased their share significantly by 800 bps to around 20%. These consisted of personal loan (11%) and business loan securitisation (9%).

According to the report, among the two routes of securitisation, pass-through certificates (PTCs) accounted for a higher share of around 53% against direct assignments (DAs) at around 47%. While PTCs dominated vehicle and personal loan securitisation, DAs accounted for majority of mortgage, microfinance, and business loan securitisation. Banks continue to be the major investors with over 90% market share in the overall securitisation market. While public sector banks increased their investment activity last quarter through acquisition of retail DA pools to grow their loan books, private and foreign banks predominantly invested in PTCs. NBFCs and other investors such as alternative investment funds, insurers and high net-worth individuals/family offices made up the rest.

The CNX Nifty traded in a range of 24,443.60 and 24,331.90. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 6.52%, Divi's Lab up by 2.37%, Mahindra & Mahindra up by 2.23%, Titan Company up by 1.89% and Hindalco Industries up by 1.86%. On the flip side, Reliance Industries down by 0.80%, Tata Consumer Product down by 0.76%, Bajaj Finance down by 0.61%, ONGC down by 0.60% and Kotak Mahindra Bank down by 0.44% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 7.29 points or 0.09% to 8,186.20, France’s CAC fell 54.11 points or 0.71% to 7,573.34 and Germany’s DAX lost 67.63 points or 0.37% to 18,404.42.

Asian markets settled mostly higher on Tuesday as traders were awaiting the Federal Reserve Chair Jerome Powell's testimony and key US consumer and producer price inflation figures due this week, that could provide cues on monetary policy path. Meanwhile, big US banks like JPMorgan, Citigroup and Wells Fargo due to report their quarterly results on Friday. Japanese shares gained as chip-related shares leading the surge. Moreover, Chinese shares rose ahead of one of the country's biggest annual policy meetings. However, Hong Kong shares declined marginally ahead the release of Chinese inflation data.