Post Session: Quick Review

Indian equities witnessed downturn on Wednesday. Investors opted for profit booking after hitting record highs in yesterday’s session. In early trade, indices break out in green but further entire day spent in red as investors maintained risk-averse approach ahead of India's Consumer Price Index (CPI). Uncertainty over potential interest rate cuts by the US Federal Reserve this year also weighed on the markets. 

Markets made slightly positive start but unable to protect their gains and entered into red following the mixed cues from Wall Street overnight coupled with mixed cues from Asian counterparts. Traders were concerned with a private report stating that India consumer price inflation probably edged up in June, snapping five months of declines, largely because of a jump in vegetable prices caused by the damage to crops wrought by extreme weather. Traders paid no heed towards global rating agency, Moody’s report in which it kept India’s 2024 growth forecast unchanged at 6.8 percent from its March forecast. The rating firm predicted Indian economy to grow 6.4 percent in 2025. It said increasing domestic and overseas demand is supporting GDP growth in emerging markets (EMs), with wide variation by country. Markets continued to sag under weakness in afternoon session amid a wave of profit booking among investors. Investors overlooked Reserve Bank of India (RBI) deputy governor Swaminathan J’s statement that the banking sector, which is at a decadal high in terms of financial parameters, is all set to support the growth of the Indian economy. In late afternoon session, markets pared some of their losses with Nifty and Sensex settled below the psychological 24,350 and 80,000 levels respectively.

On the global front, European markets were trading higher after Federal Reserve Chair Jerome Powell suggested the case for interest-rate cuts is becoming stronger due to slowing inflation. The closely watched monthly U.S. inflation report is due on Thursday. Asian markets ended mostly in green as bolstering the case for monetary policy easing, China's consumer prices increased less than expected in June and producer prices continued to decline. The consumer price index logged an annual increase of 0.2 percent in June, following a 0.3 percent gain in May. Prices were forecast to climb 0.4 percent. On a monthly basis, consumer prices dropped 0.2 percent after easing 0.1 percent in May. Back home, rating agency Icra in its latest report has said that the momentum in air passenger traffic is expected to continue and airlines' net loss is projected to be Rs 3,000-4,000 crore in the year ending March 2025 (FY25), both trends similar to the previous financial year.

The BSE Sensex ended at 79,924.77, down by 426.87 points or 0.53% after trading in a range of 79,435.76 and 80,481.36. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.19%, while Small cap index was down by 0.69%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 0.69%, Power up by 0.51%, Healthcare up by 0.33%, FMCG up by 0.15% and Oil & Gas was up by 0.10%, while Auto down by 1.65%, Metal down by 1.60%, IT down by 0.99%, Basic Materials down by 0.87% and Consumer Disc was down by 0.78% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 3.10%, Power Grid up by 1.53%, NTPC up by 1.22%, Adani Ports up by 0.71% and Bharti Airtel up by 0.68%. On the flip side, Mahindra & Mahindra down by 6.62%, Tata Steel down by 2.21%, TCS down by 2.05%, HCL Tech down by 1.58% and SBI down by 1.38% were the top losers. (Provisional)

Meanwhile, in a positive development, India and Russia have agreed to boost bilateral trade to over $100 billion by 2030 by reinvigorating investments, using national currencies for trade and increasing cooperations in sectors ranging from energy to agriculture and infrastructure. In the joint statement issued following the 22nd Annual Bilateral Summit between Russian President Vladimir Putin and Prime Minister Narendra Modi in Moscow, the two sides reiterated commitment to development of the special and privileged strategic partnership and vowed to give additional impetus to the deepening of bilateral interaction by promoting Russia-India trade and economic cooperation.

The two sides agreed on nine key areas of cooperations that spanned trade, trade settlement using national currencies, increased cargo turnover through new routes such as the North-South Transport Corridor, raising volume of trade in agri products, food and fertiliser, deepening cooperation in the energy sector, including nuclear energy, strengthening interaction for infrastructure development, promotion of investments and joint projects across digital economy, collaborating on supply of medicines and development of humanitarian cooperation.

The leaders agreed to aspire ‘for elimination of non-tariff trade barriers related to bilateral trade between India and Russia’ and continue ‘dialogue in the field of liberalisation of bilateral trade, including the possibility of the establishment of the EAEU-India Free Trade Area’. This to achieve mutually agreed trade volume of more than $100 billion by 2030, including increased supplies of goods from India to achieve balanced bilateral trade. Also, reinvigoration of investment activities within the framework of the special investment regimes was agreed. They agreed on development of a bilateral settlement system using national currencies. This means any purchase by India from Russia such as crude oil, can potentially be paid in Indian rupee. This currency can then be used by Russia to settle payments for imports from India. A vice-versa use of Russian rubles is also possible.

It said the two leaders agreed for “increase of cargo turnover with India through the launch of new routes of the North-South International Transport Corridor, the Northern Sea Route and the Chennai-Vladivostok Sea Line, and added that optimisation of customs procedures through the application of intelligent digital systems for barrier-free movement of goods was also agreed. They were for raising the volume of bilateral trade in agricultural products, food and fertilisers as well as maintenance of an intensive dialogue aimed at removing veterinary, sanitary and phytosanitary restrictions and prohibitions. The two sides agreed to strengthen interaction in the fields of infrastructure development, transport engineering, automobile production and shipbuilding, space and other industrial sectors. They also agreed for facilitation of the creation of new joint (subsidiary) companies by providing them with favourable fiscal regimes.

The CNX Nifty ended at 24,324.45, down by 108.75 points or 0.45% after trading in a range of 24,141.80 and 24,461.05. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 3.15%, SBI Life up by 2.23%, Divi's Lab up by 1.87%, Britannia up by 1.53% and HDFC Life Insurance up by 1.46%. On the flip side, Mahindra & Mahindra down by 6.61%, Tata Steel down by 2.22%, Hindalco down by 1.94%, TCS down by 1.92% and Hero MotoCorp down by 1.44% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 46.4 points or 0.57% to 8,186.21, France’s CAC rose 63.27 points or 0.84% to 7,571.93 and Germany’s DAX was up by 133.63 points or 0.73% to 18,369.82.

Asian markets settled mostly higher on Wednesday, with expectations that the US central bank will cut its main interest rate as soon as September. Investors are awaiting US inflation data later this week and the second round of testimony by Federal Reserve Chair Jerome Powell for further cues on potential interest rate cuts. But, in testimony Tuesday before the Senate Banking Committee, Powell reiterated that while inflation has eased in recent months, a rate cut is not appropriate until the central bank has greater confidence that it is headed towards the 2% target. Japanese shares gained on a weaker yen that helps exporters and tracking strong gains in technology shares as Nvidia supplier TSMC's sales surged past expectations on AI infrastructure demand. However, Chinese shares declined after data showed consumer inflation in the country slipped to 0.2% in June from 0.3% in May, while producer prices posted an annual fall of 0.8% in June as expected and slower than the 1.4% fall in May.