Benchmarks close at new record closing highs on Monday

Indian equity benchmarks closed at new record closing high levels on Monday driven by positive expectations from the upcoming Union Budget, robust FII inflows, and better-than-expected results from the IT sector. Markets made a positive start and remained higher during the day, as traders took support with investment data from the National Securities Depository showing that the Foreign Portfolio Investment (FPI) in the Indian equity market increased by Rs 7,390 crore during the second week of July. The data also pointed out that the net investment by Foreign Portfolio Investors (FPIs) in July has increased to Rs 15,352 crore. Traders got encouragement as the government data showed that the industrial output growth surprised in May rising to a seven month high of 5.9 percent from 5 percent in the previous month, as manufacturing and electricity production soared. Some optimism also came as income tax department said India's net direct tax collections grew 19.54 percent to Rs 5.74 lakh crore till July 11 in the current financial year as compared to Rs 4.80 lakh crore in FY24 in the corresponding period.

Sentiments remained positive in late afternoon deals, taking support from Commerce and Industry Minister Piyush Goyal’s statement that India's exports have recorded healthy growth in May and remained in the positive zone in June and the first quarter of the current fiscal despite global challenges. He also said that growth in the services sector is helping the country's outbound shipments to register positive growth rates. However, gains remained capped as some cautiousness came in after India’s retail inflation rose to four-month high of 5.08 percent in June compared with 4.75 percent in the previous month as food inflation galloped to 9.4 percent given the impact of heatwave on vegetables. Besides, wholesale inflation rose to a 16-month high of 3.4 percent in June, compared with 2.6 percent in the previous month. Wholesale food inflation was up 8.7 percent compared with 7.4 percent in the previous quarter.

On the global front, European markets were trading lower as a cautious undertone prevailed as an attempt on former U.S. President Donald Trump's life injected fresh uncertainty into an already tumultuous presidential campaign. Asian markets settled mostly higher on Monday amid rising prospects of an interest rate cut by the US Fed as early as September after data showed an unexpected drop in US consumer price inflation in the month of June. 

Back home, on the sectoral front, auto stocks were in focus as latest SIAM data showed that automobile exports from India rose 15.5 per cent year-on-year in the June quarter with all verticals, barring three-wheelers, recording growth in shipments. Overall shipments stood at 11,92,577 units in the first quarter the current fiscal year, as compared with 10,32,449 units in the same period of the last fiscal. There were some reaction in port and shipping sector stocks as the Union Ministry of Ports, Shipping, and Waterways (MoPSW) approved a research proposal on Valorization of Dredged Sediments. According to a statement by the ministry on Saturday, the project has been sanctioned at an estimated cost of Rs 46,47,380. 

Finally, the BSE Sensex rose 145.52 points or 0.18% to 80,664.86, and the CNX Nifty was up by 84.55 points or 0.35% points to 24,586.70. 

The BSE Sensex touched high and low of 80,862.54 and 80,556.97 respectively. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.95%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.32%, Energy up by 1.61%, PSU up by 1.42%, Realty up by 1.40% and Utilities up by 1.09%, while IT down by 0.20%, Capital Goods down by 0.12%, Industrials down by 0.07% and TECK down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.55%, NTPC up by 2.23%, Ultratech Cement up by 1.98%, Mahindra & Mahindra up by 0.96% and ITC up by 0.83%. On the flip side, Asian Paints down by 1.44%, Tata Steel down by 1.13%, Axis Bank down by 0.77%, JSW Steel down by 0.44% and Tech Mahindra down by 0.43% were the top losers.

Meanwhile, Central Board of Direct Taxes (CBDT) in its latest data has showed that net direct tax collection grew 19.54 per cent to over Rs 5.74 lakh crore so far this fiscal on higher advance tax payment by corporates. The first instalment of advance tax, which was due on June 15, rose 27.34 per cent to Rs 1.48 lakh crore. This includes Corporation Income Tax (CIT) at Rs 1.14 lakh crore and Personal Income Tax (PIT) at Rs 34,470 crore.

CBDT stated that the net direct tax collection of Rs 5,74,357 crore (as of July 11, 2024) includes CIT at Rs 2,10,274 crore and PIT at Rs 3,46,036 crore. Securities Transaction Tax (STT) contributed Rs 16,634 crore to the direct tax collection. During the same period last year, net direct tax collection was Rs 4,80,458 crore.

It further said refunds amounting to Rs 70,902 crore have also been issued in FY25 till July 11, which is 64.4 per cent higher than refunds issued during the same period in the previous year. For April-July 11, gross collection of direct taxes (before adjusting for refunds) stood at Rs 6.45 lakh crore compared to Rs 5.23 lakh crore in the year-ago period, showing a growth of 23.24 per cent. For full fiscal year, the interim budget has pegged direct tax collection at Rs 21.99 lakh crore.  

The CNX Nifty traded in a range of 24,635.05 and 24,522.75. There were 34 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were ONGC up by 5.18%, SBI Life Insurance up by 2.95%, Shriram Finance up by 2.88%, SBI up by 2.71% and Bajaj Auto up by 2.58%. On the flip side, LTIMindtree down by 1.63%, Asian Paints down by 1.34%, Grasim Industries down by 1.33%, Tata Steel down by 0.94% and Axis Bank down by 0.67% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 21.04 points or 0.25% to 8,231.87, France’s CAC fell 38.75 points or 0.5% to 7,685.57 and Germany’s DAX lost 41.19 points or 0.22% to 18,706.99.

Asian markets settled mostly higher on Monday tracking Wall Street’s gains last Friday, and despite bets that Donald Trump will win the upcoming presidential election after an assassination attempt on his life Saturday. Seoul shares gained slightly ahead of Fed Chair Jerome Powell's speech, US retail sales figures and Eurozone inflation data. Chinese shares rose after the central bank left its medium-term lending rate unchanged, as expected, at 2.5%, while investors were watching the third plenum meeting in China for measures to help revive the slumping property market and address huge local government debts. However, Hong Kong shares declined after China reported that its economy expanded at a lower-than-forecast 4.7% annual pace in the last quarter. Japanese market was closed for Marine Day holiday.