Markets trade flat in volatile session; investors eye Powell’s Jackson Hole speech

Indian equity benchmarks made flat-to-positive start on Friday, but soon turned volatile and struggling for direction, amid mixed cues from global markets, ahead of the Kansas City Fed's Jackson Hole Economic Symposium, which gets underway later in the day. They look ahead to Fed Chair Jerome Powell's comments for further clarity about the outlook for interest rates. Sensex and Nifty are trading flat in early deals as buying in Auto and Capital Goods counters offset by selling in Consumer Durables and IT stocks. Some cautiousness came as a report by ICRA stated that GDP expansion is expected to moderate to a six quarter low of 6.0 per cent in Q1FY25 from 7.8 per cent in Q4FY24, amidst a contraction in Government capital expenditure and a dip in urban consumer confidence. It further added that the growth in the gross value added (GVA) is estimated to ease to 5.7 per cent in Q1FY25 from 6.3 per cent in Q4FY24. 

However, downside remained capped amid foreign fund inflows. As per NSE data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 1,371.79 crore. Some support came as the finance ministry, in the monthly economic report for July, maintained a positive stance on the economy, keeping the growth forecast at 6.5-7 per cent for the current financial year (2024-25/FY25) ahead of the release of gross domestic product (GDP) figures for the April-June quarter (Q1). On the sectoral front, cement industry stocks remained in focus as rating agency CRISIL said India’s cement makers are expected to invest capital expenditure (capex) worth Rs 1.25 trillion over FY25 to FY27. In stock specific development, Jain Irrigation Systems traded higher on MoU with Coffee Board of India.

The BSE Sensex is currently trading at 81043.47, down by 9.72 points or 0.01% after trading in a range of 80883.26 and 81231.49. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.20%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were Auto up by 0.72%, Capital Goods up by 0.41%, Power up by 0.40%, Utilities up by 0.32% and Energy up by 0.31%, while Consumer Durables down by 0.75%, IT down by 0.74%, TECK down by 0.61%, Realty down by 0.52% and Basic Materials down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.29%, Reliance Industries up by 0.73%, Sun Pharma Inds. up by 0.60%, Mahindra & Mahindra up by 0.58% and ICICI Bank up by 0.50%. On the flip side, Titan Company down by 1.44%, Infosys down by 1.00%, Ultratech Cement down by 0.75%, TCS down by 0.72% and Tata Steel down by 0.68% were the top losers.

Meanwhile, the Finance Ministry in its Monthly Economic Review for July has said that India's economic momentum remains intact despite a somewhat erratic monsoon, and real GDP growth of 6.5-7 per cent projected in the Economic Survey seems appropriate. According to the Monthly Review, the Indian economy has sustained its momentum in the first four months of FY25. It added Goods and Services Tax collections in the first four months of FY25 underwent a level shift pushed up by the widening of the tax base and heightened economic activity.

It said ‘The resilience of domestic activity is also reflected in the strong performance of the manufacturing and services sector purchasing managers' indices. The manufacturing growth has been driven by expansion in demand conditions, a rise in new export orders and growth in output prices’. On the fiscal front, it said, the Union Budget FY25 has laid out a glide path of fiscal consolidation. Supported by strong revenue collection, discipline in revenue expenditure, and robust economic performance, the fiscal deficit is projected to decline.

At the same time, it said, capital expenditure is maintained at high levels, supporting the fledgling private investment cycle. Retail inflation decreased to 3.5 per cent in July 2024, the lowest since September 2019, driven by moderation in food inflation, it said, adding that steady progress in the southwest monsoon has supported kharif sowing. It said replenishing water levels in the reservoir bodes well for the current kharif and upcoming rabi crop production and this will further aid in reducing food inflation in the coming months.

It said manufacturing and services sectors are expanding, according to the Purchasing Managers' indices. Tax collections, especially indirect taxes, which reflect transactions, are growing healthily, and so is bank credit. It said ‘Inflation is moderating, and exports of both goods and services are doing better than they did last year. Stock markets are holding on to their levels. Foreign direct investment is looking up as gross inflows are rising’. As of now, it said, the projection of real GDP growth of 6.5-7.0 per cent for FY25, made in the Economic Survey for 2023-24, seems appropriate.

The CNX Nifty is currently trading at 24816.60, up by 5.10 points or 0.02% after trading in a range of 24771.65 and 24858.40. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.89%, Hero MotoCorp up by 1.18%, Tata Motors up by 1.18%, Apollo Hospital up by 1.15% and Coal India up by 1.01%. On the flip side, Titan Company down by 1.56%, LTIMindtree down by 1.12%, Grasim Industries down by 1.09%, Wipro down by 0.92% and Infosys down by 0.83% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 131.62 points or 0.34% to 38,342.63, Jakarta Composite gained 62.9 points or 0.83% to 7,551.58, Shanghai Composite strengthened 7.96 points or 0.28% to 2,856.73 and Straits Times rose 5.06 points or 0.15% to 3,378.64. On the other hand, Hang Seng declined 71.62 points or 0.41% to 17,569.38, Taiwan Weighted lost 68.86 points or 0.31% to 22,079.97 and KOSPI dropped 0.80 points or 0.03% to 2,706.87.