Post Session: Quick Review

Indian markets went on roller coaster ride on Thursday amid weekly F&O expiry. Volatility occurred during the day ahead of the RBI policy meeting outcome tomorrow. In first half of the session, indices traded just below neutral lines. However, in second half of the session markets gained traction and touched their high levels. As for broader indices, the BSE Mid cap index and Small cap index ended in green. 

Markets made positive start with foreign institutional investors (FIIs) continuing to buy Indian equities for the second day in a row, albeit at a slower pace, amid strength in the US markets. Foreign institutional investors (FIIs) extended their buying on second day as they bought equities of Rs 1,797 crore on December 4. However, markets failed to hold their gains and turned negative. Some pessimism came after World Bank International Debt Report noted that India's total external debt has increased by $ 31 billion to $ 646.79 billion in 2023. The report further said that interest payment increased from $ 15.08 billion in 2022 to $ 22.54 billion in 2023. But, in afternoon session indices erased all their early losses and entered into green. Some support came as Organisation for Economic Co-operation and Development (OECD) said that India will continue to grow at near 7 percent growth rates over the next two years, as strong investment and recovery in farm output help sustain the momentum. In late afternoon session, markets came off from day’s high levels but soon recovered some losses and ended in green.

On the global front, European markets were trading higher as President Emmanuel Macron seeks a way out of France's political crisis. Prime Minister Michel Barnier is expected to resign later today after being ousted in a no-confidence vote over a budget dispute. That makes him the shortest serving prime minister in modern French history. Asian markets settled mostly higher tracking Wall Street’s gains overnight following positive comments by US Federal Reserve Chair Jerome Powell on the growth and inflation outlook. Back home, Chief economic advisor V Anantha Nageswaran on December 5 revealed that deregulation is going to be major theme of the upcoming Economic Survey. Nageswaran said that deregulation is required at the state and local governments level to boost the participation of female workforce.

The BSE Sensex ended at 81,765.86, up by 809.53 points or 1.00% after trading in a range of 80,467.37 and 82,317.74. There were 27 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.16%. (Provisional)

The top gaining sectoral indices on the BSE were TECK up by 1.92%, IT up by 1.81%, Telecom up by 0.95%, Bankex up by 0.68% and Consumer Durables was up by 0.66%, while Realty was down by 0.30% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 2.39%, Infosys up by 2.33%, Titan Company up by 2.23%, Bharti Airtel up by 1.95% and Bajaj Finance up by 1.78%. On the flip side, NTPC down by 0.82%, Asian Paints down by 0.30% and Indusind Bank down by 0.10% were the few losers. (Provisional)

Meanwhile, Organisation for Economic Co-operation and Development (OECD) its new economic outlook has projected that India’s Gross Domestic Product (GDP) growth to be steady at just under 7% per year over 2024-2026, led by fixed investment, notably in manufacturing, amid rapid increases in public infrastructure spending. It also said GDP is expected to grow by 6.8% in fiscal year (FY) 2024-25. Strong investment is the main driver of this robust performance, with accelerating public infrastructure outlays. Vigorous credit growth is supporting private investment. Farm output is recovering as an above-normal monsoon is lifting rural incomes, and will soon ease food prices and inflation. Export growth is projected to pick up slightly, but could be weaker, given ongoing global tensions.

Annual private consumption growth also is projected to remain strong at around 6%, so long as inflation eases. However, external demand will provide less support in the future, as past gains in both export performance and the terms of trade diminish. Inflation is expected to drop back to the 4% official target by 2026. The current account will remain in a small and easily financeable deficit.

The main macroeconomic risks come from abroad, notably a weaker economic environment and higher commodity import prices, associated with a worsening global geopolitical environment or greater protectionism. Competitiveness losses from comparatively less favourable tariff treatment in export markets could also prove more harmful. Domestically, financial risks associated with small retail investor exuberance and booming derivatives trading have increased. On the other hand, India’s strong position in technology services or greater utilisation of potential female labour resources could underpin even faster growth than projected.

The CNX Nifty ended at 24,708.40, up by 240.95 points or 0.98% after trading in a range of 24,295.55 and 24,857.75. There were 41 stocks advancing against 9 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 2.52%, Infosys up by 2.41%, Titan Company up by 2.28%, Trent up by 2.14% and Dr. Reddy's Lab up by 2.00%. On the flip side, SBI Life down by 1.43%, Bajaj Auto down by 1.19%, HDFC Life Insurance down by 1.09%, NTPC down by 0.97% and Grasim Industries down by 0.39% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 7.96 points or 0.1% to 8,343.77, France’s CAC rose 26.34 points or 0.36% to 7,329.62 and Germany’s DAX was up by 52.3 points or 0.26% to 20,284.44. 

Asian markets settled mostly higher on Thursday tracking Wall Street’s gains overnight following positive comments by US Federal Reserve Chair Jerome Powell on the growth and inflation outlook, while release of some weaker-than-expected US private sector employment and service sector activity data also contributed to optimism about interest rates outlook. Although, geopolitical concerns in the Middle East and Ukraine as well as the political crises in South Korea and France have limited further gains. Chinese shares gained ahead of upcoming annual policy meeting that could roll out new stimulus measures. Japanese shares rose modestly as technology shares tracked their US peers higher, but the Japanese yen saw modest gains on hopes that the Bank of Japan will raise interest rates for the third time this year. Seoul shares extended losses from the previous session as investors remained worried over political turmoil after President Yoon Suk Yeol's short-lived attempt at martial law.