Key gauges end marginally higher amid volatility

Indian equity benchmarks, after a sharp rally in intra-day trade, trimmed most of their gains and settled marginally higher on Friday as traders awaited the U.S. non-farm payrolls report for more cues on the Federal Reserve's policy path. However, optimism surrounding a potential India-US trade deal, record high GST collection in April, and continuous foreign fund inflows supported the market sentiments. 

Some of the important factors in today’s trade:  

RBI rate cuts to impact key profitability indicator of banks in FY26: Crisil Ratings has said that the Reserve Bank of India’s rate cuts will lead to an up to 0.20 per cent slip in return on assets (RoA), a key profitability indicator, for banks in FY26. 

Sustain foreign fund inflows: As per provisional NSE data, on April 30, foreign institutional investors (FIIs) extended their buying streak to an eleventh straight session, purchasing Indian equities worth Rs 50 crore.  

Growth momentum in Indian manufacturing sector improves in April: The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) edged up marginally to 58.2 in April from 58.1 in March, marking the strongest improvement in the sector's health in ten months.

Monsoon forecast boosts farm sector, consumption: India Ratings and Research (Ind-Ra) said IMD's prediction of slightly above-than-normal monsoon in 2025 would push farm sector growth which along with monetary easing will help India withstand the adverse impact of reciprocal tariffs. 

Firm trend in global markets: European markets were trading higher as a flash estimate from Eurostat said the euro area's annual consumer inflation remained stable at 2.2% in April, matching market forecasts. Asian markets ended higher on Friday after China said it's evaluating the possibility of trade talks with the United States, raising hopes of trade war de-escalation. 

Finally, the BSE Sensex rose 259.75 points or 0.32% to 80,501.99, and the CNX Nifty was up by 12.50 points or 0.05% to 24,346.70.       

The BSE Sensex touched high and low of 81,177.93 and 80,168.59 respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.41%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.69%, Energy up by 0.57%, IT up by 0.45% and Bankex up by 0.14%, while Telecom down by 2.06%, Consumer Durables down by 1.66%, Power down by 0.96%, Utilities down by 0.93% and Metal down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &SEZ up by 4.11%, Bajaj Finance up by 2.62%, Indusind Bank up by 1.65%, SBI up by 1.51% and Maruti Suzuki up by 1.21%. On the flip side, Nestle down by 2.04%, NTPC down by 1.61%, Kotak Mahindra Bank down by 1.36%, Titan Company down by 1.09% and Power Grid Corporation down by 0.85% were the top losers.

Meanwhile, India's manufacturing sector growth improved in the month of April, with output increasing at the fastest pace since June 2024 on the back of another strong expansion in order books. Besides, total sales were supported by the second-fastest upturn in international orders since March 2011. This positive trend was accompanied by notable rises in employment and purchasing activity. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) surged to 58.2 in April as against 58.1 in March.

The report further noted that the substantial improvement in order book volumes occurred despite a marked increase in prices charged for Indian goods. The overall rate of inflation was the highest seen in 11-and-half years. Input prices rose at the fastest pace in four months during April, with firms mentioning higher building maintenance, labour, leather, paper, rubber, steel and transportation costs. That said, the rate of inflation was moderate and below that seen for selling charges. The strength of new order inflows also led to another accumulation of outstanding business. Although slight, the rate of increase was at a 15-month high.

Further, manufacturers continued to enhance their staffing levels in April to meet growing output requirements. Purchasing activity rose in tandem with new business growth, and the latest sharp expansion in input buying was also partly attributed to stock building initiatives. Input holdings increased to the greatest extent since August 2024. Conversely, post-production inventories fell at the quickest pace in nearly three-and-a-half years.

The CNX Nifty traded in a range of 24,589.15 and 24,238.50. There were 18 stocks advancing against 32 stocks declining on the index.    

The top gainers on Nifty were Adani Ports & SEZ up by 4.37%, Bajaj Finance up by 2.70%, Indusind Bank up by 1.44%, SBI up by 1.41% and Hindalco Industries up by 1.32%. On the flip side, JSW Steel down by 5.81%, Bajaj Auto down by 2.75%, Eicher Motors down by 2.50%, HDFC Life Insurance down by 2.31% and Hero MotoCorp down by 2.26% and were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 56.95 points or 0.67% to 8,553.75, France’s CAC rose 115.48 points or 1.5% to 7,709.35 and Germany’s DAX gained 366.39 points or 1.6% to 22,863.37.

Asian markets ended higher on Friday after China said it's evaluating the possibility of trade talks with the United States, raising hopes of trade war de-escalation. Hong Kong's Hang Seng index rallied with tech and EV stocks leading the surge fueled by speculation of a U.S.-China trade deal. Japanese markets rose sharply, with exporters rising on a weaker yen after the Bank of Japan trimmed its growth and inflation forecasts. Shares in Taiwan rose, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), after strong earnings from two major U.S. tech giants eased concerns about AI demand despite tariff disruptions under President Donald Trump. Chinese market remained closed for Labour Day.