Post Session: Quick Review

Indian equity benchmarks plunged deep into the red on Friday, weighed down by weak global cues. Markets made a gap-down opening and remained under pressure during the morning session, as traders were cautious after Israel launched an airstrike on Iran and declared a special state of emergency, raising fears of oil supply disruption. However, market came off from day’s low points, but closed in negative territory. 

Some of the important factors in today’s trade:

Foreign fund outflow: Foreign fund outflows dented the domestic sentiments. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,831.42 crore on Thursday, according to exchange data. 

Retail inflation eases to six-year low of 2.82% in May: Traders overlooked India’s positive inflation data. India’s inflation rate based on the Consumer Price Index (CPI) declined to 2.82 per cent in May this year compared to the same month of the previous year. This is the lowest level of retail inflation since February 2019.

China on lifting export curbs on rare earth metals to India: Traders took a note of report that China has hinted at holding talks with India over its restrictions on export of rare earth materials, saying it is willing to enhance dialogue and cooperation with relevant countries to keep industrial supply chains stable.

Global front: European markets were trading in red, while Asian markets ended in red after Israel conducted 'pre-emptive' strikes on Iran; targeting several nuclear and military assets. Israel also declared a state of emergency in anticipation of a missile and drone strike by Tehran and said it has begun intercepting Iranian drones.

The BSE Sensex ended at 81118.60, down by 573.38 points or 0.70% after trading in a range of 80354.59 and 81238.68. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.32%, while Small cap index down by 0.30%. (Provisional)

The few gaining sectoral indices on the BSE were Realty up by 0.13% and Healthcare up by 0.08%, while Bankex down by 1.01%, FMCG down by 0.94%, Utilities down by 0.91%, Metal down by 0.81% and Power down by 0.75% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharat Electronics up by 1.89%, Tech Mahindra up by 1.02%, TCS up by 0.36%, Sun Pharma up by 0.23% and Maruti Suzuki up by 0.16%. On the flip side, Adani Ports and Special Economic Zone down by 2.61%, ITC down by 1.67%, SBI down by 1.49%, HDFC Bank down by 1.15% and Titan Company down by 0.95% were the top losers. (Provisional)

Meanwhile, commerce and Industry Minister Piyush Goyal has said that India is open to mutually beneficial arrangements on implementing norms related quality standards with its trusted trading partners. He said India is implementing QCOs (quality control orders) to promote manufacturing of quality goods in the country. He stated the rules, standards, and process are the same for domestic as well imported goods and India does not discriminate between domestic manufacturers and foreign suppliers. Moreover, he said that equal treatment is given to companies of all the countries.

He stated ‘We are open to suggestions. We are in dialogue with several nations on a mutual benefit basis and a mutual recognition basis, if other nations are willing to respect the high quality goods that India makes and allow us to do our own certification process. We are happy to allow our trusted partners to do the same.’ He added that all such relationships will be based on mutual respect for each other's regulations.

The US and the EU, among others, have raised issues pertaining to these QCOs. The EU has sought simpler certification processes under these orders. QCOs are designed to prevent the import of substandard goods and ensure consumer access to high-quality products. The number of products under QCO coverage has witnessed a significant jump from 106 in 2014 to over 732 products by October 2024. The move aligns with India's broader strategy to enhance domestic manufacturing standards while curbing the influx of low-quality imports.

The CNX Nifty ended at 24718.60, down by 169.60 points or 0.68% after trading in a range of 24473.00 and 24754.35. There were 9 stocks advancing against 40 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were Bharat Electronics up by 1.76%, ONGC up by 1.46%, Tech Mahindra up by 0.95%, Wipro up by 0.37% and TCS up by 0.33%. On the flip side, Adani Ports and Special Economic Zone down by 2.72%, ITC down by 1.69%, SBI down by 1.69%, Indusind Bank down by 1.57% and Adani Enterprises down by 1.48% were the top losers. (Provisional)

European markets were trading lower; Germany’s DAX lost 328.57 points or 1.38% to 23,442.88, France’s CAC fell 83.27 points or 1.07% to 7,681.84 and UK’s FTSE 100 decreased 36.34 points or 0.41% to 8,848.58.

Asian markets settled down on Friday as participants trimmed positions, despite Wall Street’s gains overnight followed by data showing that producer price inflation rose less than expected in May. Market sentiments weakened further after Israel launched unprecedented strikes on Iran, targeting several nuclear and military assets. Israel also declared a state of emergency in anticipation of a missile and drone strike by Tehran and said it has begun intercepting Iranian drones. Japanese shares declined, hit by exporters and tech stocks, and as the yen strengthened.