Benchmarks end sharply lower on Friday

Indian equity benchmarks ended sharply lower on Friday amid selling pressure in key index heavyweights namely – Larsen & Toubro, Maruti Suzuki and Nestle. Markets made a positive start as traders got support after the Organisation for Economic Co-operation and Development (OECD) raised its growth forecast for India by 40 basis points to 6.6 per cent for 2024-25, holding that buoyant public investment and improved business confidence are expected to propel India’s gross domestic product (GDP) growth. Some support also came with a private report that the stock market reflects India’s ascendance as an economic superpower with premium valuations, but challenges remain for inclusive growth. As per the report, over the past decade, India has steadily climbed the ranks of global economies, transitioning from the tenth to the fifth largest economy in the world. 

However, key gauges wiped out early gains and slipped into negative territory in morning deals, as traders turned cautious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold Rs 964.47 crore shares on May 2, 2024. Markets extended losses in afternoon deals, as sentiments remained down-beat with Reserve Bank data showing that India's services exports declined 1.3 per cent in March to $30 billion while imports fell by 2.1 per cent to $16.61 billion. As per RBI's data on India's international trade in services, the trade surplus during March 2024 was $13.4 billion. Meanwhile, economic think tank GTRI in its report said India's imports of electronics, telecom, and electrical products soared to $89.8 billion in 2023-24 and over half of these imports are sourced from China and Hong Kong. 

On the global front, European markets were trading higher as a slew of encouraging earnings updates and signs of improvement in U.K. services growth also helped underpin investor sentiment. The final data from S&P Global showed the U.K. service sector expanded at the quickest pace in nearly a year, spurred by a renewed strengthening of order books. Asian markets settled mostly higher on Friday, amid a global rally as traders pulled forward expectations for the Federal Reserve's first interest-rate cut by a month to November.

Finally, the BSE Sensex fell 732.96 points or 0.98% to 73,878.15 and the CNX Nifty was down by 172.35 points or 0.76% points to 22,475.85.

The BSE Sensex touched high and low of 75,095.18 and 73,467.73 respectively. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.21%, while Small cap index was down by 0.55%.

The few gaining sectoral indices on the BSE were Metal up by 0.81%, Healthcare up by 0.15% and PSU up by 0.12%, while Telecom down by 1.42%, Capital Goods down by 1.18%, Realty down by 1.09%, TECK down by 0.96% and Oil & Gas down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 0.75%, Bajaj Finserv up by 0.69%, Mahindra & Mahindra up by 0.21%, ICICI Bank up by 0.18% and SBI up by 0.18%. On the flip side, Larsen & Toubro down by 2.74%, Maruti Suzuki down by 2.37%, Nestle down by 2.22%, Reliance Industries down by 2.17% and Bharti Airtel down by 2.03% were the top losers.

Meanwhile, Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook on the construction sector for FY25, while maintaining a deteriorating sub-sector outlook for roads engineering, procurement and construction (EPC). 

According to the rating agency, EPC players are likely to post a healthy performance in FY25, albeit with a moderation in the revenue growth rate, accompanied with a modest uptick in operating margins while maintaining adequate liquidity buffers.

Krishan Binani, Director, Corporate Ratings, Ind-Ra said that the neutral sector outlook is backed by an expectation of 10%-12% year on year (YoY) revenue growth in FY25. Order inflows are likely to pick up in H2 FY25, led by supportive government budgets along with expectation of acceleration of private sector’s capex. He also noted that margins are expected to modestly pick-up with credit metrics improving further.

The CNX Nifty traded in a range of 22,794.70 and 22,348.05. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Coal India up by 4.76%, Grasim Industries up by 1.54%, ONGC up by 1.17%, Apollo Hospitals Enterprise up by 0.93% and Hindalco up by 0.72%. On the flip side, Larsen & Toubro down by 2.76%, Maruti Suzuki down by 2.55%, Nestle down by 2.24%, Reliance Industries down by 2.12% and Bharti Airtel down by 2.00% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 39.04 points or 0.48% to 8,211.19, France’s CAC rose 50.75 points or 0.64% to 7,965.40 and Germany’s DAX gained 85.57 points or 0.48% to 17,982.07.

Asian markets settled mostly higher on Friday, tracking Wall Street gains overnight with tech shares leading the charge following Apple's quarterly earnings beat and massive buyback program. Meanwhile, traders pulled forward expectations for the Federal Reserve’s first full interest-rate cut by a month to November ahead of a key US jobs data report later in the day. Hang Seng shares gained on improved market sentiments as China stepped up efforts to boost the economy. But regional trading volumes were thin due to market holidays in China and Japan.