Post Session: Quick Review

Indian equity benchmarks concluded Tuesday’s trade slightly in red as traders were cautious ahead of Index of industrial production (IIP) and Consumer Price Index (CPI) data, which going to be out on Friday. During the day, markets touched new high levels ahead of Lok Sabha elections. The phased-wise Lok Sabha elections will start on April 19 and conclude on June 1, 2024. As for broader indices, the BSE Mid cap index and Small cap index ended in red. Buying were witnessed in Metal and banking sectors’ stocks, while selling was seen in Energy sector’s stocks.

Indices made optimistic start and widened their gains amid firm cues from other Asian markets. Traders got support with report that pointing out the sustained growth of the Indian economy over the past decade, European Parliament think tank expert, Angelos Delivorias said that India's GDP growth exceeding that of China reflects New Delhi's emergence as a formidable economic powerhouse in the global arena. Delivorias stated ‘India has surpassed the growth rate of China, and experts think that it will continue doing so, at least in the short term.’ Traders took a note of private report that India's consumer price inflation likely eased to a five-month low of 4.91% in March but was still above the Reserve Bank of India's 4% medium-term target as food price rises persist. Markets continued to trade higher in afternoon session as sentiments remained positive with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the recent wave of financial market reforms spearheaded by the RBI are geared towards establishing a robust foundation for addressing the burgeoning funding needs of the economy, providing cost-effective hedging alternatives, and enhancing competitiveness in global markets. Besides, private report stated that India is expected to see a normal monsoon in 2024. Monsoon rains are expected to be 102% of the long-period average of 868.6 mm for the four-month period. However, markets failed to protect their gains and entered into red in late afternoon session as traders booked their profits.

On the global front, European markets were trading mostly in red as ceasefire talks between Israel and Gaza stalled, and more Federal Reserve officials warned about upside risks to inflation. Asian markets ended mostly in green amid investors looked ahead to crucial U.S. inflation data, the minutes of the Fed's March policy meeting and the ECB rate decision for directional cues. Back home, Rating agency ICRA in its latest report has said that revenue of Indian road logistics industry will remain range-bound and grow at a slower pace of 3-6 per cent in the current financial year (FY25). It said operating profit margins are expected to remain range-bound at 10.5-12.5 per cent in FY25 as concerns on cost inflation persist.

The BSE Sensex ended at 74,683.70, down by 58.80 points or 0.08% after trading in a range of 74,603.37 and 75,124.28. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.47%, while Small cap index was down by 0.15%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 0.53%, Realty up by 0.50%, Bankex up by 0.34%, Healthcare up by 0.17% and Basic Materials was up by 0.17%, while Consumer Durables down by 1.10%, Energy down by 0.71%, FMCG down by 0.57%, Industrials down by 0.55% and Capital Goods was down by 0.48% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 1.81%, Infosys up by 1.19%, Bajaj Finserv up by 1.00%, Tata Steel up by 0.48% and Axis Bank up by 0.38%. On the flip side, Titan Company down by 1.70%, Reliance Industries down by 1.38%, Asian Paints down by 1.26%, Indusind Bank down by 1.12% and Ultratech Cement down by 0.92% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) in its Monetary Policy Report April 2024 has said frequent weather shocks caused by climate change pose challenges for the monetary policy as well as downside risks to economic growth. It said global average temperatures are on a rise, with accompanying increase in extreme weather events (EWE), and the economic and social impact of global warming is becoming increasingly evident.

It stated that climate change has increased the frequency and ferocity of weather shocks, posing challenges for monetary policy. It said there are different channels through which climate change can affect monetary policy. Climate change directly impacts inflation through adverse weather events affecting agricultural production and global supply chains, climate change could impact the natural rate of interest, and the after-effects of climate change might weaken the transmission of monetary policy actions to financing conditions faced by households and firms.

The report said ‘For these reasons, central banks are increasingly incorporating climate risks explicitly into their modelling frameworks.’ In the absence of any climate mitigation policies, the long-term output will be lower by around 9 per cent by 2050 vis--vis a no climate change scenario with full pass-through of the physical risks of climate change to the economy. It mentioned lower productivity may lead to a fall in the natural rate of interest. Frequent shocks to inflation will, however, necessitate tighter monetary policy even with a lower natural rate of interest. Besides, it stressed that frequent weather-related disturbances due to climate change pose downside risks to the baseline growth path.

The CNX Nifty ended at 22,642.75, down by 23.55 points or 0.10% after trading in a range of 22,612.25 and 22,768.40. There were 18 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Apollo Hospital up by 3.13%, Hindalco up by 2.05%, ICICI Bank up by 1.83%, Bajaj Finserv up by 1.26% and Infosys up by 1.23%. On the flip side, Titan Company down by 1.86%, Coal India down by 1.69%, Hero MotoCorp down by 1.60%, Reliance Industries down by 1.50% and Asian Paints down by 1.21% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC fell 48.01 points or 0.59% to 8,071.29 and Germany’s DAX was down by 114.52 points or 0.63% to 18,204.45. On the flip side, UK’s FTSE 100 was up by 9.82 points or 0.12% to 7,953.29.

Asian markets settled mostly higher on Tuesday as investors looked ahead to crucial US inflation data, the minutes of the Fed's March policy meeting, commentary from Fed officials, and the ECB rate decision for cues about the Fed’s rate cut plans in the year ahead. Chinese shares gained marginally ahead of key inflation and trade data due this week. Japanese shares gained led by chip-related stocks, while the yen’s ongoing weakness against the US dollar supported exporter issues. Hong Kong shares gained after Chief Executive John Lee Ka-chiu said the authorities were considering additional measures to bolster the securities market. However, Seoul shares declined ahead of parliamentary elections and the Bank of Korea's rate decision. Indonesian market was closed for Id-Ul-Fitr (Ramadan Eid).