Benchmarks end higher for fifth straight session

Rising for the fifth straight session, Indian equity benchmarks ended with gains of over half percent on Thursday led by buying in PSU, Metal and Healthcare stocks. Markets made a negative start and traded volatile during first half as traders remained cautious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 2,511.74 crore on April 24, 2024. Caution on eve of the expiry of April series derivative contracts also weighed on the sentiments. Some concern also came as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report stated that the demand for industrial credit from corporates with capex plans is expected to remain muted, due to strong cash flows, modular nature of investments and flexibility to tap equity markets.

However, in late afternoon session, markets staged a smart recovery from early morning lows and concluded the session near its day's peak, as traders found support with a private report that merger and acquisition (M&A) deal value soared by 60 per cent to $19.6 billion in January-March 2024. Sentiments remained positive with the Comprehensive Economic Partnership Agreement (CEPA) Council Director Ahmed Aljneibi’s statement that the trade between India and UAE increased 15 per cent since the implementation of the free trade agreement in May 2022 and the both are on track to surpass the target of $100 billion in non-oil trade by 2030. Adding to the optimism, RBI Monetary Policy Committee (MPC) member Ashima Goyal said the problem of high food inflation will be 'less severe' in India going ahead, as modern supply chains with diversified sources can help quickly address sudden spikes in prices of specific food items. 

On the global front, European markets were trading mostly in red as a disappointing earnings report from Facebook parent Meta Platforms gave way to caution ahead of earnings results from some of biggest and most important growth and tech companies in the U.S. Asian markets settled mostly lower on Thursday, as traders remained cautious ahead of the report on first quarter US GDP data that could have an impact on the outlook for interest rates. The Fed is widely expected to leave interest rates unchanged at next week's US Fed monetary policy meeting. 

Finally, the BSE Sensex rose 486.50 points or 0.66% to 74,339.44 and the CNX Nifty was up by 167.95 points or 0.75% points to 22,570.35.

The BSE Sensex touched high and low of 74,571.25 and 73,556.15 respectively. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.71%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were PSU up by 2.09%, Metal up by 1.16%, Healthcare up by 0.97%, Power up by 0.94% and Auto up by 0.91%, while Consumer Durables down by 0.45% and Realty down by 0.12% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 5.98%, SBI up by 5.10%, JSW Steel up by 2.55%, Nestle up by 2.39% and Sun Pharma up by 2.30%. On the flip side, Kotak Mahindra Bank down by 10.85%, Hindustan Unilever down by 1.25%, Titan Company down by 1.05%, Bajaj Finance down by 0.46% and Maruti Suzuki down by 0.31% were the top losers.

Meanwhile, RBI Monetary Policy Committee (MPC) member Ashima Goyal has said that the problem of high food inflation will be ‘less severe’ in India going ahead, as modern supply chains with diversified sources can help quickly address sudden spikes in prices of specific food items. Stressing that the share of food in the household budget is high in India, she said policy needs to focus on increasing agricultural productivity, since stable agricultural prices are important for non-inflationary growth. 

Goyal further pointed out that one does not hear of tomato or onion prices spiking in advanced economies. She said ‘we naturally have diverse geographic regions, better integrated markets sourcing from different regions can help mitigate climate change induced food price spikes’. Moreover, as the weight of food in consumption falls and food consumption itself becomes more diversified, the impact and size of future food price shocks falls. She said that under flexible inflation targeting, expectations get better anchored.

Besides, she said India unfortunately opted for a distorting system of subsidies to farmers as well as to consumers and given India's huge population this was very expensive and reduced the space for government investment in agriculture. She said it also kept inflation high as procurement prices rose each year. She added that agricultural productivity is finally rising supported by a policy reset, along with the availability of new technologies even though further policy adjustment is required.

The CNX Nifty traded in a range of 22,625.95 and 22,305.25. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 6.04%, SBI up by 5.03%, Dr. Reddy's Lab up by 5.03%, Nestle up by 2.47% and Hero MotoCorp up by 2.44%. On the flip side, Kotak Mahindra Bank down by 10.73%, LTIMindtree down by 1.90%, Hindustan Unilever down by 1.13%, Titan Company down by 1.10% and SBI Life Insurance down by 1.03% were the top losers.

European markets were trading mostly in red; France’s CAC fell 63.07 points or 0.78% to 8,028.79 and Germany’s DAX was down by 114.63 points or 0.63% to 17,974.07. On the flip side, UK’s FTSE 100 was up by 51.72 points or 0.64% to 8,092.1.

Asian markets settled mostly lower on Thursday, saddled by risk aversion ahead of key corporate earnings reports from various sectors and US Q1 GDP data. Reports that global economic slowdown and rising borrowing costs weighed down Asian business also raised investor woes. Japan's Nikkei plunged as yen fell to 34-year low rate ahead to Bank of Japan's monetary policy decision on Friday. Intensified bets over prompt intervention by central bank of Japan as the local currency hits 155 level also sidelined equity investors from major positions taking.