Markets extend gains for 2nd session; Nifty settles above 22,450 mark

Indian equity benchmarks extended previous session's gains and ended higher on Friday, driven by gains in Consumer Durables, Auto and Realty stocks. Markets made a slightly positive start but soon turned cautious as persistent foreign fund outflow weighed on market sentiments. Foreign institutional investors continued to sell Indian equities, with net sales of Rs 776 crore worth of shares on May 16. However, markets gained momentum and then traded within a narrow range for whole day as traders took support with Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal’s statement that India will be a $4 trillion economy in 2024-25 and surpass Japan by early next fiscal to become the world's fourth largest economy. Some optimism also came as the United Nations revised upwards India's growth projections for 2024, with the country's economy now forecast to expand by close to seven per cent this year, mainly driven by strong public investment and resilient private consumption. 

Sentiments remained positive in late afternoon deals, taking support from Federation of Indian Export Organisations (FIEO) President Ashwini Kumar’s statement that the country's merchandise exports are expected to increase about $60-70 billion to $500 billion by the end of FY25 on account of gradual improvement in global demand. In 2023-24, exports dipped over 3 per cent to $437.1 billion. He also said the country's services exports are also likely to reach $390-400 billion this fiscal. Some support also came with a private report stating that India registered ‘very robust’ economic growth performance and has become an alternative investment destination for many western companies as ‘less and less’ foreign investment is going into China. Traders took note of credit rating agency Crisil’s report that the near-term challenge to India’s exports owing to the geopolitical uncertainties seems to have been limited so far but remains a key monitorable. However, gains remained capped as concerns over election results continued to weigh.

On the global front, European markets were trading lower, as interest-rate worries were back in focus after three Federal Reserve officials said the U.S. central bank should keep borrowing costs high for longer. Asian markets ended mostly higher on Friday, as China stimulus hopes offset interest-rate worries. Besides, China's industrial output grew 6.7 per cent year-on--year in April, accelerating from the 4.5 per cent pace seen in March, as the recovery in the manufacturing sector gathered pace. 

Finally, the BSE Sensex rose 253.31 points or 0.34% to 73,917.03, and the CNX Nifty was up by 62.25 points or 0.28% points to 22,466.10. 

The BSE Sensex touched high and low of 74,070.84 and 73,459.80 respectively. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.18%, while Small cap index was up by 1.39%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.41%, Auto up by 1.80%, Realty up by 1.68%, Consumer Discretionary up by 1.55% and Basic Materials up by 1.53%, while IT down by 0.74% and TECK down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.97%, JSW Steel up by 2.36%, Ultratech Cement up by 1.85%, Kotak Mahindra Bank up by 1.50% and ITC up by 1.24%. On the flip side, TCS down by 1.70%, HCL Technologies down by 1.11%, Hindustan Unilever down by 1.00%, Nestle down by 0.85% and Bajaj Finserv down by 0.73% were the top losers.

Meanwhile, credit rating agency, Crisil in its latest outlook report ‘Imports widen trade deficit’ has said that the near-term challenge to India’s exports owing to the geopolitical uncertainties seems to have been limited so far but remains a key monitorable. 

The rating agency further noted that barring this hiccup, forecasts of better trade growth this year by key multilateral organisations is encouraging news for the exports. Besides, it underlined that the current account remains in a safe zone with robust services trade surplus and healthy remittances.

Crisil also noted that India’s exports in April recorded positive growth in the face of the ongoing disruptions in global trade routes and uneven global growth. Imports, meanwhile, saw steeper growth, leading to a wider trade deficit.

Meanwhile, India's merchandise exports rose marginally by 1.06 per cent to $34.99 billion in April 2024, as against $34.62 billion during the same period last year. Healthy growth in sectors such as electronics, chemicals, petroleum products and pharmaceuticals has helped in registering positive growth in exports despite global economic uncertainties.

The CNX Nifty traded in a range of 22,502.15 and 22,345.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.83%, Grasim Industries up by 2.42%, Ultratech Cement up by 1.92%, JSW Steel up by 1.70% and BPCL up by 1.62%. On the flip side, Cipla down by 1.63%, TCS down by 1.59%, SBI Life Insurance down by 1.26%, HCL Technologies down by 1.20% and Britannia Industries down by 0.97% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 34.78 points or 0.41% to 8,403.87, France’s CAC fell 32.47 points or 0.4% to 8,156.02 and Germany’s DAX lost 79.86 points or 0.43% to 18,658.95.

Asian markets ended mostly higher on Friday, even after three top Federal Reserve officials urged patience on interest rate cuts until its clear inflation is moderating back to the 2% target. Meanwhile, Chinese shares gained as China announced fresh measures to revive the struggling property market. China will cut interest rates of mortgage loans and down-payment ratios for homebuyers to boost lacklustre property demand. However, Japanese markets finished lower tracking overnight falls in Wall Street, and majority of Japanese firms surveyed said the recent depreciation of the yen has eroded their profits.