Benchmarks end range-bound session on positive note

Indian equity benchmarks ended a range-bound session on a positive note on Wednesday aided by buying in Realty, FMCG and IT stocks. After making a slightly positive start, markets turned cautious amid foreign fund outflows. Foreign institutional investors (FIIs) offloaded shares worth Rs 1,874.54 crore on May 21. Some concern also came as domestic rating agency ICRA projected India's GDP growth to moderate to a four-quarter low of 6.7 per cent in March quarter of 2023-24 fiscal. For the full 2023-24 fiscal, ICRA estimates GDP growth to come in at 7.8 per cent. ICRA Chief Economist, Head-Research & Outreach Aditi Nayar said the lower volume growth coupled with diminishing gains from commodity prices dampening the profitability of some of the industrial sectors is expected to dampen India's GVA growth in Q4 FY2024. 

However, markets soon gained some positive momentum and managed to keep their heads above water for whole day as traders took support after an article on the state of the economy published in the Reserve Bank of India’s (RBI's) May Bulletin noted that India is likely to grow by 7.5 per cent in the first quarter of the current financial year (Q1FY25), with rising aggregate demand and non-food spending in the rural economy. Sentiments remained positive amid a private report stating that private sector investment is likely to pick up in the second half of the current financial year in sectors like hotel and tourism, after years of government-led robust capex to promote infrastructure building. The government has been pushing capital expenditure to promote economic growth. The push in expenditure has helped the country sustain the growth momentum in the aftermath of the Covid pandemic. 

On the global front, Asian markets settled mixed on Wednesday as investors waited for cues from the release of minutes of the Federal Reserve's recent meeting. Waning optimism over Chinese economic recovery and geopolitical uncertainties also kept investors on the sidelines. European markets were trading lower due to uncertainty over the rate outlook and amid caution ahead of Nvidia's earnings release. Meanwhile, data showed that U.K. consumer price inflation slowed less than expected in April, raising uncertainty over a possible rate cut in June. Data from the Office for National Statistics showed that the U.K. consumer price inflation weakened to the lowest since July 2021. 

Finally, the BSE Sensex rose 267.75 points or 0.36% to 74,221.06, and the CNX Nifty was up by 68.75 points or 0.31% points to 22,597.80. 

The BSE Sensex touched high and low of 74,307.79 and 73,860.33 respectively. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.05%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Realty up by 1.41%, FMCG up by 1.26%, IT up by 0.63%, TECK up by 0.61% and Utilities up by 0.59%, while Bankex down by 0.52%, Metal down by 0.39%, Consumer Durables down by 0.18%, Oil & Gas down by 0.16% and Basic Materials down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.45%, Reliance Industries up by 1.72%, Infosys up by 1.43%, Asian Paints up by 1.22% and ITC up by 1.10%. On the flip side, SBI down by 1.35%, JSW Steel down by 0.93%, Axis Bank down by 0.87%, ICICI Bank down by 0.66% and Tata Steel down by 0.57% were the top losers.

Meanwhile, credit rating agency Crisil in its latest report has said that India’s wind capacity addition is expected to increase by around 2.5 times to nearly 25 GW between fiscals 2025 and 2028 compared with around 9 GW between fiscals 2021 and 2024, entailing a capital expenditure (capex) of Rs 1.8-2 lakh crore. This rides on the increasing importance of wind generation in India’s renewable mix for grid balancing and providing renewable power throughout the day vis-a-vis solar generation, which typically happens during the day. 

According to the report, a ramp-up in auctions of wind and hybrid projects (including storage linked projects) supported by construction of transmission infrastructure to wind sites, improved financial profiles of wind original equipment manufacturers (OEMs), and viable tariff bids in recent past indicate as much. India added wind capacity at around 3.0 GW per year between fiscals 2014 and 2018. However, the pace slowed down to 1.7 GW between fiscals 2018 and 2023 owing to lack of connected sites with high wind potential and diminished returns for developers following aggressive bidding. Several policies/ initiatives have since been rolled out to strengthen the prospects of the wind sector.

The report said, for instance, the government has set a target to auction 50 GW of renewable projects every year, including 10 GW of standalone wind projects for specifically reinvigorating wind capacity additions. This has already led to auction of around 5 GW standalone wind projects since the start of fiscal 2023, vis-a-vis around 3 GW auctioned in fiscals 2021 and 2022. Auctions of hybrid and storage linked projects are also on the rise--up from 4 GW in fiscals 2021 and 2022 to nearly 18 GW in fiscals 2024 and 2023.

The CNX Nifty traded in a range of 22,629.50 and 22,483.15. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.79%, Tata Consumer Products up by 2.51%, Hindustan Unilever up by 2.39%, Coal India up by 2.28% and Reliance Industries up by 1.70%. On the flip side, Shriram Finance down by 1.53%, Apollo Hospital down by 1.32%, Hindalco down by 1.17%, Hero MotoCorp down by 1.12% and HDFC Life Insurance Company down by 0.86% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 24.93 points or 0.3% to 8,391.52, France’s CAC fell 40.55 points or 0.5% to 8,100.91 and Germany’s DAX lost 41.08 points or 0.22% to 18,685.68.

Asian markets settled mixed on Wednesday ahead of AI chip leader Nvidia's earnings report and the release of minutes of the US Federal Reserve's recent meeting. Meanwhile geopolitical uncertainties in middle east also kept investors under pressure. Japanese shares declined after data showed bigger-than-expected trade deficit in April, as exports grew less than expected due to weak demand in countries like China. Seoul shares end almost flat as South Korea's producer prices rose for the fifth consecutive month in April, partially driven by the soaring prices of services and industrial goods, central bank data showed earlier in the day.