Benchmarks settle at fresh closing highs on Friday

Indian equity benchmarks continued their sharp up-move for the third straight session and settled at record closing high levels on Friday. The massive rise was supported by gains across all sectors. Markets made a cautious start as traders were concerned as foreign institutional investors (FIIs) continued their selling streak, offloading shares worth Rs 6,867.72 crore. However, markets soon gained traction and inched higher throughout the day after the Reserve Bank of India (RBI) kept the lending rates unchanged at 6.5% for an eighth straight time. The RBI has also announced an increase in the projected real GDP growth for the financial year 2024-25, setting it at 7.2%, up from the previous estimate of 7%. Besides, the RBI upheld its projection for retail inflation at 4.5% for the current fiscal year, contingent on normal monsoon conditions. This stance arises amidst uncertainties in food prices, which necessitate close scrutiny. 

Markets extended gains in late afternoon deals, as sentiments remained optimistic with the Reserve Bank Governor Shaktikanta Das revealing that India's foreign exchange reserves have soared to an unprecedented $651.5 billion as of May 31. The overall reserves have risen by $4.83 billion since the last reported $646.673 billion on May 24.  Some support also came as Fitch Ratings projects that the election losses will not prompt major policy shifts. Instead, the upcoming budget in July is likely to offer clearer insights into the government’s economic reform strategies and fiscal objectives for the next five years. Traders also took a note of credit rating agency, India Ratings and Research's (Ind-Ra) report stating that the improving liquidity outlook is expected to benefit commercial paper (CP) issuances over the coming months and reverse the decline seen in April 2024.

On the global front, European markets were trading lower as investors reacted to China trade data and awaited the much-anticipated U.S. jobs report. China's exports for May beat analyst expectations with 7.6 percent growth year-on-year in dollar terms, after April's 1.5 percent growth. At the same time, imports slowed to 1.8 percent from the 8.4 percent surge recorded in April - painting a mixed picture of the world's second-largest economy. Asian markets settled mostly down on Friday ahead of key U.S. jobs data due later in the day that could influence the timing and pace of Fed rate cuts.

Finally, the BSE Sensex rose 1618.85 points or 2.16% to 76,693.36, and the CNX Nifty was up by 468.75 points or 2.05% points to 23,290.15.   

The BSE Sensex touched high and low of 76,795.31 and 74,941.88 respectively. All 30 stocks were advancing on the index. 

The broader indices ended in green; the BSE Mid cap index rose 1.28%, while Small cap index was up by 2.18%.

The top gaining sectoral indices on the BSE were Telecom up by 3.78%, IT up by 3.38%, TECK up by 3.33%, Auto up by 2.53% and Consumer Durables up by 2.22%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.83%, Wipro up by 5.09%, Tech Mahindra up by 4.50%, Infosys up by 4.13% and Tata Steel up by 4.04%, while there were no losers on the Sensex.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the improving liquidity outlook is expected to benefit commercial paper (CP) issuances over the coming months and reverse the decline seen in April 2024. 

According to the report titled ‘CP Maturity Tracker - June 2024: Improving Liquidity Outlook to Boost CP Issuances’, the decrease in both value and number of issuers was largely attributable to seasonality after a surge in activity which is typical of the March quarter, while the increase in market activity amid improving liquidity could aid issuers to raise higher value CPs in the upcoming months.

Meanwhile, corporates raised Rs 30,900 crore in May through commercial papers, higher than Rs 28,400 crore in April. Together, non-banking financial companies and housing finance companies issued commercial papers worth Rs 52,400 crore. The total number of issuers for whom commercial papers are maturing in the next three months is 205; of which the top 10 issuers account for Rs 1.2 trillion. The remaining 53% of the total aggregate amount is accounted by the balance commercial paper issuances.

The CNX Nifty traded in a range of 23,320.20 and 22,789.05. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.38%, Wipro up by 4.99%, Tech Mahindra up by 4.18%, Infosys up by 3.99% and Tata Steel up by 3.95%. On the flip side, SBI Life Insurance down by 1.03% and Tata Consumer Product down by 0.43% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 46.93 points or 0.57% to 8,238.41, France’s CAC fell 67.4 points or 0.84% to 7,972.72 and Germany’s DAX lost 158.07 points or 0.85% to 18,494.60.

Asian markets settled mostly down on Friday ahead of key US jobs data due later in the day that could influence the timing and pace of Fed rate cuts. Japanese shares declined marginally with speculation that the Bank of Japan might drop clues on bond tapering plan when authorities meet next week. However, Chinese shares gained marginally after the release of mixed trade data. China's exports posted an annual growth of 7.6% following a 1.5% rise in April, while China's total imports grew 1.8% on-year in May down from the 8.4% surge recorded in April.