Benchmarks manage to end in green ahead of IIP, CPI data

Indian equity benchmarks erased most of their initial gains but managed to end in green on Wednesday, led by gains in Industrials, Power and Capital Goods stocks. Markets made an optimistic start and extended gains as the day progressed as traders took encouragement with a World Bank report stating that India will remain the fastest-growing major economy recording a steady growth of 6.7 per cent in the next three years including the current financial year. Sentiments remained up-beat as data of the commerce ministry showed exports from special economic zones (SEZs) rose by over 4 per cent to $163.69 billion in 2023-24 even though the country's total shipments dipped by more than 3 per cent in the last fiscal. Exports from these zones stood at $157.24 billion in 2022-23 and $133 billion in 2021-22.

Markets remained firm in afternoon deals, taking support from Union Minister Piyush Goyal’s statement that India is positioned in a sweet spot and it is the right time to convert challenges into opportunities. He also noted that the timely sharing of data and transparency in exports and imports will encourage investors to invest more confidently. Some comfort also came as a private survey report stated that India stands sixth globally for its employment outlook for the third quarter of 2024, with 30% of businesses planning to hire more staff over the next three months. However, markets trimmed most of their gains in final hour of trade as investors remained on sidelines ahead of the Index of Industrial Protection (IIP) and Consumer Price Index (CPI) data to be out later in the day for more directional cues. Besides, foreign institutional investors (FIIs) were net sellers of stocks worth Rs 111 crore on June 11. 

On the global front, European markets were trading higher even as Office for National Statistics showed the U.K. economy stagnated in April as growth in services output was offset by falls in both production and construction output. Gross domestic product remained flat on month, as expected, after expanding 0.4 percent in March. Asian markets settled mostly lower on Wednesday as investors awaited key U.S. inflation data as well as a Federal Reserve policy decision later in the day for additional clues on the outlook for interest rates.

Finally, the BSE Sensex rose 149.98 points or 0.20% to 76,606.57, and the CNX Nifty was up by 58.10 points or 0.25% points to 23,322.95.   

The BSE Sensex touched high and low of 77,050.53 and 76,533.78 respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.07%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were Industrials up by 1.22%, Power up by 1.20%, Capital Goods up by 1.19%, PSU up by 1.18% and Utilities up by 1.07%, while FMCG down by 0.40% and Realty down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.54%, Tech Mahindra up by 1.56%, Bajaj Finance up by 1.18%, NTPC up by 1.02% and Ultratech Cement up by 0.99%. On the flip side, Mahindra & Mahindra down by 1.34%, Hindustan Unilever down by 1.03%, Infosys down by 0.71%, Titan Company down by 0.64% and Axis Bank down by 0.54% were the top losers.

Meanwhile, the commerce ministry in its latest data has showed that exports from special economic zones (SEZs) rose by over 4 per cent to $163.69 billion in 2023-24 even though the country's total shipments dipped by more than 3 per cent in FY24. Exports from these zones stood at $157.24 billion in 2022-23 and $133 billion in 2021-22. 

The ministry stated that SEZs are key export hubs which contributed over one-third of the country's total outbound shipments in the last fiscal. SEZs are enclosures that are treated as foreign territories for trade and customs duties, with restrictions on duty-free sales outside these zones in the domestic market. As many as 423 such zones have been approved by the government, out of which 280 are operational as of March 31 this year. As many as 5,711 units are approved in these zones till December 31, 2023.

The data also showed that as on December 31, 2023, over Rs 6.92 lakh crore have been invested in these zones and a total of 30.70 lakh people are employed there. The major export destinations include the United Arab Emirates, the US, the UK, Australia and Singapore. To give a push to these zones, the government is considering several measures such as a flexible framework for the sale of products manufactured in SEZs in the domestic market, and streamlining approval processes for units.

The CNX Nifty traded in a range of 23,441.95 and 23,295.95. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.78%, Power Grid Corporation up by 2.43%, Eicher Motors up by 1.81%, SBI Life Insurance up by 1.74% and Tech Mahindra up by 1.65%. On the flip side, Mahindra & Mahindra down by 1.37%, Britannia Industries down by 1.26%, Hindustan Unilever down by 0.97%, Tata Consumer Products down by 0.91% and Titan Company down by 0.75% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 51.66 points or 0.63% to 8,199.47, France’s CAC rose 30.34 points or 0.39% to 7,819.55 and Germany’s DAX gained 101.48 points or 0.55% to 18,471.42.

Asian markets settled mostly lower on Wednesday tracking a mixed finish overnight on Wall Street, while US treasury yields extended their decline ahead of key US inflation data and a Federal Reserve policy decision later in the day for additional clues on the outlook for interest rates. However, technology shares performed well after Apple unveiled new artificial intelligence features meant to rekindle demand for iPhones. Japanese shares declined as investors waiting for Japanese central bank policy decisions with speculation that the Bank of Japan will trim back JGB purchases in its announcement from Friday's meeting. Japan's wholesale prices in May rose 2.4% from a year earlier, due to both the rising cost of electricity and the weak yen, central bank data showed. Chinese shares fell on reports that the Biden administration is considering further restrictions on China's access to chip technology used for artificial intelligence. China's consumer inflation held steady in May while factory gate inflation eased, official data revealed.