Post Session: Quick Review

Indian equity benchmarks remained in green territory till the end of the session with Nifty and Sensex settling above the psychological 23,350 and 76,800 levels, respectively. Markets hit fresh record highs in a day on the account of easing India’s inflation in the month of May. US Fed rate outcome also cheered the markets sentiments. As for broader indices, the BSE Mid cap index and Small cap index ended with gains of over half a percent. Buying was witnessed in IT sector’s stock. 

Markets made positive start and continued to trade in green tracking broadly positive global cues. Traders got encouragement as Consumer Price Index (CPI)-based headline retail inflation eased to a 12-month low of 4.75 per cent in May on the back of a softening core and fuel inflation. Investors overlooked the report that India’s industrial production growth measured in terms of the Index of Industrial Production (IIP) slipped to 3-month low of 5 per cent in April 2024, as compared with a revised estimate of 5.4% in March, mainly due to poor show by the manufacturing sector, though mining and power segments performed well. Further, indices remained in green in afternoon session, as sentiments remained positive as the Reserve Bank of India (RBI) in its latest data report on ‘Overseas Direct Investment’ has showed that the country's outward foreign direct investment (OFDI) commitments increased 1.04% at $2009.51 million in May 2024 as compared to $1988.8 million in May 2023. These OFDI commitments were $2782.61 million in the month of April 2024. According to the report, the equity commitments rose 6.51% to $1028.76 million in May 2024 from $965.86 million a year ago. A positive trade continued in late afternoon session over the Dalal Street. 

On the global front, European markets were trading lower weighed down by elevated government bond yields after the U.S. Federal Reserve cut its interest rate cut projections to just one this year. Asian markets ended mixed after the U.S. Federal Reserve held the federal funds rate at 5.25% to 5.5%, and shifted its “dot plot” to project only one rate cut this year. This was down from the three cuts projected in its March meeting. However, the dot plot also indicated a more aggressive cutting path for 2025 - four rate cuts totaling a full percentage point are anticipated, up from three. Back home, credit rating agency ICRA in its latest report has said that the cargo volumes in India are likely to grow 6-8 per cent in the current fiscal year (FY25) on account of healthy growth in the container and coal segments.

The BSE Sensex ended at 76,810.90, up by 204.33 points or 0.27% after trading in a range of 76,719.70 and 77,145.46. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.79%, while Small cap index was up by 0.89%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.15%, Capital Goods up by 2.05%, Consumer Durables up by 2.01%, Industrials up by 1.67% and IT was up by 1.08%, while Telecom down by 0.89%, FMCG down by 0.46%, Utilities down by 0.39%, Bankex down by 0.10% and Metal was down by 0.03% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 2.91%, Titan Company up by 2.62%, Larsen & Toubro up by 1.97%, Tech Mahindra up by 1.48% and Indusind Bank up by 1.39%. On the flip side, Hindustan Unilever down by 1.62%, Axis Bank down by 1.13%, Power Grid down by 0.92%, ICICI Bank down by 0.80% and Bharti Airtel down by 0.67% were the top losers. (Provisional)

Meanwhile, remaining within the Reserve Bank of India’s (RBI) comfort zone, the Consumer Price Index (CPI) based retail inflation continued its downward slide to reach 12-month low of 4.75 per cent in May as compared to 4.83 per cent in April 2024, due to a marginal decline of prices in the food basket. The Consumer Price Index (CPI) based retail inflation - on a declining trend since January - was 4.31 per cent in May 2023 (the previous low). The government has tasked the Reserve Bank to ensure the CPI inflation remains at 4 per cent with a margin of 2 per cent on either side.

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) in its data has showed that Rural CPI (General) in May 2024 stood at 5.28 per cent over 5.43 per cent in April 2024. The Urban CPI (General) stood at 4.15 per cent in May as against 4.11 per cent in April. The index value for Rural, Urban and Combined CPI (General) stood at 189.3, 185.6 and 187.6 respectively, in May 2024. The price data are collected from selected 1114 urban Markets and 1181 villages covering all States/ UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster.

Inflation in the food basket stood at 8.69 per cent in May, marginally down from 8.70 per cent in April. The inflation rate for vegetables moderated marginally to 27.3 per cent on a yearly basis as against 27.8 per cent in April. For cereals and Pulses, which constitute a significant portion of India's staple diet, the inflation rate came in at 8.69 per cent and 17.14 per cent respectively. The Fuel and light inflation rate for May contracted to 3.83 per cent as against a contraction of 4.24 per cent in April. For clothing & footwear and housing sectors the inflation rates were 2.74 per cent and 2.56 per cent, respectively.

The CNX Nifty ended at 23,398.90, up by 75.95 points or 0.33% after trading in a range of 23,353.90 and 23,481.05. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Shriram Finance up by 4.57%, HDFC Life Insurance up by 3.63%, Divi's Lab up by 3.17%, Mahindra & Mahindra up by 2.66% and Titan Company up by 2.66%. On the flip side, Hindustan Unilever down by 1.63%, Axis Bank down by 1.12%, Britannia down by 1.10%, ICICI Bank down by 1.09% and Eicher Motors down by 1.01% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 39.13 points or 0.48% to 8,176.35, France’s CAC fell 84.95 points or 1.09% to 7,779.75 and Germany’s DAX was down by 202.08 points or 1.1% to 18,428.78. 

Asian markets settled mostly higher on Thursday as soft US inflation data fuelled bets that the US Federal Reserve will lower interest rates in coming months. Data showed that US consumer prices rose 3.3% in the year to the end of May, down 0.1% points from the month before. Although, the latest projections showed officials expect only one interest rate cut this year compared to the three projected in March. Hong Kong shares gained on optimism over Artificial intelligence (AI)’s potential to positively impact businesses. However, Chinese shares declined after the European Commission said it plans to impose provisional duties on imports of Chinese electric vehicles in July. Japanese shares fell ahead of Friday's BOJ policy meeting where the BoJ may consider trimming its bond buying, taking a first key step to reducing its almost $5 trillion balance sheet.