Benchmarks end higher for 3rd straight session

Indian equity benchmarks ended higher for a third straight session on Friday driven by index heavyweights Mahindra & Mahindra, Titan Company and HDFC Bank. Markets made a positive start but soon wiped out their gains and entered into red terrain as traders got anxious with data showing that foreign institutional investors (FIIs) were net sellers of stocks worth Rs 3,033 crore on June 13. However, selling proved short-lived as markets quickly rebounded and remained range-bound until the close as traders found solace with credit rating agency Moody's Ratings’ statement that fuelled by domestic demand growth, India is expected to remain the region's fastest-growing economy in the Asia-Pacific region in the second half of the year 2024. The report also noted that India, Indonesia, and the Philippines were the key growth outperformers in the first half of the year 2024.  Some support also came as industry body the Confederation of Indian Industry (CII) has made a case for pushing reforms in sectors like land, labour, and agriculture by the Modi 3.0 government to accelerate economic growth, which is estimated to be around 8 per cent in the current financial year.

Sentiments remained positive in late afternoon deals, taking support from Economic think tank Global Trade Research Initiative’s (GTRI) statement that implementation of key strategic reforms such as simplification of customs duty structure, Goods and Services Tax (GST), and not incentivising low value-added electric vehicles would help India ensure its sustainable development and inclusive growth. It also said that India is standing on the cusp of a transformative era and there is an urgent need for comprehensive economic reforms. However, gains remained capped as some pessimism remained among traders with data showing that inflation based on wholesale price index (WPI) accelerated in the month of May 2024 to 2.61% from 1.26% in April 2024, due to increase in prices of food articles, minerals, basic metals, computer, electronic & optical products and electrical equipments. The Component wise, primary articles index, having weight of 22.62%, increased 0.54% to 187.7 (provisional) in May 2024 from 186.7 (provisional) for the month of April 2024, on the back of rise in prices of food articles and minerals. 

On the global front, European markets were trading lower as election campaigns in the U.K. and France continue. Political uncertainty in France weighed after the country's finance chief warned that a new left-wing coalition coming to power in France would lead to the country's exit from the European Union. Asian markets ended mixed on Friday amid fading hopes of a series of rate cuts by the US Fed after the central bank officials conservatively forecast just one rate cut this year in the post meeting comments. They said inflation has eased substantially in recent months but still remains too high. 

Finally, the BSE Sensex rose 181.87 points or 0.24% to 76,992.77, and the CNX Nifty was up by 66.70 points or 0.29% points to 23,465.60.   

The BSE Sensex touched high and low of 77,081.30 and 76,549.05 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 1.03%.

The top gaining sectoral indices on the BSE were Industrials up by 1.68%, Capital Goods up by 1.62%, Consumer Durables up by 1.38%, Telecom up by 1.31% and Auto up by 1.26%, while IT down by 0.73% and TECK down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.20%, Titan Company up by 1.79%, HDFC Bank up by 1.05%, Reliance Industries up by 0.88% and Tata Motors up by 0.78%. On the flip side, Tech Mahindra down by 1.38%, TCS down by 1.17%, Wipro down by 1.05%, HCL Technologies down by 0.93% and Kotak Mahindra Bank down by 0.54% were the top losers. 

Meanwhile, expressing optimism over the country’s growth prospects, Moody’s Ratings has said India will remain the Asia-Pacific region’s fastest-growing economy in 2024, sustaining last year’s domestically driven momentum. In a report titled Credit Conditions – Asia-Pacific H2 2024 Credit Outlook, Moody’s Ratings said Indonesia, the Philippines and India led the way in terms of growth in first half of 2024 and should continue to outperform pre-COVID growth numbers on the back of rising exports, local demand and government spending on infrastructure.

It said ‘India will remain the region’s fastest-growing economy, sustaining last year’s domestically driven momentum. We anticipate policy continuity after the general election, and a continued focus on infrastructure development and encouragement of private sector investment’. It said stronger portfolio inflows are likely in India and ASEAN economies, because of robust corporate credit metrics and appealing valuations.

Recently, the rating agency projected India to grow 6.8 per cent in the current year, followed by 6.5 per cent in 2025, on the back of strong, economic expansion along with post-election policy continuity. India’s real GDP grew 7.7 per cent in 2023, up from 6.5 per cent in 2022, driven by robust capital spending by the government and strong manufacturing activity.

The CNX Nifty traded in a range of 23,490.40 and 23,334.25. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.66%, Adani Ports &SEZ up by 2.23%, Mahindra & Mahindra up by 2.18%, Shriram Finance up by 1.75% and Titan Company up by 1.69%. On the flip side, Tech Mahindra down by 1.22%, TCS down by 1.16%, Wipro down by 1.13%, HCL Technologies down by 0.90% and Larsen & Toubro down by 0.61% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 42.53 points or 0.52% to 8,121.14, France’s CAC fell 190.32 points or 2.53% to 7,517.70 and Germany’s DAX lost 245.23 points or 1.36% to 18,020.45.

Asian markets ended mixed on Friday tracking the mixed cues from Wall Street overnight amid fading expectations of a series of interest rate cuts by the US Federal Reserve after the Fed officials forecasted just one interest rate cut this year. Seoul shares gained on sustained strength in technology shares and signs of falling inflation in the United States. Data showed the annual rate of producer price growth slowed to 2.2% in May from an upwardly revised 2.3% in April. Japanese shares gained after the BoJ opted to leave policy settings unchanged, signalling a decision on paring bond purchases would come next month. Chinese shares gained marginally even by new European Union tariffs against the country’s major electric vehicles. Kospi average marginally rose as the government extended a market-wide ban on short-selling of stocks through the first quarter of 2025.