Post Session: Quick Review

Indian equity markets traded in positive territory for most part of the day but volatility kept gains limited during the day with Nifty and Sensex settling above the psychological 23,550 and 77,400 levels respectively. Markets failed to continue fresh record highs trend in Thursday’s session amid weekly F&O expiry. Metal and Banking sectors’ stocks witnessed buying interest. The broader indices, the BSE Mid cap index and Small cap index gave optimistic performance with ending over half a percent.

Indices made positive start but soon turned volatile amid mixed cues from the other Asian markets. Traders were cautious as the ministry of labour and employment said that formal job creation under the Employees’ State Insurance Corporation (ESIC) fell by 7.8% to 1.64 million in April 2024 as against 1.78 million in the corresponding month last year. However, markets managed to enter into green territory even after RBI in its article on the ‘State of the Economy’ said that retail inflation is gradually easing, but volatile and elevated food prices are interrupting the path of disinflation. It said global growth was resilient in the first quarter of 2024, and many central banks have pivoted towards a less restrictive monetary policy stance in response to the fall in inflation in their economies.  Markets held their gains in afternoon session on account of buying in front line counters. Traders took note of report that government has hiked Minimum Support Prices (MSP) for all mandated Kharif Crops for Marketing Season 2024-25. This move aimed to ensure remunerative prices to the growers for their produce. Till the end of the session, indices traded in green. Investors overlooked the private report stating that tackling India's chronic joblessness will be the biggest challenge for the government over the next five years, even as the country remains the world's fastest-growing major economy.

On the global front, European markets were trading higher ahead of the Bank of England's rate decision later in the day. The BoE is widely expected to hold its interest rate at 5.25 percent for the seventh straight session despite inflation hitting the 2 percent target in May. Asian markets ended mixed after China's central bank maintained its lending rates unchanged, as widely expected. The People's Bank of China kept its one-year loan prime rate unchanged at 3.45 percent. Back home, India has been ranked 63rd on a global Energy Transition Index released by the World Economic Forum (WEF), which said the country has shown significant improvement across energy equity, security and sustainability.

The BSE Sensex ended at 77,478.93, up by 141.34 points or 0.18% after trading in a range of 77,100.36 and 77,643.09. There were 15 stocks advancing against 14 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.55%, while Small cap index was up by 1.00%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.97%, Basic Materials up by 1.88%, Metal up by 1.87%, Energy up by 0.90% and Oil & Gas was up by 0.81%, while Auto down by 0.72%, Telecom down by 0.45%, Consumer Durables down by 0.25%, PSU down by 0.17% and Utilities was down by 0.16% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were JSW Steel up by 1.67%, Tata Steel up by 1.28%, ICICI Bank up by 1.05%, Reliance Industries up by 1.00% and Kotak Mahindra Bank up by 0.96%. On the flip side, Sun Pharma Inds. down by 2.24%, Mahindra & Mahindra down by 2.10%, NTPC down by 1.26%, SBI down by 1.03% and Power Grid down by 0.90% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) in its article on the ‘State of the Economy’ published in the June 2024 Bulletin has said that the goal of aligning inflation with the target of 4 per cent remains a work in progress as long as food price pressures persist. It also said the retail inflation is gradually easing, but volatile and elevated food prices are interrupting the path of disinflation.

The article, authored by a team lead by the Reserve Bank of India Deputy Governor Michael Debabrata Patra, noted that global growth was resilient in the first quarter of 2024, and many central banks have pivoted towards a less restrictive monetary policy stance in response to the fall in inflation in their economies. In India, high-frequency indicators suggest the real GDP growth in Q1 FY25 is broadly maintaining the pace it achieved in the preceding quarter. Also, it stated the prospects for agriculture are brightening with the early landfall of the southwest monsoon.

The RBI has been mandated by the government to ensure retail or headline inflation remains at 4 per cent with a margin of 2 per cent on either side. It mentioned the fact that the ongoing disinflation is being driven by the softening of the core component of consumer price index (CPI) inflation to a new low validates the stance of monetary policy.

The CNX Nifty ended at 23,567.00, up by 51.00 points or 0.22% after trading in a range of 23,442.60 and 23,624.00. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 2.13%, Grasim Industries up by 2.11%, BPCL up by 1.70%, JSW Steel up by 1.61% and Adani Ports up by 1.45%. On the flip side, Hero MotoCorp down by 2.53%, Sun Pharma down by 2.19%, Mahindra & Mahindra down by 2.14%, NTPC down by 1.34% and Wipro down by 1.08% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 15.06 points or 0.18% to 8,220.17, France’s CAC rose 57.6 points or 0.76% to 7,627.80 and Germany’s DAX was up by 119.56 points or 0.66% to 18,187.47. 

Asian markets settled mixed on Thursday ahead of future rate decisions by major central banks. The People's Bank of China left benchmark lending rates unchanged at a monthly fixing in line with market expectations. Meanwhile, escalating geopolitical tensions in Europe and the Middle East also kept pressure on market sentiments. Chinese shares declined on concerns over a slowing property market. Japanese shares gained led by chip-related shares, while data showed Japan's exports rose for a sixth straight month in May.