Benchmarks end at record closing peaks on Friday

Indian equity benchmarks gained sharply on Friday to end at record closing peaks, backed by a surge in IT, TECK and FMCG stocks. The upbeat mood among investors was also fuelled by better-than-expected inflation figures in the US, lifting hopes of an interest rate cut. Markets made a positive start as traders took support with Government e Marketplace (GeM) CEO Prashant Kumar Singh’s statement that the government's GeM portal has clocked a gross merchandise value of Rs 1,24,761 lakh crore at the end of first quarter (Q1FY25), representing a quarter-on-quarter growth of 136 per cent over last year's Rs 52,670 crore. He said that going by this pace, it will become the world's largest platform. South Korea's KONEPS is the largest such platform in the world.  Markets extended their gains in late morning deals as sentiments remained up-beat with the NITI Aayog member Arvind Virmani’s statement that the Indian economy will grow around 7 per cent in the current fiscal year and is on track to maintain a similar growth rate for several years.

Markets continued their gaining momentum in late afternoon session, taking support from Union Minister Hardeep Singh Puri’s statement that that India offers an investment opportunity of at least $100 billion by 2030 in the Exploration and Production of energy. Traders overlooked the Reserve Bank of India (RBI) Governor, Shaktikanta Das’ statement that it was too early to talk about a cut in policy rates given the uncertain global economic environment and a persistently high home consumer inflation, which has trended above the central bank's legally mandated target. Traders also paid no heed towards latest data released by the Reserve Bank of India (RBI) showing that deposit growth of commercial banks further slowed down to 10.64 per cent for the fortnight ending June 28. Credit growth also declined during the period. Markets eyed the earnings season and the eagerly anticipated 2024 Union Budget on July 23. Traders also remained on sidelines ahead of the India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out on July 12.

On the global front, European markets were trading higher as surprising soft U.S. inflation data bolstered hopes for two Federal Reserve rate cuts this year. Asian markets settled mixed on Friday as investors reacted to surprisingly soft U.S. inflation data, mixed Chinese trade figures and comments from several Federal Reserve officials on the rate trajectory.

Back home, edible oil industry stocks remained in focus as Solvent Extractors' Association of India (SEA) data showed that import of vegetable oils, comprising edible and non-edible oils, rose 18 per cent in June to 1.55 million tonnes on higher imports of crude palm oil and crude sunflower oil. There were some reaction in auto component industry stocks as a recent report by ICRA stated that the Indian auto component industry is projected to see a moderation in revenue growth to 5-7 per cent for the fiscal year 2025, following a robust 14 per cent growth in FY2024, on account of slower domestic original equipment manufacturer (OEM) segment growth and subdued export demand. 

Finally, the BSE Sensex rose 622.00 points or 0.78% to 80,519.34, and the CNX Nifty was up by 186.20 points or 0.77% points to 24,502.15. 

The BSE Sensex touched high and low of 80,893.51 and 79,843.39 respectively. There were 19 stocks advancing against 10 stocks declining, while 1 stock remained unchanged on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.22%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were IT up by 4.32%, TECK up by 3.29%, FMCG up by 0.24%, Oil & Gas up by 0.14% and Energy up by 0.13%, while Realty down by 1.56%, Power down by 0.86%, Industrials down by 0.59%, Capital Goods down by 0.57% and Auto down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 6.68%, Infosys up by 3.57%, HCL Tech. up by 3.20%, Tech Mahindra up by 3.19% and Axis Bank up by 1.62%. On the flip side, Maruti Suzuki down by 1.00%, Asian Paints down by 0.79%, Kotak Mahindra Bank down by 0.77%, ICICI Bank down by 0.56% and Titan Company down by 0.55% were the top losers.

Meanwhile, NITI Aayog member Arvind Virmani has said that the India’s gross domestic product (GDP) will grow around 7 per cent in the current fiscal year (FY25) and is on track to maintain a similar growth rate for several years. He said there are new challenges facing the country and they will have to be dealt with. Recently, the Reserve Bank of India (RBI) pegged the FY25 GDP growth rate at 7.2 per cent.

Talking on the decline in private consumption expenditures in the last fiscal year, Virmani said ‘it is actually recovering now. The effect of the pandemic was to draw down savings... and very different from previous financial shocks’. Explaining further, he said ‘it is like what he calls a double drought situation. We also had, of course, El Nino last year, but what the pandemic did was that it resulted in people having to draw down their savings... So, the obvious reaction is to rebuild your savings, which tend to reduce current consumption’.

On the decline in foreign direct investments (FDI) to India, despite it being the fastest growing economy, he said riskless return of investment is much higher in the US and other developed countries than in emerging markets. He said ‘as soon as interest rates begin to come down in the US, I expect the FDI into emerging markets, including India, to increase’.

The CNX Nifty traded in a range of 24,592.20 and 24,331.15. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were TCS up by 6.59%, Wipro up by 4.66%, HCL Technologies up by 3.30%, Infosys up by 3.25% and Tech Mahindra up by 3.04%. On the flip side, Asian Paints down by 1.01%, Divi's Lab down by 0.93%, Maruti Suzuki down by 0.91%, Titan Company down by 0.84% and Hindalco Industries down by 0.83% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 24.09 points or 0.29% to 8,247.43, France’s CAC rose 54.73 points or 0.72% to 7,681.86 and Germany’s DAX gained 79.11 points or 0.43% to 18,613.67. 

Asian markets settled mixed on Friday as a surprisingly soft US inflation data fuelled bets for a September rate cut, while former President Donald Trump leading in new 2024 election poll that showed only 24% of voters think Biden is mentally sharp. Chinese shares gained marginally after the release of mixed trade data. China's exports rose 8.6% year-on-year by value in June, while imports dropped 2.3%, customs data revealed. Hong Kong shares jumped after Chinese securities regulator announced fresh curbs on short-selling to bolster market sentiment. Meanwhile investors were awaiting next week's Third Plenum meeting. Japanese shares declined as the yen strengthened with speculation that Japanese authorities may have again intervened in forex markets to prop up the ailing currency.