Benchmarks hit fresh record closing highs

Indian equity benchmarks gained sharply during late deals on Thursday to scale their new record closing high levels, supported by gains in IT, TECK and FMCG stocks. Key indices opened lower and witnessed lackluster trading in the first half, as investors continued to trade with caution ahead of the Budget announcement. Rising crude oil prices weighed on the domestic sentiments. Traders also remained cautious with analysis of the latest KLEMS (Capital, Labour, Energy, Material and Service) database released by the Reserve Bank of India (RBI) showing that as many as nine out of 27 industries saw their labour productivity contract in FY23 compared to the preceding year, with eight of these industries belonging to the manufacturing sector, thus highlighting India’s lack of competitiveness in industrial sectors.

However, sharp surge in the afternoon session pushed benchmarks to record high levels. Traders took encouragement as the International Monetary Fund in its World Economic Outlook raised India’s growth forecast for FY25 to 7 percent from 6.8 percent projected in April. It noted the forecast for growth in India has been revised upward, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas. Some solace also came after the Asian Development Bank (ADB) in its July edition of the Asian Development Outlook (ADO) maintained India’s GDP growth forecast at 7 per cent for the current financial year (FY25), citing that a rebound in agriculture is expected given above-normal monsoon projections. Traders also took note of private report that India is aiming to boost annual foreign direct investment by more than 50% to help lift economic growth. 

On the global front, European markets were trading higher ahead of the monetary policy announcement from the European Central Bank (ECB) later in the day. Asian markets settled mixed on Thursday as tech shares came under heavy selling pressure on signs of worsening trade tensions between the China and the United States. There are also concerns that another Trump presidency could disrupt global trade. 

Back home, on the sectoral front, stocks related to telecom sector were in limelight as Crisil Ratings’ report stated that a much-needed tariff hike and growing data consumption will lift the average revenue per user per month (ARPU) of Indian telecom companies (telcos) by around 25% in fiscal 2026 compared with fiscal 2024. That, along with moderation in capital expenditure (capex), on account of lower network investments after completion of 5G rollouts and limited spectrum renewals, will enhance return on capital employed (RoCE) and support deleveraging in the industry, thereby improving credit profiles. However, select jewellery industry’s stocks ended lower after data by Gem and Jewellery Export Promotion Council (GJEPC) showed that India's overall gems and jewellery exports witnessed an on-year decline of 13.44 per cent in June 2024 at Rs 15,939.77 crore ($1,909.57 million) against Rs 18,413.88 crore ($2,240.77 million) during June 2023 amid muted demand in overseas markets.

Finally, the BSE Sensex rose 626.91 points or 0.78% to 81,343.46, and the CNX Nifty was up by 187.85 points or 0.76% points to 24,800.85. 

The BSE Sensex touched high and low of 81,522.55 and 80,390.37 respectively. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.99%, while Small cap index was down by 1.15%.

The top gaining sectoral indices on the BSE were IT up by 1.84%, TECK up by 1.84%, FMCG up by 0.86%, Telecom up by 0.63% and Bankex up by 0.48%, while Capital Goods down by 2.03%, Industrials down by 1.95%, Power down by 1.73%, PSU down by 1.17% and Utilities down by 1.08% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.33%, Bajaj Finserv up by 2.57%, Mahindra & Mahindra up by 2.32%, Infosys up by 1.93% and Hindustan Unilever up by 1.74%. On the flip side, Asian Paints down by 1.48%, JSW Steel down by 0.89%, NTPC down by 0.71%, Adani Ports &SEZ down by 0.52% and Power Grid Corporation down by 0.42% were the top losers.

Meanwhile, the Asian Development Bank (ADB) in its July edition of the Asian Development Outlook (ADO) has maintained India’s GDP growth forecast at 7 per cent for the current financial year (FY25), citing that a rebound in agriculture is expected given above-normal monsoon projections.

It stated the Indian economy is on track to grow by 7 per cent in FY25 (ending 31 March 2025) and 7.2 per cent in next financial year, as projected in ADO April 2024. The Indian economy logged a growth rate of 8.2 per cent for the financial year ended March 2024, as against 7 per cent in the previous fiscal year. 

It stated, services continued to expand robustly in Q4 of FY24, and the forward-looking services PMI is well above its long-term average, it said, adding, industry is also expected to grow robustly, driven by manufacturing and strong demand for construction led by housing, it said. With regard to inflation, it has also retained its forecast at 4.6 per cent for the current financial year and expects it to marginally decline to 4.5 per cent next fiscal.

The CNX Nifty traded in a range of 24,837.75 and 24,504.45. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were LTIMindtree up by 3.48%, ONGC up by 2.99%, TCS up by 2.84%, Wipro up by 2.41% and Bajaj Finserv up by 2.39%. On the flip side, Hero MotoCorp down by 1.49%, Coal India down by 1.48%, Asian Paints down by 1.40%, Grasim Industries down by 1.25% and Bajaj Auto down by 0.86% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 55.86 points or 0.68% to 8,243.32, France’s CAC rose 42.17 points or 0.56% to 7,612.98 and Germany’s DAX gained 39.75 points or 0.22% to 18,477.05.