Key indices end near day's lows amid profit-taking, weak global markets

Indian equity benchmarks failed to carry forward the winning momentum and closed at lowest points of the day on Friday, as investors chose to book profits at record high levels, ahead of Union Budget 2024 amid concerns over the prevailing market valuations. After a flat start, the markets quickly slipped into the red and fell sharply later in the session, due to the global sell-off, triggered by operating system issues that caused devices to crash worldwide. The global IT outrage has led to disruptions in various Indian industries. Traders remained cautious with the Reserve Bank of India (RBI) in its monthly bulletin stating that despite the overall positive trajectory, inflation remains a key concern for the Indian economy as the uptick in June 2024 has derailed its disinflation path. 

Benchmarks extended their losses during late afternoon deals on across the board sell-off. Traders overlooked Crisil’s report noting that India's exports have shown resilience amidst global challenges, with merchandise exports rising by 5.8% to $109.96 billion in the first quarter of fiscal 2025. Traders also paid no heed towards FICCI’s Economic Outlook Survey stating that Indian economy is expected to grow at an annual median GDP growth of 7 per cent in 2024-25. Traders also shrugged off the think tank Global Trade Research Initiative’s (GTRI) latest report stating that the steps such as increasing exports, making local currency trading workable and a free trade agreement with the Eurasian Economic Union will help boost trade between India and Russia.

On the flip side, Asian markets settled mostly down on Friday, while European markets were trading lower as a host of factors such as deepening Sino-U.S. trade tensions, lingering uncertainty over U.S. President Joe Biden's path to victory in the presidential race, a lack of Chinese stimulus measures to revive growth and a widespread Microsoft outage that hit services from airlines, banks and financial services curbed investors' appetite for risk. Back home, on the sectoral front, sugar stocks were in focus as ICRA said India’s net sugar production for the sugar season 2025 starting October is projected to decline to 30 million tonnes (mt) from 32 mt in the previous year on expectations of higher diversion will be allowed to ethanol.

Finally, the BSE Sensex fell 738.81 points or 0.91% to 80,604.65, and the CNX Nifty was down by 269.95 points or 1.09% points to 24,530.90. 

The BSE Sensex touched high and low of 81,587.76 and 80,499.10 respectively. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.31%, while Small cap index was down by 2.22%.

The top losing sectoral indices on the BSE were Metal down by 4.11%, Basic Materials down by 3.07%, Oil & Gas down by 2.87%, Energy down by 2.83% and Power down by 2.67%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Infosys up by 1.92%, ITC up by 0.89%, Asian Paints up by 0.53% and HCL Technologies up by 0.03%. On the flip side, Tata Steel down by 5.17%, JSW Steel down by 4.36%, NTPC down by 3.51%, Tata Motors down by 3.43% and Ultratech Cement down by 3.28% were the top losers.

Meanwhile, NITI Aayog in its latest report titled ‘Electronics: Powering India’s Participation in Global Value Chains’, has said that India should aim $500 billion in electronics manufacturing by 2030. It added that such growth would create employment for about 6 million people. It stated this ambitious target comprises $350 billion from finished goods manufacturing and $150 billion from components manufacturing. As of FY23, India’s electronics production stands at $101 billion. This comprises $86 billion in finished goods production and $15 billion in components manufacturing.

According to the report, India’s electronics exports are expected to reach $240 billion and domestic value addition to increase to over 35 per cent. It mentioned ‘India’s ambition to become the third-largest global economy necessitates a more ambitious vision for its technology-driven sectors. With a conducive business environment and robust policy support, including fiscal incentives and non-fiscal interventions, India should aim to achieve $500 billion in electronics manufacturing by value terms by FY30.’

Besides, in a business as usual (BAU) scenario, the report noted that the projections indicate India’s electronics manufacturing could escalate to $278 billion by FY30. This includes $253 billion from finished goods and $25 billion from components manufacturing. Employment generation is expected to grow substantially to around 3.4 million, with exports reaching $111 billion.

The CNX Nifty traded in a range of 24,854.80 and 24,508.15. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.78%, ITC up by 0.62%, Asian Paints up by 0.60% and Britannia Industries up by 0.06%. On the flip side, Tata Steel down by 4.97%, JSW Steel down by 4.68%, BPCL down by 3.98% and Hindalco down by 3.91% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 43.61 points or 0.53% to 8,161.28, France’s CAC fell 46.77 points or 0.62% to 7,539.78 and Germany’s DAX lost 131.42 points or 0.72% to 18,223.34.

Asian markets settled mostly down on Friday due to speculation over a second Donald Trump presidency, persisting concerns over the US-China trade war, and China’s Third Plenum failed to provide any details on further stimulus measures to shore up its economy. Japanese shares fell, even as semiconductor shares rebounding from recent string of losses. Japanese market tracked Wall Street’s declines overnight, while Japanese government cut this year's growth forecast as consumption took a hit from rising import costs due to a weak yen that highlighted the fragile nature of the economic recovery.