Post Session: Quick Review

Indian equity markets held strong gains in afternoon session but sharp selloff in last leg of trade forced markets to end flat on yet another day amid profit taking. Traders avoided to take risk as a two-day policy meeting of the Federal Reserve gets underway later today. Investors were monitoring Q1 earnings during the day. The broader indices, the BSE Mid cap index and Small cap index ended in green. Buying was witnessed in Power and Oil & Gas sector’s stocks.

Markets made cautious start tracking weakness in Asian counterparts. Soon, markets turned volatile and are swinging between green and red terrain. Some cautiousness came with a report that the government estimates its debt, including external borrowing, valued at current exchange rate and public account and other liabilities will increase to Rs 185 trillion, or 56.8 per cent of the GDP, during the current fiscal year. However, soon markets gained traction to trade higher, as investors took support after economic think tank NCAER said the Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty. Besides, Executive Director at the International Monetary Fund (IMF) Krishnamurthy Subramanian stated that reduction of corporate tax from 40 per cent to 35 per cent in the 2024 Indian Budget and removal of Angel Tax are among the measures that will promote India-US economic engagement. In afternoon session, indices continued their gaining momouteum as sentiments were upbeat after Union Labour Minister Mansukh Mandaviya reassured the public that there is no need for concern about job losses. He predicted that India's unemployment rate would fall below 3 per cent in the near future. However, in late afternoon session markets come off from high levels as traders booked their profit. 

On the global front, European markets were trading mostly in green as a two-day policy meeting of the Federal Reserve gets underway later today, with investors hoping for dovish guidance. Asian markets ended mostly in red as investors awaited cues from a slew of central bank meetings around the world and mega-cap U.S. tech earnings. Back home, Centre’s debt to GDP ratio rose to 58.2% in 2023-24, as against the budget estimate of 57.2% and the revised estimate of 58.1%. In 2022-23, the ratio stood at 57.9%.

The BSE Sensex ended at 81,455.40, up by 99.56 points or 0.12% after trading in a range of 81,230.44 and 81,815.27. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.88%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.97%, Power up by 1.49%, Consumer Durables up by 1.15%, Oil & Gas up by 0.73% and Consumer Disc was up by 0.72%, while FMCG down by 0.95%, Healthcare down by 0.27%, TECK down by 0.04% and IT was down by 0.01% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.42%, NTPC up by 3.34%, Bajaj Finserv up by 2.10%, Power Grid up by 2.04% and Asian Paints up by 1.69%. On the flip side, Sun Pharma down by 1.30%, ITC down by 1.19%, Hindustan Unilever down by 0.90%, Bharti Airtel down by 0.68% and Ultratech Cement down by 0.61% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s growth, economic think tank National Council of Applied Economic Research (NCAER), in its July 2024 issue of Monthly Economic Review (MER), has said that the Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty. It added real GDP grew by 8.2 per cent in FY2023-24, driven by stable consumption demand and steadily improving investment demand.

NCAER director general Poonam Gupta said ‘Based on the momentum in the high-frequency indicators, normalised monsoon, a relatively benign global outlook and receded electoral uncertainty, both in India and in the rest of the world, growth will likely turn out to be higher than 7 per cent, and possibly closer to 7.5 per cent’. Gupta said the Union Budget 2024-25 lived up to the expectations of unwavering commitment to fiscal consolidation, prudence, and quality. The Budget has kept the fiscal deficit target at 4.9 per cent of GDP and capital expenditure at 2.4 per cent of GDP during 2024-25.

According to the NCAER, the short to medium-term growth strategy is based on six key areas -- private sector capital formation, green transition financing, MSME development, agricultural transformation, Education and skill development, and enhanced state capacity. The NCAER-NSE business confidence index (BCI) increased to 149.8 in the first quarter (Q1) of FY25, up from 138.2 in the fourth quarter (Q4) of FY24, indicating an improvement in business sentiments.

The CNX Nifty ended at 24,857.30, up by 21.20 points or 0.09% after trading in a range of 24,798.65 and 24,971.75. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 3.37%, NTPC up by 3.31%, BPCL up by 3.05%, Power Grid up by 2.18% and Asian Paints up by 1.70%. On the flip side, LTIMindtree down by 1.97%, Cipla down by 1.61%, SBI Life down by 1.47%, Grasim Industries down by 1.32% and Sun Pharma down by 1.26% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC rose 31.17 points or 0.42% to 7,475.01 and Germany’s DAX was up by 59.95 points or 0.33% to 18,380.62. On the flip side, UK’s FTSE 100 was down by 24.74 points or 0.3% to 8,267.61. 

Asian markets settled mostly down on Tuesday ahead of slew of central bank policy meetings in Japan, the United States, and UK and mega-cap US tech earnings this week. Many investors were expecting no change in interest rates for July by US Federal reserve. Market sentiments weakened further as Germany reported that its economy contracted in the last quarter. Chinese and Hong Kong shares dropped ahead of Chinese factory activity data due this week. Although, Japanese shares gained after data showed Japan’s jobless rate dipped to 2.5% in June from 2.6% in the previous month, marking the first improvement in five months.