Post Session: Quick Review

Disappointing cues from global markets took their toll on local equity markets on last trading day of week with Nifty and Sensex settling below the psychological 24,750 and 81,000 levels, respectively. Markets did not once break out in green and remained firmly placed in the red territory throughout the day. Globally, traders were cautious about the outlook for global economic growth after some disappointing economic data from the U.S. As for broader indices, the BSE Mid cap index ended with cut of over one percent. 

Markets made gap-down opening and remained lower as fresh dose of weak economic data from the U.S. and Europe reignited recession fears. Some cautiousness came as the India Meteorological Department (IMD) said the monsoon during the remaining two months of the season (August-September) on average is expected to be above-normal with September poised to get more rain than August. The forecast assumes significance as more than normal rains in September, the last month of the four-month season may hurt the standing kharif crops depending on their stage of maturity. Traders overlooked the government data showed that GST collection in July rose 10.3 per cent to over Rs 1.82 trillion, mainly driven by domestic transactions in goods and services. In afternoon session, indices continued to trade in red, as sentiments were negative after Reserve Bank’s latest data showed that an unfavourable base effect brought down the overall non-food credit growth of the banks to 13.9 per cent at Rs 163.46 lakh crore as of June 30, 2024 as against 16.3 per cent in June 2023, even as gold and housing loans rose sharply. The growth in credit card outstanding, meanwhile, declined during the 12-month period. In late afternoon session, markets touched day’s low levels. Traders failed to take any sense of relief from Union Minister of Commerce & Industry, Piyush Goyal’s statement that a stable economy will push India to be among the top 3 world economies.

On the global front, European markets were trading lower amid a broad global equity sell-off and as investors dumped semiconductor stocks following disappointing earnings from Intel. All Asian markets ended lower with Japanese markets leading regional losses. Recession worries gripped markets as weak U.S. manufacturing and labor market data highlighted emerging cracks in the world's largest economy. Back home, CRISIL Ratings has said that rising domestic tourism and increasing propensity to travel overseas will expand the revenue of India's tour and travel operators by 15-17 per cent this fiscal (FY25).

The BSE Sensex ended at 80,981.95, down by 885.60 points or 1.08% after trading in a range of 80,868.91 and 81,345.60. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.19%, while Small cap index was down by 0.58%. (Provisional)

The only gaining sectoral indices on the BSE were Healthcare was up by 0.42%, while Realty down by 3.56%, Metal down by 3.00%, Auto down by 2.97%, IT down by 2.05% and Basic Materials was down by 1.83% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC Bank up by 1.10%, Sun Pharma up by 0.60%, Nestle up by 0.48%, Asian Paints up by 0.30% and Kotak Mahindra Bank up by 0.17%. On the flip side, Maruti Suzuki down by 4.94%, Tata Motors down by 4.42%, JSW Steel down by 3.92%, Larsen & Toubro down by 3.09% and Tata Steel down by 2.85% were the top losers. (Provisional)

Meanwhile, the India Meteorological Department (IMD) has said that India is likely to record above-normal rainfall in August and September, with a good chance of favourable La Nina conditions developing by the end of August. Prediction of above-normal rain means there’s a high possibility of landslides and floods. The monsoon is critical for India’s agricultural landscape, with 52 per cent of the net cultivated area relying on it. The primary rain-bearing system is also crucial for replenishing reservoirs critical for drinking water and power generation across the country.

The IMD said that rainfall over India in August and September would be around 106 per cent of the long-period average of 422.8 mm. The country has so far recorded 453.8 mm of rainfall against the normal of 445.8 mm since June 1, a surplus of two per cent, owing to a wetter-than-normal July after a drier June. IMD chief Mrutyunjay Mohapatra said normal to above-normal rainfall is predicted in most parts of the country in August-September. Below-normal rainfall is expected in parts of the northeast, adjoining east India, Ladakh, Saurashtra and Kutch, and pockets of central and peninsular India.

The IMD chief anticipated deficient rainfall in parts of western Himalayan region in August-September. He said La Nina, a buildup of cooler-than-normal waters in the central Pacific Ocean aiding monsoon rainfall in the Indian subcontinent, could set in by August end. Mohapatra said above-normal maximum temperatures are expected over most parts of the country. “Normal to below-normal maximum temperatures are likely in some areas in the Gangetic plains, central India, and the southeast coast of India.” India recorded nine per cent more rainfall than normal in July, with the central region receiving 33 per cent excess rain. He said that central India, which heavily relies on monsoon rainfall for agriculture, has been receiving good rainfall for the third consecutive monsoon season, benefiting agriculture.

The CNX Nifty ended at 24,717.70, down by 293.20 points or 1.17% after trading in a range of 24,686.85 and 24,851.90. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Divi's Lab up by 1.49%, HDFC Bank up by 1.24%, Dr. Reddy's Lab up by 1.11%, Sun Pharma up by 0.96% and Kotak Mahindra Bank up by 0.60%. On the flip side, Eicher Motors down by 4.87%, Maruti Suzuki down by 4.74%, Tata Motors down by 4.17%, Hindalco down by 3.78% and JSW Steel down by 3.75% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 48.84 points or 0.59% to 8,234.52, France’s CAC fell 66 points or 0.9% to 7,304.45 and Germany’s DAX was down by 267.44 points or 1.5% to 17,815.61. 

Asian markets ended down on Friday, with Japanese shares leading regional losses on strengthening yen and tracking Wall Street’s overnight falls as investors’ fears over a US recession surfaced. Data showed that initial jobless claims in the US rose the most since August 2023 to 249,000 for the week ended July 27 and the US ISM manufacturing index came in at 46.8%, worse than expected and a signal of economic contraction. Meanwhile, investors were eyeing on the US payrolls data, due later in the day that could shed some more light on the state of the economy and the Fed's interest rate path. Chinese shares declined on lingering concerns over the country's economic outlook. Moreover, South Korea’s Kospi dropped on deep losses in heavyweight chipmakers.