Post Session: Quick Review

Key benchmark indices ended flat with negative bias on Monday ahead of the consumer price index (CPI) based inflation data for the month of July, and Index Industrial Production (IIP) data for the month of June, which are due later in day. Most part of the day, indices managed to trade in green. Investors ignored Hindenburg Research's allegations that the Indian market regulator's chairperson had stake in some obscure offshore entities used in the alleged Adani money siphoning scandal. 

Markets made negative start and remained lower amid mixed cues from Asian counterparts as well as cautiousness over Hindenburg-SEBI row. Further, markets wiped out all their losses and entered into green with latest data from the Reserve Bank of India showing that India's foreign exchange reserves rose by $7.53 billion to a new record high of $674.91 billion for the week ended August 2. The total reserves increased on the back of a rise in foreign currency assets, which rose by $5.16 billion to $592.03 billion during the week. Meanwhile, Comptroller and Auditor General (CAG) stating that the central government was back on the path of fiscal consolidation in 2021-22, having ‘recovered ground’ from the pandemic year, and its ability to sustain debt improved. In afternoon session, markets maintained their gains as sentiments remained upbeat, as the Reserve Bank of India (RBI) in its latest report has showed that India’s outward foreign direct investment (OFDI) commitments surged 33.93% to $2915.16 million in July 2024 as against $2176.67 million in July 2023. Sequentially also, they rose from $2189.96 million in June 2024. Outbound FDI, expressed as a financial commitment, comprises three components: equity, loans, and guarantees. However, in last leg of trade, indices failed to hold their gains and slipped below neutral lines amid cautiousness about key macroeconomic data.

On the global front, European markets were trading mostly in green as investors prepared for U.S. inflation data to gauge the Federal Reserve's monetary policy path and a deluge of other key data from Europe. Asian markets settled mostly higher on Monday ahead of big reports this week on the state of the U.S. economy. Back home, Finance Minister Nirmala Sitharaman has exhorted banks to focus on their core business and explore new ways to attract deposits, as household savings are increasingly shifting towards alternate investment products.

The BSE Sensex ended at 79,648.92, down by 56.99 points or 0.07% after trading in a range of 79,226.13 and 80,106.18. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.04%, while Small cap index was up by 0.51%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.30%, Consumer Durables up by 0.91%, Oil & Gas up by 0.90%, Metal up by 0.55%, IT up by 0.36% while, Utilities down by 1.04%, FMCG down by 0.67%, Power down by 0.62%, PSU down by 0.34%, Auto down by 0.21% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 1.80%, Infosys up by 1.51%, JSW Steel up by 1.47%, Tata Motors up by 0.81% and HDFC Bank up by 0.70%. On the flip side, NTPC down by 2.02%, Adani Ports down by 2.02%, Power Grid down by 1.43%, SBI down by 1.36% and Nestle down by 1.20% were the top losers. (Provisional)

Meanwhile, Crisil in its report has said that the Reserve Bank of India (RBI) may begin lowering interest rates around October, provided that external factors like weather conditions and international commodity prices do not cause any disruptions. The credit rating agency further anticipated that it expects ‘two rate cuts this fiscal’. It said that the decision of the Monetary Policy Committee (MPC) decision to hold rates in its recent announcement was due to the elevated food inflation. The climate conditions such as weather events are frequently changing and they need to be monitored. 

Going ahead, the rating agency anticipated that the macroeconomic environment would be better, creating a background for a rate cut. It further said ‘The food challenge to a rate cut is expected to ease as agriculture prospects look better than last year. The monsoon has been above normal (7 per cent above the long period average as of August 7), and sowing has picked up across major foodgrains. As agriculture prospects become clearer by September, we expect it to pave the way for a rate cut’.

Noting a likely uptick in core inflation, the report added that factors such as international freight costs, geopolitical risks to crude oil prices, and hikes in domestic telecom tariffs could affect this indicator. Anticipating the growth, it added ‘The pace of growth of the economy is expected to ease this year, with lower fiscal support as the government pursues fiscal consolidation’. In a move reflecting its cautious approach amid ongoing economic uncertainties, the RBI had decided to keep the repo rate unchanged at 6.5 per cent.

The CNX Nifty ended at 24,347.00, down by 20.50 points or 0.08% after trading in a range of 24,212.10 and 24472.80. There were 22 stocks advancing against 27 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were ONGC up by 2.63%, Hero MotoCorp up by 2.01%, Axis Bank up by 1.89%, Infosys up by 1.51% and JSW Steel up by 1.35%. On the flip side, NTPC down by 2.39%, Adani Ports down by 2.11%, Dr. Reddy's Lab down by 1.81%, Britannia down by 1.65% and SBI down by 1.42% were the top losers. (Provisional)

European markets were trading mostly in green; UK’s FTSE 100 increased 35.1 points or 0.43% to 8,203.20 and Germany’s DAX was up by 0.52 points or 0% to 17,723.40. On the flip side, France’s CAC was down by 15.72 points or 0.22% to 7,253.99. 

Asian markets settled mostly higher on Monday, tracking Wall Street’s gains last Friday as concerns over a possible recession in the United States eased following better-than-expected unemployment data. Meanwhile investors were awaited more cues from key US inflation and retail sales data due later in the week for further insight into the health of the world’s biggest economy. However, some gains were limited by growing tensions in the Middle East. Japanese market was closed for Mountain Day holiday in Japan.