Markets end on higher note on positive global cues

Friday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered splendid gains, led by massive buying in index majors Tech Mahindra, Tata Motors and Mahindra & Mahindra. This uplift followed U.S. economic data that eased recession fears in the world's largest economy, contributing to a global market rally. Markets made a gap-up opening as traders took support with Prime Minister Narendra Modi’s statement that the government is taking steps to transform India into a global manufacturing hub, and he called for improving the quality of products and services to attain international standards. However, markets lost some of their gains in the early hours but soon gained traction due to strong buying interest in select heavyweight stocks. Traders took encouragement as Amitabh Kant, former CEO of NITI Aayog and G20 Sherpa, highlighted India’s rapid transformation into the third-best startup ecosystem globally, with 135 unicorns and over 1.4 lakh startups.

Markets extended gains in late afternoon deals and settled near day’s highs, as sentiments remained up-beat with a private report stating that the rural economy of India has emerged as a significant driver of economic growth, outpacing urban areas largely due to increased government spending in the recent quarters. Traders took note of report that India, the world's third largest oil consuming and importing nation, in July bought $ 2.8 billion worth of crude oil from Russia, second only to China, which remains the largest importer of Russian oil. Traders overlooked the commerce ministry’s data showing that India's merchandise export dipped 1.2 per cent to $33.98 billion in July 2024 from $34.39 billion in the year-ago month. Imports increased by about 7.45 per cent to $57.48 billion in July 2024 against $53.49 billion a year ago due to a jump in the inbound shipments of crude oil, silver and electronic goods. The trade deficit, or the gap between imports and exports, during the month under review stood at $23.5 billion.   

On the global front, European markets were trading mostly in green after official data showed that U.K. retail sales volume rebounded in July - dashing investor hopes of a Q4 Bank of England rate cut. U.K. retail sales increased 0.5 percent on a monthly basis in July, following a revised 0.9 percent fall in June as summer discounting and the European football Championship boosted department stores and sports equipment stores sales. Asian markets settled higher on Friday, as encouraging U.S. data on inflation and retail sales allayed recession fears in the world's largest economy but prompted traders to push back expectations for aggressive rate cuts by the Federal Reserve.

Back home, on the sectoral front, edible oil industry stocks were in focus as industry body SEA said India's edible oil imports declined marginally by 1.6 per cent to 11.935 million tonnes in the first nine months of 2023-24 marketing year ending October. Pharma stocks were also in watch after a report that India's medicine and antibiotics exports have started gaining significant market share in the US, with the Union government focusing on boosting domestic manufacturing of pharmaceutical products.

Finally, the BSE Sensex rose 1330.96 points or 1.68% to 80,436.84, and the CNX Nifty was up by 397.40 points or 1.65% to 24,541.15.    

The BSE Sensex touched high and low of 80,518.21 and 79,306.69 respectively. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.80%, while Small cap index was up by 1.70%.

The top gaining sectoral indices on the BSE were IT up by 2.72%, Realty up by 2.45%, TECK up by 2.23%, Auto up by 1.90% and Basic Materials up by 1.89%, while there were no losing sectoral indices on the BSE. 

The top gainers on the Sensex were Tech Mahindra up by 4.02%, Tata Motors up by 3.47%, Mahindra & Mahindra up by 3.45%, TCS up by 2.91% and HCL Technologies up by 2.65%. On the flip side, Sun Pharma down by 0.03% was the lone loser.

Meanwhile, amid concerns over the spurt in imports of precious metals from the UAE under the trade agreement, Commerce Secretary Sunil Barthwal has said that India is seeking review of certain provisions of the free trade agreement (FTA) with the UAE, which came into force on May 1, 2022. He said that India is in discussions with the UAE and there are various issues which can be discussed in the review.

Barthwal said ‘As regards Comprehensive Economic Partnership Agreement (CEPA), there are two things - one is the value addition norms and the second is reduction (of customs duties). So we are in discussion with them and there are various issues which are discussed under CEPA review. So, I think we are seeking a review with them and once we get it, then we will look at all the issues holistically’.

He further noted that ‘When a country give a concessional rate (of duty), there is a condition of meeting rules of origin. So when we do review, we look at all the aspects of it...whether the rules of origin are met or not and what is the future course of action that we will do.’ Further, when asked whether the government is looking at reviewing the new authorisation regime for monitoring imports of certain IT hardware products, the secretary said, ‘When the appropriate time comes, we will take the call’.

The CNX Nifty traded in a range of 24,563.90 and 24,204.50. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Wipro up by 4.23%, Tech Mahindra up by 3.98%, Grasim Industries up by 3.65%, Mahindra & Mahindra up by 3.45% and Tata Motors up by 3.36%. On the flip side, Divi's Lab down by 0.62%, SBI Life Insurance down by 0.07% and Dr. Reddy's Lab down by 0.02% were the top losers.

European markets were trading mostly in green; France’s CAC rose 19.63 points or 0.26% to 7,443.00 and Germany’s DAX gained 115.8 points or 0.64% to 18,299.04, while UK’s FTSE 100 decreased 32.08 points or 0.38% to 8,315.27.

Asian markets settled higher on Friday, as the robust US economic data trivialized jitters over economic slowdown of world's biggest economy. Optimism that Federal Reserve will reduce interest rates by 25 basis points by September and anticipations of fresh fiscal stimulus from Beijing also boosted investor confidence. Nikkie gained the most among Asian indices and marked its second largest daily gain for the year, as the earning prospects of exporters got boosted by the plunge of the local currency yen. The robust Q2 economic data of Japan overshadowed woes about BoJ's hawkish shift and eased fears of a massive carry unwind.