Post Session: Quick Review

Indian equity markets traded with limited gains throughout the day and managed to end in green on Friday. Indices hit red territory couple of time during the trade. Otherwise, most part of the time, markets held their gains. Globally, investors eyeing Jerome Powell’s upcoming speech at the Jackson Hole Symposium. As for broader indices, the BSE Mid cap index ended in red, while Small cap index ended in green. 

Markets made slightly positive start and turned volatile amid mixed cues from global markets, ahead of the Kansas City Fed's Jackson Hole Economic Symposium, which gets underway later in the day. Some cautiousness came as a report by ICRA stated that GDP expansion is expected to moderate to a six quarter low of 6.0 per cent in Q1FY25 from 7.8 per cent in Q4FY24, amidst a contraction in Government capital expenditure and a dip in urban consumer confidence. It further added that the growth in the gross value added (GVA) is estimated to ease to 5.7 per cent in Q1FY25 from 6.3 per cent in Q4FY24. Further, in late morning session, indices added some more gains and managed to keep their heads above water. Traders took some support with finance ministry’s Department of Economic Affairs stating that food inflation in India is expected to fall in the coming months as plentiful monsoon rains have replenished water levels in reservoirs. As per latest data, retail inflation in India came down to 3.5 per cent in July 2024, the lowest since September 2019, primarily because of a moderation in food inflation. Domestic sentiments remained positive, as the Reserve Bank of India (RBI) in its latest release ‘the minutes of the Monetary Policy Committee (MPC) meeting’ has said that the MPC expects domestic growth to hold up on the strength of investment demand, steady urban consumption and rising rural consumption. In afternoon session, markets remained in green, as traders got some encouragement after the finance ministry, in the monthly economic report for July, maintained a positive stance on the economy, keeping the growth forecast at 6.5-7 per cent for the current financial year (2024-25/FY25).

On the global front, European markets were trading higher as higher oil prices lifted energy stocks and investors braced for Fed Chair Jerome Powell's Jackson Hole speech later in the day. Asian markets ended mostly in green as investors awaited Fed Chair Jerome Powell's Jackson Hole speech later in the day for confirmation U.S. rate cuts would start in September. Back home, Union Finance Minister Nirmala Sitharaman has said that micro, small and medium industries (MSME) will play an important role in realising the vision to transform India into a developed nation by 2047. Therefore, she said, they have been given special priority in the Union Budget.

The BSE Sensex ended at 81,086.21, up by 33.02 points or 0.04% after trading in a range of 80,883.26 and 81,231.49. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.66%, while Small cap index was up by 0.15%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 0.93%, Industrials up by 0.26%, Capital Goods up by 0.23%, Consumer Disc up by 0.13% and Telecom was up by 0.11%, while Realty down by 2.41%, IT down by 0.79%, Oil & Gas down by 0.76%, TECK down by 0.50% and Basic Materials was down by 0.35% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 1.53%, Sun Pharma up by 1.44%, Bharti Airtel up by 1.40%, ICICI Bank up by 1.05% and Mahindra & Mahindra up by 0.96%. On the flip side, Tech Mahindra down by 1.17%, HCL Tech down by 0.93%, Asian Paints down by 0.86%, Titan Company down by 0.86% and TCS down by 0.80% were the top losers. (Provisional)

Meanwhile, the Finance Ministry in its Monthly Economic Review for July has said that India's economic momentum remains intact despite a somewhat erratic monsoon, and real GDP growth of 6.5-7 per cent projected in the Economic Survey seems appropriate. According to the Monthly Review, the Indian economy has sustained its momentum in the first four months of FY25. It added Goods and Services Tax collections in the first four months of FY25 underwent a level shift pushed up by the widening of the tax base and heightened economic activity.

It said ‘The resilience of domestic activity is also reflected in the strong performance of the manufacturing and services sector purchasing managers' indices. The manufacturing growth has been driven by expansion in demand conditions, a rise in new export orders and growth in output prices’. On the fiscal front, it said, the Union Budget FY25 has laid out a glide path of fiscal consolidation. Supported by strong revenue collection, discipline in revenue expenditure, and robust economic performance, the fiscal deficit is projected to decline.

At the same time, it said, capital expenditure is maintained at high levels, supporting the fledgling private investment cycle. Retail inflation decreased to 3.5 per cent in July 2024, the lowest since September 2019, driven by moderation in food inflation, it said, adding that steady progress in the southwest monsoon has supported kharif sowing. It said replenishing water levels in the reservoir bodes well for the current kharif and upcoming rabi crop production and this will further aid in reducing food inflation in the coming months.

It said manufacturing and services sectors are expanding, according to the Purchasing Managers' indices. Tax collections, especially indirect taxes, which reflect transactions, are growing healthily, and so is bank credit. It said ‘Inflation is moderating, and exports of both goods and services are doing better than they did last year. Stock markets are holding on to their levels. Foreign direct investment is looking up as gross inflows are rising’. As of now, it said, the projection of real GDP growth of 6.5-7.0 per cent for FY25, made in the Economic Survey for 2023-24, seems appropriate.

The CNX Nifty ended at 24,823.15, up by 11.65 points or 0.05% after trading in a range of 24,771.65 and 24,858.40. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Auto up by 4.97%, Coal India up by 1.89%, Tata Motors up by 1.56%, Sun Pharma up by 1.43% and Bharti Airtel up by 1.37%. On the flip side, ONGC down by 1.68%, Wipro down by 1.27%, Divi's Lab down by 1.13%, LTIMindtree down by 1.10% and Asian Paints down by 1.00% were the top losers. (Provisional)

Asian markets settled mostly higher on Friday ahead of the Fed Chair Jerome Powell's Jackson Hole speech later in the day for more cues on the Fed’s plans to begin trimming interest rates. Chinese shares rose, despite tightening trade tensions between China and the European Union. Japanese shares gained. But Japanese yen up as BoJ Governor Kazuo Ueda indicated that officials could hike interest rates again if inflation and the economy performed as expected, weeks after turmoil caused by a surprise increase earlier this month.