Markets witness quiet trading on Friday

It was a quiet trading session for Indian equity benchmarks, which remained in a narrow range during the day and ended flat, influenced by a global wait-and-see approach ahead of the US Fed Chair's speech at Jackson Hole. Middle East tensions also remained on investors' radar as fighting raged on the ground in parts of Palestinian territory despite increased efforts by the U.S. to broker a ceasefire between Israel and Hamas. After a positive start, markets witnessed volatility, 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. 

However, from the late morning, indices held their heads above water till the end of the day, amid foreign fund inflows. As per NSE data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 1,371.79 crore. Some support came as 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) ahead of the release of gross domestic product (GDP) figures for the April-June quarter (Q1). 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.

On the global front, European markets were trading higher, after the confidence among French manufacturers strengthened more than expected in August. The monthly data from the statistical office INSEE revealed that the manufacturing sentiment index climbed to 99 in August from June's 43-month low of 95. Asian markets settled mostly higher on Friday, after Singapore's consumer price inflation held steady in July after easing in the previous month. The data published by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed that the consumer price index rose 2.4 percent on a yearly basis in July, the same as in June, which was the lowest rate since August 2021. The stable level of inflation in July was because a slowdown in accommodation and core inflation was offset by a pickup in private transport costs.

Back home, on the sectoral front, cement industry stocks remained in focus as the rating agency CRISIL in its latest report has said that the Indian cement industry has lined up a capital expenditure (capex) of around Rs 1.25 lakh crore for FY25 to FY27 to meet the growing demand. During this period, the industry is expected to add 130 million tonne of cement grinding capacity, which is a fifth of the existing capacity. Meanwhile, 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.

Finally, the BSE Sensex rose 33.02 points or 0.04% to 81,086.21, and the CNX Nifty was up by 11.65 points or 0.05% to 24,823.15.     

The BSE Sensex touched high and low of 81,231.49 and 80,883.26 respectively. There were 15 stocks advancing against 15 stocks declining on the index.

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

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 discretionary up by 0.13% and Telecom 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 down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.53%, Sun Pharma up by 1.44%, Bharti Airtel up by 1.33%, ICICI Bank up by 1.05% and Mahindra & Mahindra up by 0.97%. On the flip side, Tech Mahindra down by 1.17%, Asian Paints down by 0.98%, Titan down by 0.97%, Infosys down by 0.94% and TCS down by 0.80% were the top losers.

Meanwhile, domestic rating agency ICRA has projected India’s Gross domestic product (GDP) growth to moderate to a six-quarter low of 6 per cent in April-June (Q1FY25) from 7.8 per cent in Q4 FY2024 on account of contraction in government capital expenditure and a dip in urban consumer demand. For the full fiscal 2024-25, ICRA expects GDP to grow 6.8 per cent, lower than the 8.2 per cent clocked in 2023-24.

According to the report, the June quarter of the current fiscal saw a temporary lull in some sectors due to the Parliamentary elections and sluggish government capex at both the central and state levels. Further, it said urban consumer confidence reported a surprising downtick, as per the Consumer Confidence Survey of the Reserve Bank of India. Meanwhile, it said the lingering impact of last year's unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment.

The report said lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors. The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand. On balance, ICRA foresees a transient moderation in India's Gross value added (GVA) and GDP growth in Q1 FY25 to 5.7 per cent and 6 per cent, respectively.

The CNX Nifty traded in a range of 24,771.65 and 24,858.40. There were 21 stocks advancing against 29 stocks declining on the index.

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 Inds. 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.

European markets were trading higher; UK’s FTSE 100 increased 30.86 points or 0.37% to 8,318.86, France’s CAC rose 45.66 points or 0.61% to 7,569.77 and Germany’s DAX gained 117.88 points or 0.64% to 18,611.27.

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.