Benchmarks end on strong note on Monday

Indian equity benchmarks ended on a strong note on Monday, buoyed by positive global cues amid renewed hopes that the US Federal Reserve will start cutting interest rates soon. Foreign fund inflows also drove the markets higher.  As per exchange data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 1,944.48 crore on August 23, 2024.  Likewise, the DII's were net buyers of equities worth Rs 2,896.02 crore. Markets kicked off week's trading session on a positive note and continued to trade higher throughout the day as traders took support with EEPC stating that despite a challenging global environment, India's engineering goods exports continued their upward trajectory in July with a 3.6 per cent year-on-year growth, reflecting the sector's resilience. The Engineering Export Promotion body EEPC India chairman Arun Kumar Garodia said the engineering goods exports were $9.04 billion in July 2024, compared to $8.72 billion a year ago month. Some support also came as the latest data from the Reserve Bank of India showed India’s foreign exchange reserves rose by $4.54 billion to $674.66 billion in the week ended August 16. The total reserves increased on the back of a rise in foreign currency assets, which grew by $3.6 billion during the week.

Markets continued to trade higher in late noon deals, taking support from Union Commerce and Industry Minister, Piyush Goyal’s statement that an MSME should not be looked upon as merely a small enterprise, its thinking should not be small or negative since MSMEs are a big force, they are successful, they are the strength of the nation, are giving employment to millions of countrymen and contribute to nation building. Traders overlooked an analysis of the latest quarterly Periodic Labour Force Survey (PLFS) showing that the jobless rate for women in urban areas worsened during the first quarter (April-June) this financial year, showing the increased barriers for women looking for work. The data shows the women unemployment rate increased in urban areas to 9 per cent in April-June (Q1) from 8.5 per cent in the preceding quarter. Traders also paid no heed towards private report stating that India's economic growth likely moderated and grew at its slowest pace in a year in the April-June quarter due to lower government spending amid a national election that concluded in June. In the April-June quarter, gross domestic product (GDP) was forecast to have grown an annual 6.9%, down from 7.8% in the preceding quarter. 

On the global front, European markets were trading mixed as investors looked ahead to the release of a slew of key German and Eurozone data due this week that will be crucial ahead of the ECB's interest-rate decision in September. Asian markets ended mostly higher on Monday after Federal Reserve Chair Jerome Powell signaled the U.S. central bank is prepared to begin cutting interest rates at its next monetary policy meeting in September. Back home, on the sectoral front, cement industry stocks were in focus as Crisil Ratings said Indian cement makers are expected to undertake capital expenditure worth Rs 125,000 crore during financial years 2025-2027, driven by a healthy demand outlook and a quest to attract market share. 

Finally, the BSE Sensex rose 611.90 points or 0.75% to 81,698.11, and the CNX Nifty was up by 187.45 points or 0.76% to 25,010.60.     

The BSE Sensex touched high and low of 81,824.27 and 81,278.44 respectively. There were 21 stocks advancing against 8 stocks declining, while 1 stock remained unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.66%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Metal up by 2.03%, Realty up by 1.69%, Consumer Durables up by 1.43%, IT up by 1.37% and Oil & Gas up by 1.17%, while Telecom down by 0.03% was the lone losing index on BSE.

The top gainers on the Sensex were HCL Technologies up by 3.47%, NTPC up by 3.22%, Bajaj Finserv up by 2.84%, Tech Mahindra up by 2.50% and JSW Steel up by 2.38%. On the flip side, Adani Ports & SEZ down by 0.54%, Maruti Suzuki down by 0.45%, Nestle down by 0.42%, Kotak Mahindra Bank down by 0.26% and Sun Pharma down by 0.22% were the top losers.

Meanwhile, the Engineering Export Promotion Council (EEPC) of India has said that despite a challenging global environment, India's engineering goods exports continued their upward trajectory in July with a 3.6 per cent year-on-year growth, reflecting the sector's resilience.

The engineering goods exports were $9.04 billion in July 2024, compared to $8.72 billion a year ago month. However, exports to countries like Bangladesh and Russia recorded a decline during the month under review. The sector's cumulative exports for the April-July period also witnessed a healthy 4.18 per cent increase to $36.97 billion.

However, Engineering exports to Bangladesh fell 11.8 per cent year-on-year to $153.78 million in July 2024, as against $174.35 million in the year-ago month. The value of engineering exports to Russia declined 26.8 per cent in July this year to $90.39 million from $123.55 million in the same month last year.

The CNX Nifty traded in a range of 25,043.80 and 24,874.70. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 4.24%, Hindalco up by 3.96%, NTPC up by 3.22%, ONGC up by 2.96% and Bajaj Finserv up by 2.64%. On the flip side, Apollo Hospital down by 1.18%, Hero MotoCorp down by 0.74%, Adani Ports & SEZ down by 0.69%, Grasim Industries down by 0.64% and Eicher Motors down by 0.59% were the top losers.

European markets were trading mixed; Germany’s DAX lost 50.06 points or 0.27% to 18,583.04, while France’s CAC rose 7 points or 0.09% to 7,584.04.

Asian markets ended mostly higher on Monday, tracking Wall Street’s gains last Friday and the 10-year Treasury yield softened after Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium indicated the time has come for policy to adjust. However, Japanese shares declined as the yen grew stronger against the US dollar after hawkish remarks from the Bank of Japan (BoJ) Governor Kazuo Ueda.