Sensex, Nifty end at fresh closing high levels on Monday

Indian equity benchmarks ended Monday's trading session at record closing high levels, tracking foreign fund inflows and a rally in the US markets. According to exchange data, Foreign Institutional Investors (FIIs) bought equities worth Rs 5,318.14 crore on Friday. The markets began the week on a positive note and consolidated during the day, as traders took support with the RBI stating that India’s forex reserves jumped by $7.023 billion to touch a new high of $681.688 billion in the week ended August 23. Some support also came with Defence Minister Rajnath Singh stating that the Indian economy has now improved to Fabulous Five from the Fragile Five before 2014. The minister also added that the Indian economy is one of the fastest-growing large economies now. He also said the government has taken various steps to improve the ease of doing business in the country. Traders also took a note of the government data showing that fiscal deficit narrowed to 17.2 percent of the full year estimate in the first four months of the year, compared with 33.9 percent during similar period in the previous year, as spending remained contained due to elections.

However, gains remained capped as some concern came with private-sector survey showing that India's manufacturing activity growth eased to a three-month low in August as demand softened significantly, casting another shadow over the otherwise robust economic outlook. The HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell for a second month in August, dropping to 57.5 from July's 58.1 and below a preliminary estimate of 57.9. Some anxiety also came as a private report slashed FY25 GDP growth estimates for India to 6.7 percent, down from the previous of 6.9 percent, citing weaker Q2 and soft signals for Q3. The report’s GDP growth projections also stand much lower than the Reserve Bank of India's 7.2 percent forecast. But, markets managed to keep their heads above water throughout the day and ended marginally in green, taking support from the government data showing that Gross Goods and Services Tax (GST) collections in the month of August 2024 grew 10 per cent to about Rs 1.75 lakh crore. In July 2024, gross GST mop-up was Rs 1.82 lakh crore, while in August 2023 it was Rs 1.59 lakh crore. As per the data, gross GST revenues from domestic transactions grew 9.2 per cent to about Rs 1.25 lakh crore. Revenues from import of goods were up 12.1 per cent to Rs 49,976 crore. 

On the global front, European markets were trading lower after a survey revealed that Euro zone manufacturing activity remained mired in contraction in August. Asian markets settled mixed on Monday as Chinese and Hong Kong markets fell on economic concerns. An official survey showed, China's factory activity hit a six-month low in August. A private survey manufacturing activity swung back to growth in August but deterioration in external demand led to new export orders falling for the first time in eight months and at the fastest pace since November 2023. Back home, auto stocks were in focus amid monthly sales numbers. Also, Crisil Ratings asserted that the revenue growth of auto dealers is expected to slow to 7-9 per cent this financial year after a healthy 14 per cent last year, due to a moderation in sales volume growth and modest price hikes by car manufacturers.  

Finally, the BSE Sensex rose 194.07 points or 0.24% to 82,559.84, and the CNX Nifty was up by 42.80 points or 0.17% to 25,278.70.     

The BSE Sensex touched high and low of 82,725.28 and 82,440.93 respectively. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.03%, while Small cap index was down by 0.47%.

The top gaining sectoral indices on the BSE were FMCG up by 0.75%, Utilities up by 0.55%, IT up by 0.37%, Bankex up by 0.32% and Energy up by 0.11%, while Telecom down by 1.65%, Metal down by 1.18%, Industrials down by 0.82%, Capital Goods down by 0.81% and Healthcare down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.23%, Bajaj Finance up by 3.19%, HCL Technologies up by 3.13%, ITC up by 1.60% and Indusind Bank up by 1.55%. On the flip side, NTPC down by 1.57%, Tata Motors down by 1.52%, Mahindra & Mahindra down by 1.04%, Bharti Airtel down by 0.97% and Power Grid Corporation down by 0.61% were the top losers.

Meanwhile, Sanjay Shah, chairman of the Federation of All India Tea Traders Association (FAITTA), has said that sluggish growth in domestic consumption, rising food inflation and slow recovery of exports post the Covid pandemic are some of the challenges faced by the tea industry. He said tea producer associations and the Tea Board India have been concerned over the muted demand growth in the country.

He said ‘As retailers within the FAITTA fold, we are witnessing the market movements from close quarters. It is a fact that loose tea consumption has been giving way to packet tea.’ He said rising levels of food inflation also remain a concern area, as it adversely impacts consumption.

He also said given that incomes do not adjust as fast as prices, high inflation in essentials tend to adversely impact demand for non-essentials. Even within essentials, consumers may shift to lower priced non-premium products. Moreover, he also maintained that there are underlying concerns over the ability of the market to absorb the several rounds of price increases (of tea), which have been inevitable given the sharp rise in main raw material prices last year.

The CNX Nifty traded in a range of 25,333.65 and 25,235.50. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 3.31%, Bajaj Finance up by 3.05%, HCL Technologies up by 2.67%, Hero MotoCorp up by 2.19% and SBI Life Insurance up by 2.01%. On the flip side, Hindalco down by 2.55%, Dr. Reddy's Lab down by 2.32%, Tata Motors down by 1.65%, NTPC down by 1.45% and ONGC down by 1.35% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 15.38 points or 0.18% to 8,361.25, France’s CAC fell 20.85 points or 0.27% to 7,610.10 and Germany’s DAX lost 31.93 points or 0.17% to 18,874.99.

Asian markets settled mixed on Monday as Chinese shares declined after mixed factory activity indicators raised new questions about efforts to stimulate Chinese economy. China's manufacturing activity returned to expansion in August, a widely watched private survey showed on Monday even as the official reading pointed to a deeper contraction. Hong Kong shares fell after Hong Kong-based property developer New World Development Company said it expects to post its first annual loss in two decades. Japanese shares gained slightly tracking Wall Street’s gains Friday and after data showed Japan's manufacturing activity moved closer to stabilization in August. A weaker yen also lifted Japanese automakers’ shares. Meanwhile, Seoul shares rose after a survey revealed that South Korea's factory activity growth quickened in August.