Benchmarks end marginally lower on Thursday

Indian equity benchmarks ended marginally lower on Thursday tracking losses in the most valuable firms Reliance Industries, Tata Motors and Nestle amid a negative trend in global markets. Markets made a positive start as traders took support with NITI Aayog CEO B.V.R. Subrahmanyam’s statement that the Free Trade Agreement (FTA) being negotiated between India and the UK is in the final stages with both sides within finger-touching distance to clinch an agreement. The FTA is aimed at significantly enhancing the estimated GBP 38.1 billion a year bilateral trading partnership. Foreign fund inflows also supported the domestic markets. Foreign institutional investors (FII) bought shares net worth Rs 975.46 crore on September 04, 2024, according to the provisional data available on the NSE.

However, key indices failed to hold on to opening gains and slipped into red in late morning deals, amid a lack of major domestic triggers, as investors were focusing on upcoming US economic data to gauge the Federal Reserve's next move. Markets continued to trade with minor losses in late trade even as Reserve Bank of India (RBI) Governor Shaktikanta Das said that India's growth story remains intact. He noted that the central bank’s 7.2 percent GDP growth projection for FY25 is not out of place and structural drivers are playing a bigger role in macroeconomic outcome. RBI Governor further said that data shows fundamentals of growth drivers are gaining momentum. Traders also paid no heed towards the Directorate General of Foreign Trade (DGFT) stating that the government has extended the interest equalisation scheme on pre- and post-shipment rupee export credit for one more month till September 30 this year to promote the country's outbound shipments.

On the global front, European markets were trading mostly in red as global markets remain in risk-off mode amid mounting unease over the U.S. and Chinese economic outlook. Asian markets ended mixed on Thursday as investors digested weak U.S. manufacturing data and waited for more U.S. data this week, including Friday's all-important jobs report for directional cues.  Back home, sector wise, automobile industry stocks were in focus as Federation of Automobile Dealers Associations (FADA) in its latest data has showed that passenger vehicle retail sales in India witnessed a 5 per cent on-year decline in August 2024 on account of delayed customer purchases, poor consumer sentiment and persistent heavy rains. Paper industry stocks also were in watch as a report by Indian Paper Manufacturers Association (IPMA) for 2023-24 noted that India remains the fastest-growing paper market in the world with domestic consumption of packaging paper and paperboard growing at 8.2 per cent in 2023-24. 

Finally, the BSE Sensex fell 151.48 points or 0.18% to 82,201.16, and the CNX Nifty was down by 53.60 points or 0.21% to 25,145.10.    

The BSE Sensex touched high and low of 82,617.49 and 82,130.44 respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.82%, Telecom up by 0.70%, Consumer Discretionary up by 0.47%, IT up by 0.43% and Healthcare up by 0.35%, while Realty down by 0.95%, Capital Goods down by 0.61%, Utilities down by 0.59%, Energy down by 0.55% and Industrials down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 3.11%, ITC up by 0.89%, Infosys up by 0.49%, HCL Technologies up by 0.33% and Tata Steel up by 0.30%. On the flip side, Reliance Industries down by 1.41%, Tata Motors down by 1.08%, Nestle down by 1.00%, Bharti Airtel down by 0.96% and Larsen & Toubro down by 0.80% were the top losers.

Meanwhile, with an aim to accelerate capex (capital expenditure) for the current fiscal (FY 2024-25) and provide requisite operational flexibility in the execution of the Budget, the finance ministry has relaxed norms for big releases above Rs 500 crore for all items of expenditure in the current financial year. This will give a push to government spending which suffered a slowdown for a couple of months due to general elections. Finance Minister Nirmala Sitharaman in the Budget proposed to raise the capital expenditure target by 11.1 per cent to record Rs 11.11 lakh crore for 2024-25.

It added the relaxation permitted is subject to strict compliance by all ministries and departments. All expenditures should be in compliance of the guidelines of the Single Nodal Agency (SNA)/Central Nodal Agency (CNA) and Monthly Expenditure Plan (MEP) and Quarterly Expenditure Plan (QEP) ceiling prepared by ministries for both scheme and non-scheme expenditure. It also said that Financial Advisers would review and freeze the timing of the receipts of dividends of various other non-tax receipts of their respective ministry and department. It added the dividend payments and buyback considerations would be targeted in the H1 part of the financial year.

Earlier, according to a May 2022 memorandum, the release of amounts ranging between Rs 500 crore and Rs 2,000 crore had to be prepared to enable tracking of expenditure and cash flow. The range of dates for such releases may be kept between the 21st and 25th of a month to take advantage of the Goods and Services Tax (GST) inflows. Similarly, bulk expenditure items of over Rs 2,000 crore in value were to be timed during the second fortnight in the last month of the quarter to avail of direct tax receipts inflow. Now, these conditions will not exist.

The CNX Nifty traded in a range of 25,275.45 and 25,127.75. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 3.11%, LTIMindtree up by 1.44%, Wipro up by 1.16%, BPCL up by 1.11% and ITC up by 0.97%. On the flip side, Cipla down by 1.46%, Dr. Reddy's Lab down by 1.28%, Coal India down by 1.28%, Reliance Industries down by 1.26% and Britannia Industries down by 1.22% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 3.18 points or 0.04% to 8,266.42 and France’s CAC fell 43.61 points or 0.58% to 7,457.36, while Germany’s DAX gained 21.04 points or 0.11% to 18,612.89.

Asian markets ended mixed on Thursday with caution ahead of more US data this week, including Friday's all-important jobs report for directional cues. The latest job openings and labour turnover summary report signalled cooling hiring in July and fuelled bets on a big rate cut from the Federal Reserve later this month. Seoul shares declined amid concerns of an economic recession in the United States, while revised data showed South Korea's economy shrank 0.2% in the second quarter on weaker domestic consumption and investment by private businesses. Hong Kong shares fell after a private survey revealed growth in China's services sector activity slowed in August. Japanese shares declined sharply on stronger yen and losses in semiconductor-related shares. Meanwhile, Chinese shares gained after reports that in an efforts to shore up the battered property market and economy, Chinese authorities are considering cutting interest rates on as much as $5.3 trillion of mortgages to lower borrowing costs for millions of families.