Benchmarks end with minor gains on Thursday

Indian equity benchmarks trimmed most of their initial gains but managed to end marginally in green on Thursday, led by gains in Consumer Durables, Realty and Banking stocks. Markets made a gap-up opening and hit fresh all-time highs in line with firm global trends after the US Federal Reserve announced the first cut in policy rate in more than four years. Traders took encouragement as net direct tax collection grew 16.12 per cent to over Rs 9.95 trillion so far this fiscal on higher advance tax mop up. Refunds worth over Rs 2.05 trillion were issued, a 56.49 per cent jump over the same period last fiscal. Traders also took support as Commerce and Industry Minister Piyush Goyal expressed optimism that India's merchandise and services exports will surpass $825 billion despite facing global economic challenges.  

However, profit booking in heavyweight stocks across sectors erased most of their gains in afternoon deals. Some concern came with State Bank of India (SBI) chairman C S Setty’s statement that the Reserve Bank is unlikely to ease the benchmark policy rate during 2024 given the uncertainty over food inflation. But markets managed to keep their heads above water till the end and ended marginally higher, taking support from Finance Minister Nirmala Sitharaman’s statement that India is standing out globally in terms of economic growth and will continue to do so in the next few years. Traders took note of the South Asian nation’s Economic Affairs Secretary Ajay Seth’s statement that the U.S. Federal Reserve’s decision to cut interest rates will not significantly impact inflows into India.  Meanwhile, the Cabinet approved continuation of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) with an allocation of Rs 35,000 crore, to be used for the procurement of agriculture commodities such as pulses, oilseeds and copra at minimum support prices. It has also approved the allocation of Rs 24,475 crore to subsidise NPK fertilisers for the rabi season.  

On the global front, Asian markets settled higher on Thursday, while European markets were trading higher after the U.S. Federal Reserve announced a larger-than-usual 50-bps reduction in borrowing costs and signaled further easing in the months ahead, reflecting its new focus on bolstering the job market.  Back home, on the sectoral front, fertilizer industry stocks were in watch as the government approved Rs 24,474.53 crore subsidy on phosphatic and potassic (P&K) fertilisers for the rabi season of 2024-25 to ensure supply of crop nutrients to farmers at affordable rates. Pharmaceutical stocks also were in focus as a report by CRISIL Ratings stated that the Indian pharmaceutical sector is expected to see revenue growth of 8-10 per cent this financial year, driven by strong exports to regulated markets such as the US and Europe, a recovery in semi-regulated markets including Africa and Asia, and consistent domestic demand.

Finally, the BSE Sensex rose 236.57 points or 0.29% to 83,184.80, and the CNX Nifty was up by 38.25 points or 0.15% to 25,415.80.    

The BSE Sensex touched high and low of 83,773.61 and 83,071.66 respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.53%, while Small cap index was down by 1.06%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.64%, Realty up by 0.47%, Bankex up by 0.46%, FMCG up by 0.40% and Consumer Discretionary up by 0.34%, while Telecom down by 3.89%, Oil & Gas down by 1.81%, Industrials down by 1.56%, Capital Goods down by 1.46% and PSU down by 1.34% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.45%, Kotak Mahindra Bank up by 1.82%, Titan Company up by 1.56%, Nestle up by 1.51% and Hindustan Unilever up by 1.21%. On the flip side, Adani Ports &SEZ down by 1.30%, Larsen & Toubro down by 1.26%, TCS down by 1.14%, JSW Steel down by 0.91% and HCL Technologies down by 0.86% were the top losers.

Meanwhile, expressing optimism over India’s exports growth, the Commerce and Industry Minister Piyush Goyal has said that the country's merchandise and services exports will cross $825 billion despite global challenges. Last year, the exports were $778 billion. He also said that there are plans to open offices in different countries including Singapore, Dubai, Saudi Arabia, possibly one in New York, Silicon Valley, and one in Zurich as part of the Indian government's outreach programme to handhold foreign investors. He said the plan is that through these offices, a person sitting anywhere in the world can buy land in India, can see that piece of land, take all approvals through a single window platform and resolve issues, if any, through video conference. He added it would make it easy to invest in India and do business in India. 

On exports, he said that the current geo-political situation affects everything including trade, economy, interest rates, stock market, and shipping routes. He informed that the commerce ministry is holding a meeting with the shipping industry to look at issues like container shortages, skyrocketing freight rates and how to reduce the impact of the Red Sea crisis. These issues are hurting Indian exporters and importers. According to the government data, India's exports registered a steepest decline in 13-month falling 9.3% in August to $34.71 billion due to global economic uncertainties, while the trade deficit soared to a 10-month of $29.65 billion. Imports increased by 3.3% to $64.36 billion, which is a record high, due to a significant jump in the inbound shipments of gold and silver.

He also said that to attract investments and boost domestic manufacturing, he is meeting countries like Japan, Singapore and Switzerland to set up units in Indian industrial townships. The cabinet has recently approved 12 such townships in states like Bihar, Andhra Pradesh and Maharashtra. Besides, four have already been developed and work is undergoing in four other industrial cities. India is developing modern infrastructure, common effluent facilities, and providing utilities like water, power, digital connectivity in these townships. He further said that the countries are recognising that when India is buying oil from Russia due to sanctions on countries like Iran, and Venezuela, it is helping stabilise the world market. He also said that the commerce and industry ministry is looking at ways to promote trade and investments through national investment promotion agency Invest India.

The CNX Nifty traded in a range of 25,611.95 and 25,376.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.38%, Titan Company up by 1.82%, Nestle up by 1.77%, Kotak Mahindra Bank up by 1.76% and Tata Consumer Products up by 1.26%. On the flip side, BPCL down by 3.41%, Coal India down by 1.52%, ONGC down by 1.34%, Adani Ports & SEZ down by 1.25% and Shriram Finance down by 1.25% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 96.33 points or 1.17% to 8,350.01, France’s CAC rose 145.26 points or 1.95% to 7,590.16 and Germany’s DAX gained 267.52 points or 1.43% to 18,979.01.

Asian markets settled higher on Thursday as investors reacted to the US Federal Reserve’s announcement of a larger-than-usual 50-bps cut in borrowing costs. Japanese shares gained as the yen slumped against the US dollar ahead of Bank of Japan policy meeting due Friday. Moreover, Hong Kong shares rose after beleaguered real estate market is set for some relief after the Hong Kong Monetary Authority today cut its base interest rate for the first time in four years.