Markets settle at fresh closing highs

The bulls further tightened the grip over the Dalal Street on Thursday as Indian equity benchmarks climbed to fresh record closing highs led by buying across the sectors and positive global markets amid monthly F&O expiry. The markets started on a flat note, but picked up the pace as the day progressed to hit fresh milestones. Traders took encouragement as Organisation for Economic Co-operation and Development in its Interim Economic Outlook stated that Indian economy will likely log faster growth at 6.7 percent in FY25 compared with 6.6 percent projected earlier. Some support also came as data released by the Ministry of Statistics and Programme Implementation showed that formal job creation picked up for the first four months of the FY25. New subscriptions to all three social security schemes were higher for the first four months, as there was a further pickup in job creation. 

Key gauges extended their gains in late afternoon deals and settled near day’s high levels, as sentiments remained up-beat with Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Amardeep Singh Bhatia’s statement that the government is looking at a target of $100 billion foreign direct investment (FDI) inflows per annum in the coming years, in line with India’s thrust towards the Make in India programme. Sentiments remained optimistic with Finance Minister Nirmala Sitharaman’s statement that India's external debt-to-GDP ratio at 18.7%, its debt service ratio at 6.7% and foreign exchange reserves-to-external debt ratio at 97.4% are within the comfort zone and way better than many middle-income countries.  

On the global front, European markets were trading higher as sentiment was underpinned by expectations of another big U.S. interest rate cut this year and optimism over fresh stimulus measures from China. Asian markets settled mostly higher on Thursday as U.S. memory chip maker Micron forecast higher than expected first-quarter revenue and China's politburo vowed to step up fiscal support to stabilize the beleaguered property sector. Investor sentiment was also underpinned after the Organization for Economic Co-operation and Development (OECD) slightly raised its global economic growth forecast for 2024 and said it expects more Fed rate cuts next year.

Finally, the BSE Sensex rose 666.25 points or 0.78% to 85,836.12, and the CNX Nifty was up by 211.90 points or 0.81% to 26,216.05.     

The BSE Sensex touched high and low of 85,930.43 and 85,106.74 respectively. There were 28 stocks advancing against 2 stocks declining on the index. 

The broader indices ended in red; the BSE Mid cap index fell 0.01%, while Small cap index was down by 0.39%.

The top gaining sectoral indices on the BSE were Auto up by 2.23%, Metal up by 2.08%, Basic Materials up by 1.32%, FMCG up by 0.84% and Consumer Discretionary up by 0.75%, while Consumer Durables down by 0.89%, Capital Goods down by 0.65%, Industrials down by 0.55%, Power down by 0.27% and Healthcare down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.76%, Tata Motors up by 3.08%, Mahindra & Mahindra up by 2.97%, Bajaj Finserv up by 2.91% and Tata Steel up by 2.48%. On the flip side, Larsen & Toubro down by 0.90% and NTPC down by 0.44% were the top losers.

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) in its latest Interim Economic Outlook has said that Indian economy is likely log faster growth at 6.7 percent in fiscal year 2024-25 (FY25) compared with 6.6 percent projected earlier in May. It also noted that growth is expected to increase in FY26 to 6.8 percent, up 20 bps from its May forecast. It said solid domestic demand growth is projected to continue in India.

It said the global economy remained resilient in the first half of 2024, with output growing at an estimated annualised rate of 3.2%. It added domestic demand has buoyed activity in Brazil, India and Indonesia, but has slowed in Mexico with the services sector losing momentum. As per the report, the recovery in global trade continued in the first half of 2024, with growth in trade volumes in both goods and services strengthening, especially in the second quarter. An upturn in US import growth, in part due to stronger equipment investment, and greater trade dynamism in key emerging market economies, including China, the Dynamic Asian Economies, Brazil and India, were key factors behind the stronger-than expected resilience of trade.

It further said inflation in the emerging-market economies is projected to remain generally higher than in the advanced economies, while also easing gradually. On the inflation front, the OECD anticipated that prices to rise faster, at 4.5 percent, compared with its May projection of a 4.3 percent increase. However, it noted that prices will ease to 4.1 percent in FY26 from 4.2 projected earlier, which will be near to the RBI’s mid-point target of 4 percent.

The CNX Nifty traded in a range of 26,250.90 and 25,998.40. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.48%, Grasim Industries up by 3.19%, Tata Motors up by 2.83%, Shriram Finance up by 2.78% and Bajaj Finserv up by 2.59%. On the flip side, Cipla down by 1.47%, ONGC down by 1.24%, Larsen & Toubro down by 0.89%, Hero MotoCorp down by 0.80% and NTPC down by 0.60% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 22.97 points or 0.28% to 8,291.67, France’s CAC rose 102.19 points or 1.35% to 7,667.81 and Germany’s DAX gained 192.41 points or 1.02% to 19,110.91.

Asian markets settled mostly higher on Thursday after US Federal Reserve officials left the door open to another large interest rate cut, and investors were awaiting the release of US GDP data and Fed Chair Jerome Powell's speech for further cues. Meanwhile, the Organisation for Economic Co-operation and Development (OECD) slightly raised its global economic growth forecast for 2024 to 3.2% while maintaining its outlook for 2025. Chinese shares gained after China’s top leaders delivered a forceful pledge to increase fiscal support and stabilize the beleaguered property sector to revive growth. Investors reacted positively to news that China is considering injecting up to 1 trillion yuan ($142.48 billion) into its largest state banks to support the struggling economy. Japanese shares rose as a weaker yen lifted risk sentiment after the minutes of the Bank of Japan's July policy meeting showed board members are split over the future path of interest rates.