Post Session: Quick Review

After scaling fresh highs in previous session, Indian equity markets witnessed volatility in Friday’s trade and closed in red amid profit booking. Markets ended the session near day’s low levels ahead of macroeconomic data i.e. HSBC India Manufacturing Purchasing Managers' Index (PMI). The broader indices, the BSE Mid cap index and Small cap index ended in green. 

Markets made positive start and remained in green for little time following overnight gains on Wall Street. Besides, foreign fund inflows added some support. As per NSE data, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 629.96 crore. Traders took note of report that finance ministry report said India is set to achieve 6.5-7 per cent GDP growth in the current financial year as indicated by the movements in high-frequency indicators till August. However, markets wiped out their initial gains and entered into red terrain in late morning session. Soon, indices extended their losses, as traders were cautious amid a private report stating that India’s urban-rural income gap has increased over the last seven years, as urban incomes have outpaced rural areas for both salaried and self-employed people. Besides, Moody’s said that nearly half of India’s population will reside in areas vulnerable to inland or coastal flooding. The international firm noted that while 622 million people or 44 percent of the population will be prone to inland flooding, another 48 million will be prone to coastal flooding. In late afternoon session, markets continued to trade under pressure and settled in red as traders sold out their riskier stocks. 

On the global front, European markets were trading higher ahead of the crucial PCE-based inflation update due from the U.S. on Friday that could sway the Fed's plans regarding further monetary easing. Asian markets ended mixed as Japan's leading index increased less than initially estimated in July from a 7-month low in June. The latest data from the Cabinet Office showed that the leading index, which measures future economic activity, rose to 109.3 in July from 109.1 in the previous month. In the flash report, the score was 109.5. Meanwhile, the coincident index rose to 117.2 in July from 114.1 a month ago. The latest reading was revised up from 117.1. The coincident index measures the current economic situation. Back home, India's ranking in the Global Innovation Index has improved, climbing one place to 39th rank out of 133 economies in the Global Innovation Index (GII) 2024. Last year, the country was ranked 40th.

The BSE Sensex ended at 85,571.85, down by 264.27 points or 0.31% after trading in a range of 85,474.58 and 85,978.25. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.29%, while Small cap index was up by 0.07%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.57%, Energy up by 2.12%, PSU up by 1.19%, Metal up by 1.02%, Healthcare up by 0.70% while, Realty down by 1.01%, Bankex down by 0.89%, Utilities down by 0.82%, Telecom down by 0.65% and Power was down by 0.52% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.66%, Reliance Industries up by 1.72%, Titan Co up by 1.50%, HCL Tech up by 1.31% and Bajaj Finserv up by 1.10%. On the flip side, Power Grid down by 3.03%, ICICI Bank down by 1.83%, Bharti Airtel down by 1.74%, HDFC Bank down by 1.65% and Kotak Mahindra Bank down by 1.55% were the top losers. (Provisional)

Meanwhile, Finance Ministry in its latest the Monthly Economic Review for August has said that India is set to achieve 6.5-7 per cent Gross Domestic Product (GDP) growth in the current financial year (FY25) as indicated by the movements in high-frequency indicators till August. The recent developments analysed indicate strong foundations of macroeconomic stability in India with steady growth, investment, employment and inflation trends, a strong and stable financial sector and a resilient external account, including a comfortable foreign exchange reserve position.

It said ‘A challenge on the macroeconomic front is of navigating the continuing uncertainty in global economic prospects. We will likely encounter a cycle of policy rate cuts globally amid fears of a recession in advanced economies and continuing geopolitical conflicts’. The report said, the GDP growth of 6.7 per cent in Q1 FY25 and the movements in high-frequency indicators till August fit well with the real GDP growth projection of 6.5-7 per cent for FY25, provided by the Economic Survey 2023-24. It said for the remaining part of the financial year, a reasonable expectation is that public expenditure will pick up, providing added growth and investment impetus.

It further said in the farm sector, higher kharif acreage is already visible. Adequately replenished reservoir levels will potentially give a fillip to the upcoming Rabi crops as well. It added the skewed spatial distribution of rain may have an impact on farm output in a few regions. However, in the absence of any serious adverse climate shocks, rural incomes and demand should get stronger, and food inflation will be milder. There are also incipient signs of strains in certain sectors. 

The CNX Nifty ended at 26,178.95, down by 37.10 points or 0.14% after trading in a range of 26,151.40 and 26,277.35. There were 29 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 6.43%, Cipla up by 3.13%, Sun Pharma up by 2.65%, Coal India up by 1.89% and Reliance Industries up by 1.88%. On the flip side, Power Grid down by 3.06%, Bharti Airtel down by 2.06%, HDFC Bank down by 1.73%, ICICI Bank down by 1.69% and Kotak Mahindra Bank down by 1.57% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 35.81 points or 0.43% to 8,320.72, France’s CAC rose 28.96 points or 0.37% to 7,771.05 and Germany’s DAX was up by 149.92 points or 0.78% to 19,388.28.

Asian markets settled mostly down on Friday with nervousness and anxiety surrounding the release of the PCE-based inflation readings from the United States, due later in the day for further cues on the path of policy rates. South Korean shares declined, tracked by significant drop in biopharmaceutical and auto stocks. However, Chinese shares have surged to their best week since 2008 after China's raft of economic stimulus measures including $114 billion war chest to support capital markets. Japanese shares gained on softer yen, ahead of Friday's leadership contest in the ruling Liberal Democratic Party that prompting investors to assess its impact on interest rate hikes.