Post Session: Quick Review

Indian markets maintained their gains since morning but selling pressure in last leg of trade forced markets to end flat on Wednesday amid Reserve Bank of India kept repo rate unchanged. Investors are now focusing on upcoming inflation data and corporate earnings. As for broader indices, the BSE Mid cap index and Small cap index ended with gains of over a percent.

Markets made positive start and remained higher tracking overnight gains on Wall Street. Some support also came as Bharatiya Janata Party (BJP) successfully returned to power for a third consecutive term in Haryana, achieving its best-ever vote share and seat tally. Meanwhile, oil Minister Hardeep Singh Puri said that India will be able to navigate through any oil supply shock that may result from the potential widening of the conflict in the Middle East. He said while India, the world's third largest oil importing and consuming nation, is more than 85 per cent dependent on imports to meet its crude oil needs, the situation is manageable and there is no need for concern. In afternoon session, indices off from day’s high levels but continued to trade in green. Sentiments were positive as Reserve Bank of India (RBI) changed the policy stance to 'Neutral' from 'Withdrawal of Accomodation'. It also kept its key repo rate unchanged at 6.5 per cent for a tenth straight policy. However, in final hour of the trade, markets entered into red territory and ended just below neutral lines ahead of corporate earnings.

On the global front, European markets were trading higher after reports emerged that China's finance ministry will convene a press conference on Saturday to introduce work on strengthening countercyclical adjustments of fiscal policy and promoting economic development. Asian markets ended mixed as China's stimulus rally fizzled out, the conflict in the Middle East persisted and investors awaited Federal Reserve meeting minutes as well as U.S. inflation data for interest rate clues. Back home, CRISIL Ratings in its latest report has said that schools and colleges will report 12-14% revenue growth this fiscal (FY25), riding on higher enrolments, which allows for upward fee revisions, and students scouting for new course offerings.

The BSE Sensex ended at 81,467.10, down by 167.71 points or 0.21% after trading in a range of 81,342.89 and 82,319.21. 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 1.06%, while Small cap index was up by 1.21%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.21%, Healthcare up by 1.68%, Power up by 1.18%, Consumer discretionary up by 1.09% and Industrials was up by 0.96%, while FMCG down by 1.31%, Energy down by 0.78%, Oil & Gas down by 0.64% and Metal was down by 0.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.10%, Tech Mahindra up by 1.92%, SBI up by 1.91%, Maruti Suzuki up by 1.80% and Bajaj Finance up by 1.57%. On the flip side, ITC down by 3.17%, Nestle down by 2.21%, Hindustan Unilever down by 1.68%, Reliance Industries down by 1.64% and Larsen & Toubro down by 1.13% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for a tenth time in row. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to change the monetary policy stance to ‘neutral’ and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

On the inflation front, the MPC highlighted that headline inflation declined sharply to 3.6 and 3.7 per cent in July and August respectively from 5.1 per cent in June. Going forward, the September inflation print may see a significant pick-up as base effects turn adverse and food prices register an upturn. Food inflation, however, is expected to ease by Q4:2024-25 on better kharif arrivals and rising prospects of a good rabi season. CPI inflation for 2024-25 is projected at 4.5 per cent with Q2 at 4.1 per cent; Q3 at 4.8 per cent; and Q4 at 4.2 per cent. CPI inflation for Q1:2025-26 is projected at 4.3 per cent.

On the economic growth front, in India, real gross domestic product (GDP) registered a growth of 6.7 per cent in Q1:2024-25, driven by private consumption and investment. Looking ahead, the agriculture sector is expected to perform well on the back of above normal rainfall and robust reservoir levels, while manufacturing and services activities remain steady. On the demand side, healthy kharif sowing, coupled with sustained momentum in consumer spending in the festival season, augur well for private consumption. Consumer and business confidence have improved. Real GDP growth for 2024-25 is projected at 7.2 per cent with Q2 at 7.0 per cent; Q3 at 7.4 per cent; and Q4 at 7.4 per cent. Real GDP growth for Q1:2025-26 is projected at 7.3 per cent.

The CNX Nifty ended at 24,981.95, down by 31.20 points or 0.12% after trading in a range of 24,947.70 and 25,234.05. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Cipla up by 2.43%, Trent up by 2.22%, Tata Motors up by 2.10%, SBI up by 2.04% and Maruti Suzuki up by 1.83%. On the flip side, ITC down by 3.20%, Nestle down by 2.55%, Hindustan Unilever down by 1.77%, Britannia down by 1.73% and ONGC down by 1.69% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 44.8 points or 0.54% to 8,235.41, France’s CAC rose 16.84 points or 0.22% to 7,538.16 and Germany’s DAX was up by 31.14 points or 0.16% to 19,097.61.

Asian markets ended mixed on Wednesday ahead of US Federal Reserve’s meeting minutes as well as US inflation data for further clues on interest rate cuts, while persisting conflict in the Middle East has also weighed on market sentiments. Chinese shares dropped on severe selling pressure after officials failed to boost confidence in stimulus plans aimed at reviving the economy. Hong Kong shares fell after reports that China's finance ministry is set to hold a media briefing on fiscal policy on Saturday. Meanwhile, Japanese shares advanced by tracking Wall Street gains overnight and as tech shares outperforming due to easing of US Treasury yields.