Benchmarks end marginally in green on Thursday

Indian equity benchmarks erased most of their initial gains but managed to end marginally in green on Thursday due to gains in Banking, Power and Utilities stocks amid a firm trend in global markets. Markets opened on a positive note and extended gains in morning deals, as traders took support after the Reserve Bank of India’s (RBI) forward looking survey stated that consumer confidence improved in the September 2024 Survey round compared to the previous round in July due to better perceptions about the general economic, employment, and income conditions. Current situation index (CSI) improved by 0.8 points to 94.7 though it remained below the threshold level of 100. 

But, key gauges came off from day’s highs in late morning deals and remained rangebound for the rest of the session. Traders took some support as Reserve Bank of India (RBI) in its latest ‘Industrial Outlook Survey of the Manufacturing Sector for Q2:2024-25’ has said that manufacturers maintained their optimism on demand conditions for Q3:2024-25. Besides for Q3:2024-25, cost of financing and salary outgo are likely to rise, while pressures from raw material cost are expected to ease, and selling price growth momentum may continue. The business expectations index (BEI) improved to 120.3 in Q3:2024-25 from 119.1 in the previous quarter. But markets ended with minor gains as traders were cautious as private report said that India's retail inflation in September likely overshot the Reserve Bank of India's (RBI) 4 per cent medium-term target for the first time since July due to a persistent rise in vegetable prices and a lower year-ago base. 

On the global front, European markets were trading mostly in red as traders now looked ahead to the release of US consumer price and producer price inflation data for more clarity on how aggressively the Fed will lower rates in the coming months. Asian markets settled mostly higher on Thursday following the broadly positive cues from Wall Street, as traders remained optimistic about more interest rate cuts by the US Fed, and several other central banks. The minutes from the US Fed's September meeting showed officials agreed to cut interest rates, but were unsure how aggressive to get.

Finally, the BSE Sensex rose 144.31 points or 0.18% to 81,611.41, and the CNX Nifty was up by 16.50 points or 0.07% to 24,998.45.      

The BSE Sensex touched high and low of 82,002.84 and 81,538.94 respectively. There were 15 stocks advancing against 15 stocks declining on the index. 

The broader indices ended mixed; the BSE Mid cap index fell 0.36%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Bankex up by 1.11%, Power up by 0.75%, Utilities up by 0.70%, Industrials up by 0.65% and PSU up by 0.52%, while Healthcare down by 1.39%, IT down by 1.07%, TECK down by 0.87%, Realty down by 0.42% and FMCG down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 4.16%, HDFC Bank up by 1.75%, Indusind Bank up by 1.43%, Power Grid Corporation up by 1.39% and Maruti Suzuki up by 1.34%. On the flip side, Tech Mahindra down by 2.32%, Sun Pharma down by 2.27%, Infosys down by 1.78%, Titan Company down by 1.33% and Tata Motors down by 1.10% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest ‘Industrial Outlook Survey of the Manufacturing Sector for Q2:2024-25’ has said that manufacturing companies reported some moderation in demand expansion during Q2:2024-25 as reflected in their assessment on production, order books, capacity utilisation, employment and overall business situation.

As per the report, pressures from cost of raw material, financing cost and salary outgo were assessed to have tempered and, in accordance, sentiments on growth in selling prices and profit margins also moderated. It said that the business assessment index (BAI) remained in expansion zone but moderated to 108.3 in Q2:2024-25 from 110.8 in the previous quarter.

However, manufacturers maintained their optimism on demand conditions for Q3:2024-25. Besides for Q3:2024-25, cost of financing and salary outgo are likely to rise, while pressures from raw material cost are expected to ease, and selling price growth momentum may continue. The business expectations index (BEI) improved to 120.3 in Q3:2024-25 from 119.1 in the previous quarter

Going forward, manufacturers polled for better expectations on production, order books, employment, capacity utilisation and overall business situation during Q4:2024-25 and Q1:2025-26. For Q4:2024-25 and Q1:2025-26, input cost pressures are likely to continue for manufacturers, who expect to retain pricing power and increase in selling prices on the back of robust demand conditions.

The CNX Nifty traded in a range of 25,134.05 and 24,979.40. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 3.84%, JSW Steel up by 1.85%, HDFC Bank up by 1.71%, Bharat Electronics up by 1.59%, Indusind Bank up by 1.51%. On the flip side, Cipla down by 3.37%, Tech Mahindra down by 2.82%, Trent down by 2.26%, Sun Pharma down by 1.86% and Infosys down by 1.80% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 8.73 points or 0.11% to 8,235.01 and France’s CAC fell 12.64 points or 0.17% to 7,547.45, while Germany’s DAX gained 3.77 points or 0.02% to 19,258.70.

Asian markets settled mostly higher on Thursday tracking Wall Street gains overnight ahead of key US inflation readings due this week that could influence the Fed's interest-rate trajectory. Meanwhile, minutes from the Federal Reserve's September meeting released overnight showed a substantial majority of Federal officials at the meeting favoured the larger half-point rate cut, but were divided over the economic outlook and are in no rush for another half-point cut. Chinese and Hong Kong shares led gains on expectations that Chinese policymakers will announce more stimulus to revive growth at a press briefing by China's finance ministry on Saturday. Japanese shares gained as China's central bank PBoC launched a new Swap Facility with an initial scale of 500 billion yuan ($71 billion) to bolster the capital market.