Benchmarks snap 3-day fall on Friday

Indian equity benchmarks bounced back after three days of fall and ended in green on Friday led by heavy buying in Banking, Metal and Basic Materials stocks and firm global market trends. The markets made a gap down opening and remained lower in early trade as traders were concerned as a report by the State Bank of India (SBI) stated that India's imported inflation reached a 13-month high in September 2024, growing by 2 per cent. Some concern also came as exchange data showed Foreign Institutional Investors (FIIs) offloaded equities worth Rs 7,421.40 crore on Thursday. However, key gauges erased all of their initial losses and entered in positive terrain in early afternoon deals, as strong recovery in select heavyweights, particularly from the banking sector, led to a swift rebound. Traders took encouragement with World Bank president Ajay Banga’s statement that India's growth rate is the shiniest part in the global economy. He noted that a lot of this is driven by the domestic market. Some optimism also came as direct tax collections have surged 182 per cent to over Rs 19.60 lakh crore in 2023-24 in the 10-year period of Prime Minister Narendra Modi-led government. The latest ‘Time Series Data’ released by the income tax department showed that the corporate tax collections more than doubled to over Rs 9.11 lakh crore in 10 years to 2023-24 fiscal. Personal income tax mop up grew close to four-fold to Rs 10.45 lakh crore during the period.

Sentiments remained positive in late afternoon deals amid reports that much like the Centre, states are likely to continue down the path of fiscal consolidation with 21 states targeting to reduce the combined fiscal deficit to 3.2 percent in FY25 from 3.5 percent in the previous year. Meanwhile, Union Minister of State for Science and Technology (Independent Charge) Jitendra Singh has said that India will be transformed into a science and technology driven global biomanufacturing hub. The Union Minister also expressed need that the country should have a global vision about biochemical manufacturing and global strategies should be devised for this.

On the global front, European markets were trading mostly in green after an ECB survey showed headline inflation in the euro zone will return to the central bank's 2 percent target sooner than earlier thought. The survey is an important input in the ECB's policy deliberations. Asian markets settled mostly higher on Friday even as Middle East tensions persisted, and investors trimmed their bets on Federal Reserve interest-rate cuts this year. Back home, on the sectoral front, banking stocks were in focus as the Reserve Bank of India (RBI) data showed that the pace of bank deposit mobilisation slowed down to 11.79 per cent year-on-year (Y-o-Y) as of October 4, 2024, from 13.6 per cent a year ago. Pharma stocks were in limelight as Union Commerce and Industry Minister Piyush Goyal recently held a crucial meeting with several prominent stakeholders from the pharmaceutical industry to address concerns of pharmaceutical exporters. 

Finally, the BSE Sensex rose 218.14 points or 0.27% to 81,224.75, and the CNX Nifty was up by 104.20 points or 0.42% to 24,854.05. 

The BSE Sensex touched high and low of 81,391.15 and 80,409.25 respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.21%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were Bankex up by 1.84%, Metal up by 1.65%, Basic Materials up by 1.02%, Utilities up by 0.91% and PSU up by 0.74%, while IT down by 1.73%, TECK down by 1.37%, FMCG down by 0.46%, Oil & Gas down by 0.13% and Consumer discretionary down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 5.57%, ICICI Bank up by 2.49%, Tata Motors up by 2.06%, Tata Steel up by 1.94% and JSW Steel up by 1.76%. On the flip side, Infosys down by 4.60%, Asian Paints down by 2.20%, Nestle down by 1.20%, Hindustan Unilever down by 0.78% and Tech Mahindra down by 0.68% were the top losers. 

Meanwhile, Moody's Ratings in its report titled ‘Carbon Transition - India’ has said India has made rapid progress building its renewables capacity, but its fast-growing economy and expanding population will drive up carbon-intensive product demand. Moody's expects India to remain one of the fastest growing economies in the world with real GDP growing 7.2 per cent in 2024 and 6.6 per cent in 2025. The country is likely to sustain similarly high rates of growth over the next decade.

It stated ‘With a rising population and industrialisation, this will drive higher energy needs. Increasing household incomes will also bolster demand for energy-intensive products such as automobiles.’ India's share of global greenhouse gas (GHG) emissions increased to 7.5 per cent in 2022, from 6.7 per cent in 2019.

Further, it said the government's ability to attract private investment and address negative spillovers from decarbonization, including job losses in legacy industries, will determine whether India's credit exposure to carbon transition and social risks rises further. India has committed to achieve net-zero emissions by 2070, and some progress has been made toward its 2030 interim decarbonization milestones. But, the country's fast-expanding economy will continue to drive up GHG emissions. Moreover, it said  India was the world's third-largest GHG emitter as of 2022, but its per capita emissions are still lower than other major economies, highlighting scope for further gains.

The CNX Nifty traded in a range of 24,886.20 and 24,567.65. There were 33 stocks advancing against 17 stocks declining on the index. 

The top gainers on Nifty were Axis Bank up by 5.75%, Wipro up by 3.59%, Eicher Motors up by 2.98%, ICICI Bank up by 2.90% and Shriram Finance up by 2.80%. On the flip side, Infosys down by 4.22%, Britannia Industries down by 1.98%, Asian Paints down by 1.87%, Nestle down by 1.21% and Tech Mahindra down by 0.82% were the top losers. 

European markets were trading mostly in green; France’s CAC rose 39.79 points or 0.52% to 7,623.52 and Germany’s DAX gained 26.86 points or 0.14% to 19,610.25, while UK’s FTSE 100 decreased 26.27 points or 0.31% to 8,358.86. 

Asian markets settled mostly higher on Friday with Chinese and Hong Kong shares led gains after the world’s second-largest economy posted better-than-expected economic growth. Market sentiments improved further after the PBoC released plans for supporting the stock market through share repurchases by companies and major shareholders, while the PBoC also officially launched a swap facility for securities, funds and insurance companies. Japanese shares rose, supported by the yen's weakness at around 150 to the US dollar. The BoJ must focus on the economic impact of unstable markets and risks from overseas, Governor Kazuo Ueda said, suggesting the Japanese central bank was in no rush to raise interest rates further.