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Post Session: Quick Review
Dec-26-2024

Key benchmark indices witnessed limited gains till the end of the session and ended flat on Thursday. During the day, indices wavered between red and green amid monthly F&O expiry. Besides, thin holiday trade on global front influenced the Indian markets. As for broader indices, the BSE Mid cap index ended in green, while Small cap index closed in red.

Markets made positive start and extended their gains tracking broadly positive cues from global peers. Some support came in with a private report that India’s gross domestic product (GDP) growth, which plunged to 5.4 per cent in the July-September quarter, is making a comeback in the October-December period, according to high-frequency indicators cited in the State of the Economy report by the Reserve Bank of India (RBI). Traders took note of report that the government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26. However, soon indices turned volatile, as some concern came with report that net foreign direct investment (FDI) into the country has slowed considerably, with latest data released by the Reserve Bank of India (RBI) in its December bulletin showing that it decelerated to $2.1 billion during April-October 2024 from $7.7 billion a year ago, majorly due to the rise in repatriation and net outward FDI. Besides, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,454.21 crore on Tuesday, according to exchange data. In afternoon session, indices traded between gains and losses. Investors took note of report that Reserve Bank of India (RBI) bulletin has stated that the Indian economy is recovering from the slowdown in momentum witnessed in the September quarter (Q2FY25), driven by strong festival activity and a sustained upswing in rural demand. Bulletin noted that the global economy continues to exhibit resilience with steady growth and moderating inflation. 

On the global front, European markets remain closed on Thursday amid festive season. Asian markets settled mostly higher despite uncertainty about the Federal Reserve's interest-rate path and U.S. President-elect Donald Trump's tariff threats. Back home, Ministry of Statistics and Programme Implementation (MoSPI) in its latest release of the results of Annual Survey of Unincorporated Sector Enterprises (ASUSE) for 2023-24 for the reference period October, 2023 - September, 2024, has showed that there was significant growth in establishments, employment, and productivity in the unincorporated non-agricultural sector, demonstrating the sector's recovery from pandemic-related challenges and its resurgence with renewed momentum.

The BSE Sensex ended at 78,472.48, down by 0.39 points after trading in a range of 78,173.38 and 78,898.37. There were 12 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index gained 0.11%, while Small cap index was down by 0.24%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 0.81%, Power up by 0.45%, Healthcare up by 0.45%, Realty up by 0.39% and PSU was up by 0.28%, while FMCG down by 0.34%, Basic Materials down by 0.30%, Telecom down by 0.16%, Metal down by 0.14% and Industrials was down by 0.12% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports up by 5.19%, Mahindra & Mahindra up by 1.57%, Maruti Suzuki up by 1.49%, Sun Pharma up by 1.31% and Bharti Airtel up by 1.10%. On the flip side, Titan Company down by 1.06%, Asian Paints down by 1.00%, Nestle down by 0.75%, Tech Mahindra down by 0.60% and Zomato down by 0.56% were the top losers. (Provisional)

Meanwhile, finance ministry document has said that the government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26. Finance Minister Nirmala Sitharaman is schedule to present the Budget for 2025-26 in Parliament on February 1.

The Union government is committed to pursuing the glide path of fiscal consolidation as announced in the Budget for FY 2021-22 and to attain a level of fiscal deficit lower than 4.5 per cent of GDP by FY 2025-26, according to finance ministry statements on the half yearly review of the trends in receipts and expenditure and deviation in meeting the obligations of the government under the Fiscal Responsibility and Budget Management Act, 2003.

It said ‘the thrust will be on improving the quality of public spending, while at the same time, strengthening the social security net for the poor and needy. This approach would help further strengthen the nation's macro-economic fundamentals and ensure overall financial stability’. The Budget 2024-25 was presented in the backdrop of global uncertainties caused by the wars in Europe and the Middle East. India's sound macro-economic fundamentals have cushioned the country from the vagaries afflicting the global economy. The document said ‘It has also helped the nation pursue growth with fiscal consolidation. As a result, India retains its pride of place as one of the fastest growing economies in the world. However, risks to growth still remain’.

Total expenditure was estimated at about Rs 48.21 lakh crore, of which, expenditure on revenue account and capital account were estimated at about Rs 37.09 lakh crore and Rs 11.11 lakh crore, respectively, as per the Budget Estimate (BE) of 2024-25. As against total expenditure of Rs 48.21 lakh crore, the expenditure in first half of FY25 was Rs 21.11 lakh crore or about 43.8 per cent of BE. Taking into account the grant for creation of capital assets, the effective capital expenditure (Capex) was projected at Rs 15.02 lakh crore. Gross Tax Revenue (GTR) was estimated at about Rs 38.40 lakh crore with an implied tax-GDP ratio of 11.8 per cent. 

Total non-debt receipt of the Centre was estimated at about Rs 32.07 lakh crore. It comprised tax revenue (net to Centre) of about Rs 25.83 lakh crore, non-tax revenue of about Rs 5.46 lakh crore, and miscellaneous capital receipts of Rs 0.78 lakh crore. With above estimates of receipts and expenditure, the fiscal deficit was pegged at about Rs 16.13 lakh crore in BE 2024-25 or 4.9 per cent of GDP. In H1 of FY25, the fiscal deficit is estimated at Rs 4.75 lakh crore, or about 29.4 per cent of BE. The fiscal deficit was planned to be financed by raising Rs 11.13 lakh crore from market (G-sec + T-Bills), and the remaining amount of Rs 5 lakh crore from other sources, such as NSSF, State Provident Fund, External debt, draw down of cash balance, etc.

The CNX Nifty ended at 23,750.20, up by 22.55 points or 0.10% after trading in a range of 23,653.60 and 23,854.50. There were 30 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports up by 5.22%, Mahindra & Mahindra up by 1.60%, SBI Life up by 1.59%, Shriram Finance up by 1.52% and Maruti Suzuki up by 1.48%. On the flip side, Asian Paints down by 0.95%, Titan Company down by 0.91%, JSW Steel down by 0.80%, Grasim Industries down by 0.79% and Nestle down by 0.78% were the top losers.

Asian markets settled mostly higher in thin holiday trade on Thursday, extending santa claus rally with Hong Kong and Indonesian markets were still shut for the holidays. Although, investors were remained cautious amid uncertainties over the US Federal Reserve's interest-rate path and US President-elect Donald Trump's tariff threats. Chinese shares gained marginally after authorities agreed to issue 3 trillion yuan worth of special treasury bonds next year to stimulate growth and counter tariffs, while the People's Bank of China held the interest rate on the one-year medium-term lending facility steady at 2% and drained the most cash since 2014 with a one-year policy tool. Japanese shares rose amid a weaker yen after Bank of Japan Governor Kazuo Ueda maintained his dovish stance in his speech on Wednesday, saying the central bank must scrutinize the impact of Trump's policy and overseas risks.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,398.08

4.73

0.14

Hang Seng

--

--

--

Jakarta Composite

--

--

--

KLSE Composite

1,613.70

10.71

0.67

Nikkei 225

39,568.06

437.63

1.11

Straits Times

3,761.45

-8.10

-0.22

KOSPI Composite

2,429.67

-10.85

-0.45

Taiwan Weighted

23,246.94

26.81

0.12


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