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Domestic indices trade in red after cautious start amid foreign fund outflows
May-09-2024

Indian equity benchmarks made cautious start amid mixed cues from global peers. Higher bond yields and looming uncertainty over the ceasefire deal in Gaza kept investors on sidelines. Domestic indices soon march towards southward and are trading lower with marginal cut in early deals amid foreign fund outflows. Foreign Institutional Investors have net sold Rs 6,669.10 crore worth of Indian shares on May 08. Some cautiousness crept in amid a private report that India's consumer price inflation is likely to have eased to 4.80% in April, just shy of March's rate as food inflation remains sticky. As per the report, with parts of the country experiencing a heatwave, food prices continue to pose an additional risk to India's inflation trajectory. However, downside remained capped as Chief Economic Adviser V Anantha Nageswaran said there was a high possibility of GDP growth touching 8 per cent in FY24 on the back of robust growth registered during the three quarters of the financial year ended March 2024. 

On the global front, Asian markets are trading mixed, following the mixed cues from Wall Street overnight, as traders remained cautious and have been reluctant to make more significant moves amid lingering uncertainty over the outlook for interest rates after recent economic data and hawkish comments from some US Fed officials. The Fed is still widely expected to lower rates sometime in the third quarter. Indonesia market is closed for Ascension Day holiday.

Back home, shares of NBFCs, mainly those involved in the business of Gold loans, are in focus after the RBI directed these firms not to lend in cash of more than Rs 20,000 for gold loans, citing the Income Tax act. In stock specific development, Hero MotoCorp surged on healthy Q4. The company posted a net profit of Rs 1,016.05 crore for the quarter ending March 31, 2024, an 18% rise from Rs 858.93 crore reported in the same period last year. L&T slipped post Q4 results. The company reported a 10% increase in its consolidated net profit, reaching Rs 4,396 crore.

The BSE Sensex is currently trading at 73270.98, down by 195.41 points or 0.27% after trading in a range of 73184.82 and 73499.49. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.03%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Auto up by 1.95%, Consumer Discretionary up by 0.94%, Consumer Durables up by 0.59%, Realty up by 0.24% and Utilities up by 0.17%, while Capital Goods down by 1.17%, FMCG down by 0.75%, Industrials down by 0.73%, Energy down by 0.72% and Oil & Gas down by 0.60% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.94%, Tata Motors up by 1.34%, Titan Company up by 1.30%, Maruti Suzuki up by 1.28% and HCL Technologies up by 1.06%. On the flip side, Larsen & Toubro down by 3.74%, Tech Mahindra down by 1.22%, Nestle down by 1.12%, TCS down by 1.09% and JSW Steel down by 0.99% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, Chief Economic Adviser V Anantha Nageswaran has said there was a high possibility of Gross Domestic Product (GDP) growth touching 8 percent in FY24 on the back of robust growth registered during the three quarters of the financial year ended March 2024. The country’s GDP grew by 8.4 percent in the third quarter ended December 2023. In the second quarter, the GDP growth was 7.6 percent while 7.8 percent in the first quarter. He said ‘The IMF has projected a growth rate of 7.8 percent for FY24. But if you look at the trajectory of growth in the first three quarters, obviously, the possibility that the growth rate touches 8 percent is quite high’. This is higher than RBI's India growth estimate of 7.5 percent for 2023-24.

For the ongoing financial year, he said the International Monetary Fund has an estimate of 6.8 percent but the Reserve Bank of India expects a 7 percent GDP growth for FY25. He said ‘If that materializes, of course, it will be the fourth consecutive year after COVID starting from FY22 that the economy will have grown at 7 percent or more. The RBI forecast of 7 percent for FY25 turns out to be either correct or even underestimated, then it would be the fourth consecutive year of 7 or higher growth rate’. However, he said, a lot would depend on how the monsoon shapes up. Although the expectations are that there will be an above-normal monsoon, spatial and temporal distribution will matter.

On the growth beyond FY25, he said there is a possibility of India growing between 6.5-7 percent because the key difference this decade compared to the last is the one of balance sheet strength in the financial sector and the non-financial sector in the corporate sector as well. The investment made in supply-side augmentation of both physical and digital infrastructure has placed the economy to pursue non-inflationary growth, he said, adding that this also helps absorb the challenge of overheating. He also expressed hope that there would be no nasty upside to inflation at the moment and it may moderate further to the median range of 4 percent in the coming months.

The CNX Nifty is currently trading at 22246.45, down by 56.05 points or 0.25% after trading in a range of 22221.00 and 22307.75. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 5.81%, Mahindra & Mahindra up by 2.91%, Bajaj Auto up by 2.54%, Eicher Motors up by 1.85% and Tata Motors up by 1.42%. On the flip side, Larsen & Toubro down by 3.78%, Divi's Lab down by 1.33%, TCS down by 1.31%, BPCL down by 1.26% and Tech Mahindra down by 1.24% were the top losers.

Asian markets are trading mixed; Hang Seng jumped 217.55 points or 1.19% to 18,531.41, Nikkei 225 surged 150.36 points or 0.39% to 38,352.73, Shanghai Composite strengthened 28.48 points or 0.9% to 3,156.96 and Straits Times rose 0.26 points or 0.01% to 3,264.79. On the other hand, Taiwan Weighted fell 31.5 points or 0.15% to 20,669.01 and KOSPI was down by 23.07 points or 0.84% to 2,721.98.
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