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Benchmarks manage to end higher in volatile session on Thursday
May-02-2024

Indian equity benchmarks managed to end higher in the volatile session on Thursday led by gains in Utilities, PSU and Power stocks. Additionally, a decline in oil prices and robust domestic auto sales figures supported sentiments. After opening in red, frontline indices soon reversed losses to trade higher and consolidated during the day as traders took support with data showing that India's Goods and Services Tax (GST) collections in gross terms hit a record high in April 2024 at Rs 2.1 lakh crore. The government had collected Rs 1.87 lakh crore as GST in the same period last year. Traders took a note of a private survey showing that growth in India's manufacturing sector slowed marginally in April but remained robust thanks to strong demand, prompting firms to ramp up purchases of raw materials at a near-record pace. The HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, dipped to 58.8 in April from a 16-year high of 59.1 in March, below a preliminary estimate for no change from the previous month. Despite softening, it was above its long-run average and in expansionary territory for a 34th month. The 50-mark separates growth from contraction.

Sentiments remained positive in afternoon deals, taking support from data showing that the output of eight core industries posted a growth of 5.2 percent in March 2024 as the production of cement, coal, electricity, natural gas, steel and crude oil recorded positive growth in the same month. The output of core sectors had grown by 7.1 per cent in February 2024 and 4.1 per cent in January 2024, while it stood 4.2 per cent in March 2023. However, markets trimmed some gains in final hour of trade as traders got anxious as foreign portfolio investors (FPIs) have turned net sellers in Indian stocks in April, after remaining net buyers in the two preceding months, as the ongoing geopolitical crisis in the Middle East coupled with strength US bond yield likely pushed investors to take money off their portfolios. Some concern also came with report that the Reserve Bank of India will likely delay cutting interest rates until the final quarter of the year, as inflation risks rise and the US Federal Reserve keeps rates on hold for longer.

On the global front, European markets were trading mostly in red after the U.S. Federal Reserve signaled that it is poised to keep interest rates higher for longer. Sentiment was also dented after a survey showed the ongoing downturn in euro zone manufacturing activity deepened in April. HCOB's final euro zone manufacturing PMI, compiled by S&P Global, dropped to 45.7 in April from March's 46.1. Asian markets ended mixed on Thursday following the mixed cues from Wall Street, with the markets reacting to the US Fed's decision to hold interest rates steady, while also ruling out a rate hike in the near future.

Finally, the BSE Sensex rose 128.33 points or 0.17% to 74,611.11 and the CNX Nifty was up by 43.35 points or 0.19% points to 22,648.20.

The BSE Sensex touched high and low of 74,812.43 and 74,360.69 respectively. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.91%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Utilities up by 1.49%, PSU up by 1.49%, Power up by 1.47%, Oil & Gas up by 1.38% and Auto up by 1.17%, while Bankex down by 0.45%, Telecom down by 0.23%, TECK down by 0.22%, Consumer Durables down by 0.13% and Realty down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corp up by 3.91%, Asian Paints up by 3.36%, Tata Motors up by 1.99%, NTPC up by 1.72% and Tata Steel up by 1.45%. On the flip side, Kotak Mahindra Bank down by 2.95%, Axis Bank down by 1.41%, Bharti Airtel down by 1.26%, Wipro down by 1.09% and ICICI Bank down by 1.05% were the top losers.

Meanwhile, India's manufacturing sector growth eased slightly in the month of April but signaled the second-best improvement in the health of the sector for three-and-a-half years, supported by buoyant demand. Firms experienced a sharp upturn in new business intakes and scaled up production accordingly. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 58.8 in April as against 59.1 in March.

The survey report further noted that stocks of purchases, one of the five sub-components of the headline figure, increased sharply in April. The rate of expansion was the third-strongest seen since data collection started in early-2005, behind only those recorded last month and May 2023. April's rise in raw material stocks was supported by a further increase in buying levels.

Indian manufacturers witnessed robust demand for their goods in April, from domestic and external clients. Total new orders rose sharply, with the pace of expansion being the second-strongest since the start of 2021. Growth was spurred by healthy demand trends and successful marketing campaigns. Indian goods producers forecast higher output in the year ahead, relative to present levels.

Besides, to fulfil current and expected improvements in demand, manufacturers hired additional staff at the start of the first fiscal quarter. The pace of job creation was moderate, but nevertheless the quickest since September 2023. Meanwhile, pressure on operating capacities remained mild as evidenced by a slight uptick in outstanding business volumes.

The CNX Nifty traded in a range of 22,710.50 and 22,567.85. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.61%, Power Grid Corporation up by 3.71%, Asian Paints up by 3.20%, Tata Motors up by 2.07% and Bajaj Auto up by 2.05%. On the flip side, Kotak Mahindra Bank down by 2.83%, Tata Consumer Products down by 1.43%, Bharti Airtel down by 1.38%, Axis Bank down by 1.36% and HDFC Life Insurance down by 1.23% were the top losers.

European markets were trading mostly in red; France’s CAC fell 70.78 points or 0.89% to 7,914.15 and Germany’s DAX lost 11.46 points or 0.06% to 17,920.71, while UK’s FTSE 100 increased 22.42 points or 0.28% to 8,143.66.

Asian markets exhibited mixed trend on Thursday after the US Federal Reserve held interest rates unchanged and cited lack of progress on inflation to cut interest rates from a two-decade high. Moreover, mixed signals from Fed Chief Jerome Powell on the outlook for inflation and interest rates also kept sentiments mixed. The Japanese Nikkei lost marginally, while the yen slipped to the lower 155 range against the American currency after rising as high as 153 overnight on suspected intervention by Japanese authorities. The Kospi average ended down after official data showed South Korea's factory activity contracted again in April, but manufacturers' optimism climbed to the highest level in nearly two years. Chinese markets remained closed for the Labour Day holidays.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

--

--

--

Hang Seng

18,207.13

444.10

2.44

Jakarta Composite

7,117.42

-116.78

-1.64

KLSE Composite

1,580.30

4.33

0.27

Nikkei 225

38,236.07

-37.98

-0.10

Straits Times

3,296.89

4.20

0.13

KOSPI Composite

2,683.65

-8.41

-0.31

Taiwan Weighted

20,222.44

-174.16

-0.86
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