HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Markets end lower amid broad-based selling
May-07-2024

Indian equity benchmarks ended over half a percent lower on Tuesday amid selling pressure across sectoral indices and in the broader markets despite firm cues from global markets. Markets made a slightly positive start but soon erased gains to trade lower amid foreign fund outflows. Foreign Institutional Investors (FIIs) sold shares worth Rs 2,168.75 crore on May 6. Also, geopolitical tensions weighted on markets as Israel commenced its planned military offensive in Rafah hours after it rejected Hamas's proposal for a ceasefire in Gaza. Key gauges extended losses in late morning deals as traders remained anxious with a private report stating that beyond geopolitical situations, the growing global concern surrounding environmental issues and clean energy pose certain threats to Indian companies planning to invest abroad. 

Sentiments remained dampened in afternoon deals, even as India Ratings and Research revised upward the country's GDP growth estimate for FY25 to 7.1 per cent from 6.5 per cent earlier. The projection is marginally higher than the Reserve Bank's estimate of 7 per cent. The rating agency said strong support from the sustained government capex, deleveraged balance sheets of corporate and banking sector, and the incipient private corporate capex cycle make it revise its estimate. Meanwhile, Finance Minister Nirmala Sitharaman said that the government has adopted ‘a pro-poor approach’ while implementing Goods and Services Tax, and despite lower taxes rates the revenues as a percentage of GDP have reached the pre-GST level. She said without GST, states' revenue from subsumed taxes from FY 2018-19 to 2023-24 would have been Rs 37.5 lakh crore. With GST, states' actual revenue amounted to Rs 46.56 lakh crore. 

On the global front, European markets were trading higher as investors reacted to mostly positive regional economic data and encouraging bank earnings. Investors cheered data from the mortgage lender Halifax showing that house prices in the U.K. were steady in April after falling in March. Asian markets settled mostly higher on Tuesday following the broadly positive cues from global markets, on renewed optimism over the outlook for interest rates, with traders growing increasingly confident about a rate cut in the coming months and largely eliminating short-lived concerns the US Fed might actually consider raising rates.

Finally, the BSE Sensex fell 383.69 points or 0.52% to 73,511.85 and the CNX Nifty was down by 140.20 points or 0.62% points to 22,302.50.

The BSE Sensex touched high and low of 74,026.80 and 73,259.26 respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.90%, while Small cap index was down by 1.65%.

The few gaining sectoral indices on the BSE were FMCG up by 1.80%, IT up by 0.55% and TECK up by 0.44%, while Realty down by 3.41%, Utilities down by 2.85%, PSU down by 2.37%, Power down by 2.26% and Metal down by 2.26% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 5.51%, Tech Mahindra up by 2.37%, Nestle up by 2.06%, TCS up by 1.36% and ITC up by 1.33%. On the flip side, Power Grid Corporation down by 3.80%, Indusind Bank down by 3.05%, Tata Motors down by 2.72%, JSW Steel down by 2.41% and HCL Technologies down by 2.13% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, India Ratings and Research has revised upward the country’s Gross Domestic Product (GDP) growth estimate for FY25 to 7.1 per cent from 6.5 per cent earlier. In a statement, the domestic rating agency said strong support from the sustained government capex, deleveraged balance sheets of corporate and banking sector, and the incipient private corporate capex cycle make it revise its estimate. It said that factors that may constrain growth include consumption demand not being broad based and the headwinds faced by exports due to sluggish growth globally.

The agency said it expects the growth in private final consumption expenditure to jump to 7 per cent in FY25, up from 3 per cent in FY24, and added that this will be a three-year high. It noted current consumption demand is highly skewed, as it is driven by the goods and services largely consumed by the households belonging to the upper income bracket, and added that rural consumption is weak. Above normal monsoon, jump in wheat procurement by Food Corporation of India at 37 million tonnes versus 26 million tonnes in FY24 will help the consumption story.

It said ‘Sustained real wage growth of the households belonging to the lower income bracket is an imperative for a sustainable and broad-based recovery in consumption demand’. On the capex front, it said private sector activity has remained down for several years but added that a new cycle is in the offing as seen from the increase in the project loans sanctioned by lenders. It further said the headline inflation will moderate in FY25, but the Reserve Bank will remain vigilant.

The CNX Nifty traded in a range of 22,499.05 and 22,232.05. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 5.20%, Tech Mahindra up by 2.52%, Nestle up by 2.06%, Britannia Industries up by 2.05% and ITC up by 1.44%. On the flip side, Bajaj Auto down by 3.98%, Power Grid Corporation down by 3.65%, ONGC down by 3.07%, Indusind Bank down by 2.90% and Hindalco down by 2.86% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 83.21 points or 1.01% to 8,296.70, France’s CAC rose 26.84 points or 0.34% to 8,023.48 and Germany’s DAX gained 129.42 points or 0.71% to 18,304.63.

Asian markets settled mostly higher on Tuesday, tracking Wall Street gains overnight amid solid first-quarter earnings reports and looming expectations that the US Federal Reserve will start cutting interest rates later this year. South Korea's Kospi rose as trading resumed after a long holiday weekend. Japanese markets marking a three-week closing high as the yen continued to weaken in spite of warnings from authorities that they would act in the event of volatility. Data showed Japanese service sector activity grew at the fastest pace in eight months in April. Meanwhile, China recorded high tourism figures during the Labour Day holiday, beating pre-pandemic levels and contributing major growth to consumption.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,147.74

7.02

0.22

Hang Seng

18,479.37

-98.93

-0.54

Jakarta Composite

7,123.61

-12.28

-0.17

KLSE Composite

1,605.68

8.29

0.52

Nikkei 225

38,835.10

599.03

1.54

Straits Times

3,300.04

-3.15

-0.10

KOSPI Composite

2,734.36

57.73

2.11

Taiwan Weighted

20,653.53

130.22

0.6
  RELATED NEWS >>
Most Viewed >>
May 13 , 2024
Pvt sector capex likely to expand amid expecta
May 13 , 2024
Record additions of new SIPs give local funds
May 14 , 2024
Risk-off sentiment brings big selloff in FPI-h
May 14 , 2024
Sensex swings 1000 points; Jaishankar, Shah tr
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.