The rally on the final two sessions of the week helped markets to eke out slender gains. Indian equity benchmarks made a quiet start to the week as traders seemed reluctant to make significant moves and look ahead to the U.S. central bank’s monetary policy meeting.
The next day markets witnessed a steep fall amid a private report stating that India is unlikely to achieve the 8%-10% economic growth rates that China pulled off over the long term. It said economic progress in India is being hamstrung by a lack of infrastructure and a low-skilled workforce.
Sentiments remained under pressure, even as data showed that India’s outward FDI commitments rose substantially to $3.47 billion in February 2024, compared to over $2.82 billion in February 2023. Sequentially, FDI commitments were also up from $2.18 billion in January 2024.
Traders overlooked reports that the Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh revealed that the Government of India’s plans to introduce a dedicated policy aimed at fostering deep-tech startups.
Key gauges witnessed consolidation near week’s low points as some support came with the Central Board of Direct Taxes (CBDT) stating that the provisional figures of net direct tax collections registered a growth of 19.88 per cent to Rs 18,90,259 crore for the financial year 2023-24 (as of March 17, 2024) as compared to Rs 15,76,776 crore in the corresponding period of the previous financial year (FY 2022–23), on higher advance tax mop-up.
But, buying on the final two days of the week mainly helped markets to end above neutral lines as traders took support with CareEdge Ratings’ report that India’s economic activity likely hit a nine-month high in February, despite rural demand remaining weak and unemployment rising, thanks to a sharp expansion in exports, imports, and corporate bond issuances.
Traders took note of India’s executive director at International Monetary Fund (IMF) Krishnamurthy Venkata Subramanian’s statement that India needs to grow at 8 per cent on a sustained basis to create sufficient jobs to reduce poverty and inequality. Traders took encouragement with a report showing that India’s business activity ended this fiscal year on a high note, expanding at the fastest rate in eight months in March.
According to the report, the headline HSBC Flash India Composite PMI Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors — rose to 61.3 in March.
Moreover, rising from 60.6 in February, the latest figure indicated a sharp rate of expansion that was the strongest since July 2023. Sentiments were positive as a survey conducted by industry body FICCI and banking association Indian Banks’ Association (IBA) has shown that the health of the Indian banking sector continues to improve with better asset quality and high credit growth.
BSE movement for the week
The Bombay Stock Exchange (BSE) Sensex gained 188.51 points or 0.26% to 72,831.94 during the week ended March 22, 2024.
The BSE Midcap index gained 550.79 points or 1.44% to 38,801.23 and the small-cap index surged 758.52 points or 1.81% to 42,771.27.
On the sectoral front, S&P BSE Realty was up by 345.74 points or 5.27% to 6,906.32, S&P BSE Metal was up by 1,303.68 points or 4.91% to 27,839.38, S&P BSE Auto was up by 1,930.16 points or 4.17% to 48,249.98, S&P BSE Capital Goods was up by 1,906.30 points or 3.35% to 58,726.35 were the top gainers.
S&P BSE Information Technology was down by 2,102.03 points or 5.54% to 35,824.73, S&P BSE TECK was down by 818.96 points or 4.81% to 16,207.21 and S&P BSE Fast Moving Consumer Goods was down by 91.81 points or 0.47% to 19,292.61 were the few losers on the BSE.
NSE movement for the week
The Nifty gained 73.40 points or 0.33% to 22,096.75.
On the National Stock Exchange (NSE), Bank Nifty was up by 269.65 points or 0.58% to 46,863.75, Nifty Mid Cap 100 was up 627.25 points or 1.34% to 47,312.85 and Nifty Next 50 was up 1130.10 points or 1.95% to 59,188.90, while Nifty IT was down by 2312.30 points or 6.17% to 35,188.40.
FII transactions during the week
Foreign Institutional Investors (FIIs) were net sellers in the equity segment in the week, with gross purchases of Rs 104,569.20 crore and gross sales of Rs 107,181.43 crore, leading to a net outflow of Rs 2,612.23 crore.
They also stood as net buyers in the debt segment with gross purchases of Rs 12,101.75 crore against gross sales of Rs 9,261.32 crore, resulting in a net inflow of Rs 2,840.43 crore.
In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 462.32 crore and gross sales of Rs 459.89 crore, leading to a net inflow of Rs 2.43 crore.
Outlook for the coming week
Indian markets ended the passing week in green amid optimistic India’s HSBC Flash India Composite PMI Output Index data. HSBC Flash India Composite PMI Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors — rose to 61.3 in March.
In the coming holiday truncated week, Indian markets will remain close on March 25 and March 29 on account of Holi and Good Friday respectively. The upcoming week is likely to remain volatile as the march F&O series will expire on March 28 and traders will be adjusting their positions ahead of the new series.
On the economy data front, investors will be eyeing Current Account and External Debt data to be out on March 28. Government Budget Value, Foreign Exchange Reserves and Infrastructure Output data are going to be released during the week.
On the global front, investors will be eyeing macro-economic reports from the world’s largest economy, the United States, starting with Chicago Fed National Activity Index, Dallas Fed Manufacturing Index, Building Permits Final on March 25, Redbook, CB Consumer Confidence, Richmond Fed Manufacturing Index, Dallas Fed Services Index on March 26.
Initial Jobless Claims, Chicago PMI, Michigan Consumer Sentiment Final, Kansas Fed Composite Index, Baker Hughes Oil Rig Count on March 28, Core PCE Price Index, Personal Income, Personal Spending, Goods Trade Balance on March 29.