Key gauges ended the passing week with marginal gains as selling on the final day of the week ate most of the weekly gains after traders opted to book profit at record high levels amid the slow progress of the monsoon.

Domestic bourses started the holiday shortened week on an optimistic note as traders took encouragement with President of the Confederation of Indian Industry’s statement that within a few years, India will undoubtedly be among the world’s top three economies.

Some support also came as data from the Reserve Bank of India (RBI) showed India’s foreign exchange reserves jumped $4.307 billion to touch a new lifetime high of $655.817 billion during the week that ended June 7.

Sentiments also got boosted with the Central Board of Direct Taxes’ (CBDT) statement that net direct tax collection grew 21 per cent to Rs 4.62 lakh crore so far, this fiscal on higher advance tax mop-up. The first instalment of advance tax, which was due on June 15, showed collection rose 27.34 per cent to Rs 1.48 lakh crore.

Afterwards, local indices took some breather after Reserve Bank Governor Shaktikanta Das stated that India should avoid adventurism and continue to focus on bringing down inflation towards the target of 4% despite the growing clamour to signal a pivot in monetary policy. He stated ‘At this point, there is again clamour that one should change the stance.

Some concern came as the Ministry of Labor and employment stated that formal job creation under the Employees’ State Insurance Corporation (ESIC) fell by 7.8% to 1.64 million in April 2024 as against 1.78 million in the corresponding month last year.

However, markets showed gradual upside momentum and hit record highs on the very next day as traders found support with global rating agency Fitch Ratings’ statement that India will see higher Consumer spending with elevated consumer confidence.

The rating agency has elevated India’s growth forecast by 20 basis points to 7.2 per cent for fiscal year 2024-25. Earlier in March, Fitch forecasted India’s growth at 7 per cent.

Selling on the final day of the session mainly played spoil sports for Indian equity markets as traders booked profit at higher levels and overlooked the report that the headline HSBC Flash India Composite Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors – increased from 60.5 in May to 60.9 in June. 

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex gained 217.13 points or 0.28% to 77,209.90 during the week ended June 21, 2024.

The BSE Midcap index losses 91.69 points or 0.20% to 45,967.07, while Small cap index surged 736.54 points or 1.44% to 51,936.53.

On the sectoral front, S&P BSE BANKEX was up by 1,831.83 points or 3.22% to 58,696.60, S&P BSE Finance was up by 222.81 points or 2.02% to 11,276.31, S&P BSE Information Technology was up by 666.64 points or 1.88% to 36,172.71.

S&P BSE Auto was down by 1,595.34 points or 2.73% to 56,742.38, S&P BSE Oil & Gas was down by 747.97 points or 2.53% to 28,863.30, S&P BSE Capital Goods was down by 1,476.50 points or 2.02% to 71,779.22, S&P BSE Fast Moving Consumer Goods was down by 389.11 points or 1.88% to 20,325.88 and S&P BSE Healthcare was down by 531.55 points or 1.42% to 36,773.21 were the top losers on the BSE.

NSE movement for the week

The Nifty increased 35.50 points or 0.15% to 23,501.10.

On the National Stock Exchange (NSE), Bank Nifty was up by 1659.45 points or 3.32% to 51,661.45, Nifty IT was up by 601.75 points or 1.74% to 35,200.30 and Nifty Mid Cap 100 increased 203.20 points or 0.37% to 55,429.15 while Nifty Next 50 lost 780.35 points or 1.09% to 71,111.80.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 76,788.06 crore and gross sales of Rs 61,554.02 crore, leading to a net inflow of Rs 15,234.04 crore.

They also stood as net buyers in the debt segment with gross purchases of Rs 10,227.63 crore against gross sales of Rs 5,355.92 crore, resulting in a net inflow of Rs 4,871.71 crore.

In the hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 82.77 crore and gross sales of Rs 173.54 crore, leading to a net outflow of Rs 90.77 crore.

Outlook for the coming week

In the passing week, Indian benchmark indices ended higher with marginal gains amid foreign fund inflows and lack of triggers. The next week is likely to see some volatility with the scheduled F&O series expiry on June 27 as traders will be balancing their positions going ahead for the next series. 

On the economic data front, investors will be eyeing the Government Budget Value, External Debt, Current Account Deficit, and Infrastructure output, scheduled to be released on June 28. India reported a Rs 2.1 trillion budget deficit in April 2024, the first month of the 2024/25 fiscal year, compared to Rs 2.1 trillion a year earlier.

On the global front, investors would be eyeing few economic data from the world’s largest economy, the United States (US), starting with the Dallas Fed Manufacturing Index on June 24 followed by Chicago Fed National Activity Index, Redbook, CB Consumer Confidence, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, Dallas Fed Services Index on June 25.

New Home Sales, Building Permits Final on June 26, Durable Goods Orders, GDP Growth Rate, Initial Jobless Claims, Pending Home Sales on June 27, Fed Barkin Speech, Core PCE Price Index, Personal Income, Personal Spending, Chicago PMI, Michigan Consumer Sentiment, Michigan 5 Year Inflation Expectations, Baker Hughes Oil Rig Count on June 28.