Extending a winning streak for the sixth straight week, Indian equity benchmarks ended the volatile week of trade on a fresh record closing high levels with frontline gauges settling above their crucial 24,500 (Nifty) and 80,500 (Sensex) levels, supported by a rally in information technology (IT) stocks after TCS reported better-than-expected Q1FY25 numbers, hinting at a possible demand revival.
Domestic indices made a muted start to the week as the Reserve Bank of India (RBI) said India’s forex reserves dropped $1.713 billion to $651.997 billion for the week ended June 28.
Some cautiousness also came with a private report stating that India will struggle to create enough jobs for its growing workforce over the next decade even if the economy grows at a rapid pace of 7 per cent, and it suggested the world’s most populous nation will need more concerted steps to boost employment and skills.
Markets got momentum on the very next day taking support from rating agency Crisil’s report that securitization volume rose to Rs 45,000 crore in the first quarter of the current fiscal (Q1FY25), marking a around 17% on-year, like-to-like growth (adjusted for the exit of a large HFC and regulatory measures on gold loan securitization).
Traders also took encouragement with the RBI’s KLEMS database showing that the total number of employed people as a ratio of the total population has increased to 44.2 per cent in FY24 from 34.7 per cent in FY18, with the workforce growing by 168 million during the period at 643.3 million.
Traders shrugged off Moody’s report in which it kept India’s 2024 growth forecast unchanged at 6.8 percent from its March forecast. The rating firm predicted the Indian economy to grow by 6.4 percent in 2025.
Some concern also came as RBI’s Deputy Governor M Rajeshwar Rao has flagged concerns over the quality of disclosures made by some NBFCs and urged the auditing community to ensure that entities provide appropriate qualitative information to depositors as well as other stakeholders.
Buying on the final day of the week mainly helped markets to end the week in green and settle above their record closing high levels as TCS’ Q1FY25 numbers beat the street’s expectation, resulting rally in software counters. Sentiments also remained upbeat after the International Monetary Fund (IMF) reiterated that it expects the Federal Reserve to begin cutting interest rates later this year.
BSE movement for the week
The Bombay Stock Exchange (BSE) Sensex surged 522.74 points or 0.65% to 80,519.34 during the week ended July 12, 2024.
The BSE Midcap index gained 70.41 points or 0.15% to 47,508.26, while Smallcap index slipped 140.71 points or 0.26% to 54,013.25.
On the sectoral front, S&P BSE Information Technology was up by 1,345.58 points or 3.50% to 39,828.91, S&P BSE Fast Moving Consumer Goods was up by 699.82 points or 3.34% to 21,626.60, S&P BSE Oil & Gas was up by 863.05 points or 2.86% to 31,015.34, S&P BSE TECK was up by 467.32 points or 2.64% to 18,148.52 and S&P BSE PSU was up by 421.82 points or 1.91% to 22,462.60 were the top gainers.
S&P BSE Realty was down by 203.74 points or 2.33% to 8,536.92, S&P BSE Metal was down by 751.12 points or 2.23% to 32,988.24, S&P BSE Auto was down by 644.04 points or 1.11% to 57,182.12, S&P BSE Power was down by 60.65 points or 0.75% to 8,034.58 and S&P BSE BANKEX was down by 191.79 points or 0.32% to 60,140.44 were the top losers on the BSE.
NSE movement for the week
The Nifty gained 178.30 points or 0.73% to 24,502.15.
On the National Stock Exchange (NSE), Nifty IT was up by 1302.25 points or 3.45% to 39,023.00, Nifty Next 50 was up 305.55 points or 0.42% to 73,732.10 and Nifty Mid Cap 100 increased 84.35 points or 0.15% to 57,173.80, while Bank Nifty was down by 381.45 points or 0.72% to 52,278.90.
FII transactions during the week
Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 80,042.81 crore and gross sales of Rs 72,652.64 crore, leading to a net inflow of Rs 7,390.17 crore.
They also stood as net buyers in the debt segment with gross purchases of Rs 6,841.14 crore against gross sales of Rs 4,661.07 crore, resulting in a net inflow of Rs 2,180.07 crore.
In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 188.97 crore and gross sales of Rs 103.07 crore, leading to a net inflow of Rs 85.90 crore.
Outlook for the coming week
In the passing week, Indian equity markets ended with gains of over half percent and scaled new high levels amid value buying.
On the economy front, traders will be eyeing the Wholesale Price Index (WPI) data which is scheduled to be released on July 15. On the same day, Import and exports data are also going to be out.
India’s merchandise trade deficit was at $23.8 billion in May of 2024, widening from the shortfall in the corresponding period of the previous year to mark the sharpest deficit since October 2023. Foreign Exchange Reserves data is scheduled to be released on July 19.
Traders will also be eyeing lots of important earnings announcements scheduled for the week, Angel One, HDFC Asset Management, HDFC Life Insurance, Bajaj Auto, Crisil, L&T Finance, Asian Paints, LTIMindtree, CEAT, Havells India, Infosys, L&T Technology Services, Mastek, Persistent Systems, Tata Communications, Tata Technologies, BPCL, ICICI Lombard General Insurance, JSW Steel, One 97 Communications, UltraTech Cement, Wipro, HDFC Bank, J K Cement, Kotak Mahindra Bank etc.
On the global front, investors would be eyeing few economic data from the world’s largest economy, United States (US), starting with NY Empire State Manufacturing Index on July 15, Retail Sales, Imports and Exports data, Redbook, Business Inventories, NAHB Housing Market Index on July 16.
Building Permits Prel, Industrial Production, Manufacturing Production on July 17, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Continuing Jobless Claims on July 18 and finally Baker Hughes Oil Rig Count on July 19.