Buying, which emerged in the last session of the week, helped markets to end at all-time high levels, with frontline gauges surpassing their crucial 81,300 (Sensex) and 24,800 (Nifty) marks.
Key gauges made a pessimistic start to the week as disappointing earnings from Reliance Industries and Wipro weighed down sentiments.
Traders also remained cautious after the Economic Survey indicated that the rising Geopolitical uncertainties will likely exert a bigger influence on capital flows. Market participants shrugged off report that India’s forex reserves jumped by $9.69 billion to hit an all-time high of $666.85 billion as of July 12.
Traders got cautious with the Global Trade Research Initiative (GTRI) stating that increasing foreign direct investment (FDI) from China in the domestic market may benefit in the short-term, but it risks undermining India’s long-term economic security and strategic autonomy.
Markets extended losses as traders jeered the Finance Minister’s budget proposal where the government raised taxes on derivatives trades and on capital gains from equity investments. FM Nirmala Sitharaman announced the Long-Term Capital Gains taxes will be hiked from 10 to 12.5% and Short-Term Capital Gains taxes on some assets from 15 to 20%. Moreover, the securities transaction tax (STT) on futures and options will be increased to 0.02% and 0.1% respectively.
Selloff continued post-budget day with an analyst at Moody’s Ratings stating that India’s fiscal deficit glide path set out for 2025-26 is reasonable, but a coalition government at the Centre may pose challenges to pass bigger reforms that the economy needs.
Selling continued on Dalal Street amid a private report stating that foreign investors sold nearly $1 billion worth of Indian equities in the two days since the government raised taxes on derivatives trades and on capital gains from equity investments in its annual budget.
Afterwards, markets witnessed consolidation as some solace came with Revenue Secretary Sanjay Malhotra’s statement that the direct tax slabs rejig announced in the Union Budget amounting to savings of Rs 17,500 for the middle class along with an increase in the rebate limit to Rs 7 lakh in the new tax regime last year is ‘sufficient’ relief over a period of two years.
Some support also came with a report that global credit rating agencies have given thumbs up to the FY25 Budget, lauding the government’s firm commitment to deficit reduction, with Moody’s Ratings noting that the Budget is credit positive.
But the rally on the final day of trade not only helped markets to wipe out all the weekly losses but also to take markets to their all-time high levels as traders went for value buying. Sentiments also turned upbeat as signs of cooling inflation in the world’s largest economy, the US, boosted hopes for Fed rate cuts.
BSE movement for the week
The Bombay Stock Exchange (BSE) Sensex surged 728.07 points or 0.90% to 81,332.72 during the week ended July 26, 2024.
The BSE Midcap index gained 1446.64 points or 3.13% to 47,706.67 and Small Cap index surged 1812.55 points or 3.45% to 54,294.35.
On the sectoral front, S&P BSE Power was up by 426.31 points or 5.53% to 8,136.00, S&P BSE Healthcare was up by 2,020.69 points or 5.30% to 40,176.85, S&P BSE Auto was up by 2,734.21 points or 4.84% to 59,234.54, S&P BSE Consumer Durables was up by 2,701.49 points or 4.70% to 60,202.03 and S&P BSE Consumer Discretionary Goods & Services was up by 387.71 points or 3.93% to 10,255.68 were the top gainers.
S&P BSE BANKEX was down by 1,528.33 points or 2.54% to 58,638.77, S&P BSE Realty was down by 144.67 points or 1.69% to 8,413.34 and S&P BSE Finance was down by 67.45 points or 0.59% to 11,388.38 were the few losers on the BSE.
NSE movement for the week
The Nifty surged 303.95 points or 1.24% to 24,834.85.
On the National Stock Exchange (NSE), Nifty Mid Cap 100 increased 1859.80 points or 3.33% to 57,768.10, Nifty Next 50 gained 2047.65 points or 2.87% to 73,400.65 and Nifty IT was up by 1054.05 points or 2.64% to 40,977.35, while Bank Nifty was down by 969.65 points or 1.86% to 51,295.95.
FII transactions during the week
Foreign Institutional Investors (FIIs) were net buyers in the equity segment in the week, with gross purchases of Rs 70,257.66 crore and gross sales of Rs 65,143.72 crore, leading to a net inflow of Rs 5,113.94 crore.
They also stood as net buyers in the debt segment with gross purchases of Rs 9,762.43 crore against gross sales of Rs 5,487.37 crore, resulting in a net inflow of Rs 4,275.06 crore.
In the hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 85.19 crore and gross sales of Rs 72.73 crore, leading to a net inflow of Rs 12.46 crore.
Outlook for the coming week
Markets showed a positive trend for yet another week as Finance Minister Nirmala Sitharaman announced changes to the new income tax regime in her Union Budget 2024 speech.
The coming week marks the start of a new month and auto stocks would be buzzing on reporting monthly sales figures. Marketmen will be eyeing macro data starting with Government Budget Value scheduled to be release on July 31. On the same day, Infrastructure output data is also going to be out.
Market participants will be watching out for the HSBC Manufacturing PMI Final scheduled to be released on August 01. Foreign Exchange Reserves data is scheduled to be released on August 02.
In the ongoing earning season, market-participants would be majorly looking for earnings from companies like ACC, Colgate-Palmolive (India), Hindustan Petroleum Corporation, Jindal Saw, Dixon Technologies, Gail (India), Indian Oil Corporation, Tata Consumer Products, Adani Power, Ambuja Cements, Bharat Heavy Electricals, Coal India, Tata Motors, Zomato, Titan Company, Bank of India, Divi’s Laboratories, State Bank of India etc.
On the global front, in the US markets, traders will first be eyeing few economic data from world’s largest economy, starting with Dallas Fed Manufacturing Index on July 29 followed by Redbook, CB Consumer Confidence, Dallas Fed Services Index on July 30, Chicago PMI, Fed Interest Rate Decision on July 31.
Fed Press Conference, Initial Jobless Claims, S&P Global Manufacturing PMI Final, ISM Manufacturing PMI, ISM Manufacturing Employment on August 01, Non-Farm Payrolls, Unemployment Rate, Government Payrolls, Manufacturing Payrolls, Baker Hughes Oil Rig Count on August 02.