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EQUITY
Post Session: Quick Review
May-30-2023

Indian equity benchmarks ended a volatile session on positive note on Tuesday, with Sensex and Nifty closing around 0.20% higher each respectively, ahead of US lawmakers' key vote on lifting the debt limit due to take place on Wednesday. After a cautious start of the trading session, volatility witnessed over the Dalal Street, as concerns came with the Department for Promotion of Industry and Internal Trade (DPIIT) data showing that foreign direct investment (FDI) into India declined by 22 per cent to $46 billion in 2022-23, dragged by lower inflows in computer hardware and software, and automobile industry. The FDI inflows stood at $58.77 billion during 2021-22. 

Despite volatility, indices managed to trade in green for the most part of the session and ended near day’s high points. Traders got encouragement as the Reserve Bank of India in its annual report said that on the back of sound macroeconomic policies and softer commodity prices, India's growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures. RBI said that inflation trajectory expected to move down to 5.2 per cent this fiscal from the average level of 6.7 per cent recorded last year. Besides, it said that CAD expected to remain moderate on back of robust services exports, salubrious impact of moderation in commodity prices of imports.

Traders took encouragement as the National Sample Survey Office (NSSO) showed that the unemployment rate for persons aged 15 years and above in urban areas declined to 6.8 per cent during January-March 2023 from 8.2 per cent a year ago. On the sectoral front, energy producing company’s stocks were in watch, as in a big boost to off-shore wind energy projects, the Government given complete waiver of ISTS charges for 25 years to projects commissioned on or before December 31, 2032. Besides, the ISTS waiver of Green Hydrogen and Green Ammonia projects extended from June 30, 2025 to December 31, 2030.

On the global front, European markets were trading mostly in red, even after the Swiss economy rebounded at a faster-than-expected pace at the start of the year on robust domestic demand. The State Secretariat for Economic Affairs, or SECO, reported that gross domestic product grew 0.3 percent sequentially in the first quarter after stagnating in the fourth quarter of 2022. Asian markets settled mixed, after Hong Kong's exports continued to decline in April, and at a faster pace. The data from the Census and Statistics Department showed that exports of goods plunged 13.0 percent year-over-year in April, much faster than the 1.5 percent decline in March. Exports have been falling since May 2002.

The BSE Sensex ended at 62969.13, up by 122.75 points or 0.20% after trading in a range of 62737.40 and 63036.12. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.16%, while Small cap index was up by 0.22%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 0.36%, IT up by 0.24%, TECK up by 0.19%, FMCG up by 0.13% and Capital Goods up by 0.12%, while Metal down by 1.32%, Oil & Gas down by 0.33%, Telecom down by 0.31%, Consumer Durables down by 0.28% and Energy down by 0.24% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Finserv up by 1.13%, Kotak Mahindra Bank up by 1.07%, Bajaj Finance up by 1.01%, Axis Bank up by 0.88% and HCL Tech up by 0.74%. On the flip side, Tata Steel down by 1.29%, Tech Mahindra down by 1.24%, Sun Pharma down by 0.76%, Nestle down by 0.70% and Larsen & Toubro down by 0.49% were the top losers. (Provisional)

Meanwhile, Crisil Ratings in its latest report has said that it expects the net debt-to-EBITDA ratio of domestic steel manufacturers to stay below the level of 2 times in the financial year 2023-24 (FY24). It stated the steel makers had reported the ratio of net debt to EBITDA in the range of 1.6-1.7 times in preceding financial year 2022-23.

It mentioned that with the leverage much lower than the average of 3.5 times, seen during past five fiscals, the median credit quality of the sector is unlikely to be affected as balance sheets of the players will remain healthy. Further, it added project risks are expected to be low due to the brownfield nature of bulk of the capacity addition.

Besides, it said healthy demand growth, coupled with high operating rates, is driving the need to add capacity by the players. After a strong recovery seen in fiscal 2022 and 2023, with growth of 11.5 per cent and 13.3 per cent, respectively, domestic steel demand is expected to continue to grow at a healthy clip of over 7-9 per cent this fiscal. This will be driven by government push to the infrastructure and construction sectors, which have 70 per cent share in steel consumption. 

Moreover, it said global demand is also expected to recover, though marginally (1-2 per cent), from the lows of last fiscal, which was acutely impacted by war. This should support a recovery in exports, which is expected to add 1-2 per cent in incremental volume growth for players.

The CNX Nifty ended at 18633.85, up by 35.20 points or 0.19% after trading in a range of 18575.50 and 18662.45. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finserv up by 1.12%, Kotak Mahindra Bank up by 1.10%, Bajaj Finance up by 1.06%, HDFC Life Insurance up by 1.05% and HCL Tech up by 0.86%. On the flip side, Hindalco down by 1.62%, Adani Enterprises down by 1.48%, Tech Mahindra down by 1.40%, Tata Steel down by 1.29% and Sun Pharma down by 0.91% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 25.14 points or 0.33% to 7,602.06, France’s CAC fell 12.44 points or 0.17% to 7,291.37, while Germany’s DAX gained 102.12 points or 0.64% to 16,054.85.

Asian markets settled mixed on Tuesday ahead of the vote on the tentative US debt ceiling deal to avert a default, while concerns over rising tensions between the United States and China and uneven recovery in the world’s second largest economy also adding pressure on market sentiments. Meanwhile, Japanese shares rose amid US non-farm payroll data due later in the week. Chinese and Hong Kong shares gained marginally even with caution ahead of China's May manufacturing data.

Asian Indices          

Last Trade            

Change in Points   

Change in %     

Shanghai Composite

3,224.21

2.76

0.09

Hang Seng

18,595.78

44.67

0.24

Jakarta Composite

6,636.42

-44.68

-0.67

KLSE Composite

1,396.91

-8.02

-0.57

Nikkei 225

31,328.16

94.62

0.30

Straits Times

3,187.56

-7.66

-0.24

KOSPI Composite

2,585.52

26.71

1.03

Taiwan Weighted

16,622.74

-13.56

-0.08
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