Market Commentary     06-May-24
Mid-Session
Barometers trade with minor losses, realty shares rally
The domestic benchmarks traded in negative terrain with limited losses in mid-afternoon trade. The Nifty traded below the 22,450 mark after hitting the day's high of 22,588.80 in early trade. Realty shares advanced after declining in the past two trading sessions.

At 14:30 IST, the barometer index, the S&P BSE Sensex, was down 25.18 points or 0.04% to 73,848.78. The Nifty 50 index lost 46.15 points or 0.21% to 22,429.70.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index fell 1.10% and the S&P BSE Small-Cap index declined 1.04%.

The market breadth was weak. On the BSE, 1,206 shares rose and 2,690 shares fell. A total of 160 shares were unchanged.

Economy:

Despite falling from 61.2 at the end of the previous fiscal quarter to 60.8 in April, the seasonally adjusted HSBC India Services Business Activity Index highlighted one of the strongest growth rates seen in just under 14 years. Survey members attributed the latest upturn in output to favorable economic conditions, demand strength and rising intakes of new work.

Despite coming in below the Flash estimate (62.2), the final HSBC India Composite PMI Output Index still signaled a substantial rate of expansion across the private sector. At 61.5 in April (March: 61.8), the latest reading was one of the highest seen in close to 14 years.

As was the case for output, manufacturers continued to note a stronger increase in new business intakes than service providers. Aggregate sales rose sharply, and at one of the fastest rates since mid-2010. Goods producers also led April's rise in payroll numbers, with softer growth in the service economy curbing job creation at the composite level.

Meanwhile, in the third consecutive weekly decline, India’s forex reserves dropped $2.412 billion to $637.922 billion during the seven days ended April 26, according to the RBI data.

For the week ended April 26, the foreign currency assets — a major component of the reserves — decreased $1.159 billion to $559.701 billion, the data released on Friday showed.

Gold reserves decreased $1.275 billion to $55.533 billion during the week. The special drawing rights (SDRs) were up $15 million to $18.048 billion, said the RBI.

India’s reserve position with the IMF was also up $8 million to $4.639 billion in the reporting week, the apex bank data showed.

Buzzing Index:

The Nifty Realty index jumped 1.94% to 981.30. The index fell 1.08% in past two trading sessions.

Godrej Properties (up 10.13%), Brigade Enterprises (up 5.99%), Prestige Estates Projects (up 4.09%), Oberoi Realty (up 1.58%), Sobha (up 1.11%), Phoenix Mills (up 0.63%), Sunteck Realty (up 0.15%) and DLF (up 0.03%) advanced.

On the other hand, Macrotech Developers (down 3.72%) and Mahindra Lifespace Developers (down 2.96%), edged lower.

Numbers to Track:

The yield on India's 10-year benchmark federal paper shed 0.43% to 7.118 as compared with previous close 7.149.

In the foreign exchange market, the rupee is edged lower against the dollar. The partially convertible rupee was hovering at 83.4725, compared with its close of 83.4550 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement added 0.81% to Rs 71,703.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.02% to 105.05.

The United States 10-year bond yield fell 0.44% to 4.478.

In the commodities market, Brent crude for July 2024 settlement gained 80 cents or 0.96% to $ 83.76 a barrel.

Stocks in Spotlight:

Kansai Nerolac Paints shed 0.78%. The paint major reported 8% rise in standalone net profit to Rs 102 crore on a 4% increase in net revenue to Rs 1,662 crore in Q4 FY24 as compared with Q4 FY23.

Inox Wind slipped 1.50%. The wind energy service provider reported a consolidated net profit (from continuing operations) of Rs 37.67 crore in Q4 FY24 as against a net loss of Rs 115.51 crore posted in Q4 FY23. Revenue from operations stood at Rs 527.73 crore in Q4 FY24, steeply higher than Rs 190.75 crore recorded in the corresponding quarter previous year.

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