Market Commentary     07-Jun-24
Mid-Session
Market continues to trade higher; Wipro rallies over 4%; European mrkt decline
The key benchmark indices continued to trade in positive terrain with significant gains in afternoon trade. The Nifty traded above the 23,150 mark. All the sectoral indices on the NSE were traded in green.

At 13:25 IST, the barometer index, the S&P BSE Sensex was jumped 1,327.02points or 1.77% to 76,390.53. The Nifty 50 index gained 359 points or 1.57% to 23,180.40.

In the broader market, the S&P BSE Mid-Cap index added 0.67% and the S&P BSE Small-Cap index advanced 1.81%.

The market breadth was strong. On the BSE, 2,785 shares rose and 942 shares fell. A total of 144 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, dropped 0.29% to 16.75.

RBI Monetary Policy Outcome:

The Reserve Bank of India (RBI) monetary policy committee (MPC) has voted to keep the repo rate unchanged at 6.5%.

RBI's MPC at its meeting today, 7 June 2024, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The projected real GDP growth for 2024-25 has been revised upward to 7.2%. The quarterly breakdown is as follows: Q1 at 7.3%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%. This represents a slight improvement from the previous estimate, where the GDP growth was projected at 7%, with Q1 at 7.1%, Q2 at 6.9%, Q3 at 7%, and Q4 also at 7%. The risks associated with this projection are considered evenly balanced.

The projected CPI inflation for 2024-25 remains unchanged at 4.5%. The quarterly breakdown is as follows: Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%. This is consistent with the previous meeting's projection, where CPI inflation for the same period was also estimated at 4.5%, with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.

The minutes of the MPC’s meeting will be published on 21 June 2024. The next meeting of the MPC is scheduled during August 6 to 8, 2024.

Gainers & Losers:

Wipro (up 4.64%), Infosys (up 4.18%), Bajaj Finance (up 3.94%), Tata Steel (up 3.69%) and Ultratech Cement (up 3.25%) were major Nifty gainers.

SBI Life Insurance Company (down 1.42%), Tata Consumer Products (down 0.28%) and Bajaj Auto (down 0.23%) were major Nifty losers.

Wipro soared 4.64% after the IT giant received order by a leading US communication service provider for $500 million.

Stocks in Spotlight:

Hero MotoCorp rose 0.82%. The company said that its board has approved the purchase of additional 2.2% stake in Ather Energy, an associate company, from an existing shareholder for a total consideration of Rs 124 crore.

Mastek rallied 8.87% after the company’s cloud-native platform, icxPro platform partnered with NVIDIA AI Enterprise to boost CX (Customer Experience) management for different sectors.

Rail Vikas Nigam (RVNL) advanced 1.79% and NTPC rose 1.71% after the civil construction firm received letter of award (LoA) from National Thermal Power Corporation (NTPC) for Rs 495.14 crore.

Tata Chemicals fell 1.64% after the Chester Crown Court, United Kingdom (UK), ordered a fine of GBP 11,00,000 on Tata Chemicals Europe, company’s subsidiary in UK, for safety incident which occurred in 2016.

Global Markets:

European market declined while Asian stocks traded mixed on Friday as traders refrained from big bets until key economic data is released. Two important reports are on the docket:

The US nonfarm payrolls report, a crucial indicator of the health of the American economy, will be released later today. Investors are watching this data closely to gauge its impact on global markets.

Chinese trade data, also due later today, is being monitored by Asian markets. Concerns exist that excess capacity in China's manufacturing sector could lead to tariffs being imposed on Chinese exports by its trade partners.

In the US, the S&P 500 and Nasdaq closed slightly lower on Thursday, giving back some of their gains from the previous session's record highs. This came ahead of a key labor market report due Friday. Technology stocks, particularly Nvidia, led the decline.

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