Rising for the fifth straight session, Indian equity benchmarks ended with gains of over half percent on Thursday led by buying in PSU, Metal and Healthcare stocks. Markets made a negative start and traded volatile during first half as traders remained cautious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 2,511.74 crore on April 24, 2024. Caution on eve of the expiry of April series derivative contracts also weighed on the sentiments. Some concern also came as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report stated that the demand for industrial credit from corporates with capex plans is expected to remain muted, due to strong cash flows, modular nature of investments and flexibility to tap equity markets. However, in late afternoon session, markets staged a smart recovery from early morning lows and concluded the session near its day's peak, as traders found support with a private report that merger and acquisition (M&A) deal value soared by 60 per cent to $19.6 billion in January-March 2024. Sentiments remained positive with the Comprehensive Economic Partnership Agreement (CEPA) Council Director Ahmed Aljneibi’s statement that the trade between India and UAE increased 15 per cent since the implementation of the free trade agreement in May 2022 and the both are on track to surpass the target of $100 billion in non-oil trade by 2030. Adding to the optimism, RBI Monetary Policy Committee (MPC) member Ashima Goyal said the problem of high food inflation will be less severe in India going ahead, as modern supply chains with diversified sources can help quickly address sudden spikes in prices of specific food items. Finally, the BSE Sensex rose 486.50 points or 0.66% to 74,339.44 and the CNX Nifty was up by 167.95 points or 0.75% points to 22,570.35.

The US markets ended lower on Thursday after a report released by the Commerce Department on Thursday showed the U.S. economy grew by much less than expected in the first quarter of 2024. The Commerce Department said gross domestic product increased by 1.6 percent in the first quarter after surging by 3.4 percent in the fourth quarter of 2023. Street had expected GDP to jump by 2.5 percent. The GDP growth in the first quarter reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending. The Commerce Department said the notable slowdown in GDP growth compared to the previous quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending. The report showed consumer spending growth slowed to 2.5 percent in the first quarter from 3.3 percent in the fourth quarter, with an increase in spending services partly offset by a decrease in spending on goods. On the sectoral front, despite the recovery attempt by the broader markets, telecom stocks continued to see substantial weakness on the day, with the NYSE Arca North American Telecom Index plunging by 2.7 percent. Significant weakness also remained visible among software stocks, as reflected by the 1.8 percent loss posted by the Dow Jones U.S. Software Index. Biotechnology, banking stocks and networking stocks also continued to see considerable weakness, although selling pressure waned from earlier in the session.

Crude oil futures ended higher on Thursday despite data showing slower than expected U.S. first-quarter GDP growth. The Commerce Department said gross domestic product increased by 1.6% in the first quarter after surging by 3.4% in the fourth quarter of 2023. Street had expected GDP to jump by 2.5%. Meanwhile, on the geopolitical front, Israel is reportedly launching airstrikes on Rafah as the country makes preparations to invade the city, despite warnings from allies that such an operation would compound the humanitarian crisis in Gaza. Benchmark crude oil futures for June delivery rose $0.76 or 0.92% to settle at $83.57 a barrel on the New York Mercantile Exchange. Brent crude for June delivery surged $0.99 or 1.12% to $89.01 per barrel on London's Intercontinental Exchange.

Indian rupee ended higher on Thursday with the support from positive domestic equities. Traders took note of report that RBI Monetary Policy Committee (MPC) member Ashima Goyal said the problem of high food inflation will be less severe in India going ahead, as modern supply chains with diversified sources can help quickly address sudden spikes in prices of specific food items. On the global front, yen hit a fresh 34-year low versus the dollar and a 16-year low against the euro on Thursday as investors expect a Bank of Japan policy meeting that ends on Friday to not be hawkish enough to support the Japanese currency. Finally, the rupee ended at 83.32 (Provisional), stronger by 1 paisa from its previous close of 83.33 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 17197.50 crore against gross selling of Rs 12970.31 crore, while in the debt segment, the gross purchase was of Rs 848.76 crore with gross sales of Rs 4048.49 crore. Besides, in the hybrid segment, the gross buying was of Rs 31.88 crore against gross selling of Rs 20.15 crore.

The US markets ended lower on Thursday on lower than expected GDP data for the first quarter that came in with a growth of 1.6 per cent versus an estimated growth of 2.4 per cent by street. Asian markets are trading mostly in green on Friday as investors look to the Bank of Japan’s policy decision and inflation figures out of Tokyo. Indian markets snubbed weak cues from global peers, and staged a smart recovery in Thursday's trading session to end on firm note, led by aggressive buying in band stocks, mainly PSUs. Today, markets are likely to get flat-to-positive start tracking gains in Asian counterparts. Sentiments will get a boost as the department of economic affairs in its monthly economic review for March said that further easing of food prices is on the anvil as IMD has predicted above-normal rainfall during the monsoon season, which is likely to lead to higher production, assuming good spatial and temporal distribution of the rainfall. The report added that India's economic performance has remained robust despite global challenges and geopolitical concerns. Some support will come as Engineering Export Promotion Council (EEPC) said that India's engineering goods including steel and machinery exports rose 10.7% year-on-year in March to $11.28 billion, growing in double digits for the second straight month, despite ongoing supply issues caused by disruption to shipping through the Red Sea. Engineering goods, which account for one-fourth of merchandise exports, rose 2.13% in the 2023/24 financial year, to $109.3 billion from a year earlier. Meanwhile, a private report stated that India is in talks with several countries seeking partnerships for technical help on lithium processing, to bolster its nascent lithium mining and electric vehicle industries and avoid relying on China. However, upside may remain limited amid foreign fund outflows. Foreign institutional investors (FIIs) net sold Rs 2,823.33 crore shares on April 25, provisional data from the NSE showed. There will be some reaction in real estate industry stocks with a private report that consumers sentiments in India's housing market remain positive despite a rise in prices. On the earnings front, Bajaj Finserv, Bajaj Holdings, Force Motors, HCL Technologies, Indiabulls RealEstate, Mahindra Lifespace, Maruti, Mahindra Holidays & Resort, Motilal Oswal Financial Services, SBI Card, SBI Life, Shakti Pumps and Usha Martin are among the prominent companies scheduled to announce Q4 results later in the day.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Axis Bank has reported consolidated net profit of Rs 7,613.55 crore for Q4FY24 as against net loss of Rs 5,371.18 crore for the same quarter in the previous year.
• Reliance Industries has acquired 100% equity stake of MSKVY Nineteenth Solar SPV and MSKVY Twenty-second Solar SPV from MSEB Solar Agro Power, for consideration of Rs 1 crore.
• Dr. Reddy’s Laboratories and Nestle India have entered into a definitive agreement to form a JV Company to bring innovative nutraceutical brands to consumers in India and other agreed territories.
• The RBI has directed Kotak Mahindra Bank to cease and desist, with immediate effect, from onboarding of new customers through its online and mobile banking channels and issuing fresh credit cards.