In the week ended on Friday, 07 June 2024, the S&P BSE Sensex soared 2,732.05 points or 3.69% to settle at 76,693.36. The Nifty 50 index jumped 759.45 points or 3.37% to settle at 23,290.15. The BSE Mid-Cap index advanced 2.94% to close at 44,111.44. The BSE Small-Cap index rallied 3.11% to end at 48,731.55.

Weekly Index Movement:

Domestic stocks soared on Monday on exit poll euphoria. The S&P BSE Sensex galloped 2,507.47 points or 3.39% to 76,468.78. The Nifty 50 index soared 733.20 points or 3.25% to 23,263.90.

Key equity barometers crashed on Tuesday, as both the Nifty and the Sensex experienced their sharpest single-day decline since March 2020. The barometer index, the S&P BSE Sensex was tumbled 4,389.73 points or 5.74% to 72,079.05. The Nifty 50 index tanked 1,379.40 points or 5.93% to 21,884.50.

Domestic equity market staged a comeback on Wednesday, clawing back most of Tuesday's losses. The barometer index, the S&P BSE Sensex was soared 2,303.19 points or 3.20% to 74,382.24. The Nifty 50 index surged 735.85 points or 3.36% to 22,620.35.

Domestic stocks advanced for a second day on Thursday, buoyed by BJP-led NDA's re-election and global optimism. The barometer index, the S&P BSE Sensex gained 692.27 points or 0.93% to 75,074.51. The Nifty 50 index jumped 201.05 points or 0.89% to 22,821.40.

The Indian equity benchmarks ended with robust gains on Friday, rising for the third day in a row. The S&P BSE Sensex was surged 1,618.85 points or 2.16% to 76,693.36. The Nifty 50 index jumped 468.75 points or 2.05% to 23,290.15.

Lok Sabha Elections:

The Lok Sabha elections 2024 concluded with the Election Commission of India declaring all results. Prime Minister Narendra Modi is set to form the government for a third consecutive term. The BJP emerged as the largest party, winning 240 out of 543 seats, while the Congress secured 99 seats. The BJP-led National Democratic Alliance (NDA) won 293 seats, and the Opposition INDIA alliance obtained 232 seats. Despite significant losses in three Hindi heartland states, the NDA secured a majority in the Lok Sabha after a fiercely contested election.

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.

Economy:

India's manufacturing sector growth softened to a three-month low in May. The HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, dipped to 57.5 in May from April's 58.8, below a preliminary estimate of 58.4. However, the index remained above its long-run average and has been above the 50-mark separating contraction from expansion for almost three years.

India's GDP grew at 7.8% in Q4 of FY24, raising the full-year growth estimate to 8.2%, according to data released by the Ministry of Statistics and Programme Implementation (MOSPI) on Friday.

India's GST collections rose 10% YoY to Rs 1.73 lakh crore in May 2024, driven by a surge in domestic spending. This strong domestic performance points to a healthy economy, despite a 4.3% decline in imports.

Meanwhile, India's Index of Eight Core Industries (ICI) jumped 6.2% (provisional) in April 2024 compared to last year. This positive growth was driven by strong performances in electricity, natural gas, coal, steel, and other key sectors. This upswing follows a revised January growth of 4.1% and puts the year-to-date increase at an impressive 7.6% (provisional).

Further, India's forex reserves dipped $2.027 billion to $646.67 billion for the week ending May 24th, according to the RBI. All reserve components declined: foreign currency assets by $1.51 billion, gold by $482 million, and SDRs by $33 million.

The seasonally adjusted HSBC India Services Business Activity Index remained comfortably above the neutral mark of 50.0 in May, highlighting a sharp upturn in output. That said, the headline figure fell from 60.8 in April to 60.2, its lowest mark since last December.

The HSBC India Composite Output Index slipped from 61.5 in April to 60.5 in May, highlighting the slowest rate of expansion since last December. There were softer increases in both factory production and services activity.

Stocks in Spotlight:

Adani Ports and Special Economic Zone slipped 4.09%. The company said that it has handled approximately 35.8 million metric tonnes (MMT) of cargo volumes in May 2024, which is almost flat on a year-over-year (YoY) basis.

Meanwhile, the company has received letter of intent (LoI) from Syama Prasad Mookerjee Port Authority, Kolkata (SMPK) for operation and maintenance of container terminal at Kolkata.

Wipro surged 10.67%. The IT major bagging $500-million contract from a leading US communication service provider. The company will provide managed Services for some products and industry specific solutions over a period of 5 years. Further, the IT giant received order by a leading US communication service provider for $500 million.

Tata Motors rallied 5.15%. The company said that its board has approved to set up a wholly-owned subsidiary namely TML Commercial Vehicles (TMLCVL).

Angel One jumped 5.08%. The company’s client base jumped 63.3% to 23.83 million in May 2024 as against 14.59 million recorded in May 2023. Subsequently, the company said that its wholly owned subsidiary, Angel One Wealth has incorporated a wholly owned subsidiary, namely, Angel One Investment Services, on 30 May 2024.

Zee Entertainment Enterprises advanced 5.24%. The board approves fundraising up to Rs 2000 crore. This will fuel growth in the evolving media landscape.

Global Markets:

Positive data emerged from China, a key driver for regional growth. The Caixin manufacturing Purchasing Managers' Index (PMI) for May came in at 51.7, indicating continued expansion in the sector. This suggests some resilience in the Chinese economy.

The U.S. manufacturing sector showed signs of slowing, with the ISM manufacturing index measuring 48.7 in May, sending Treasury yields and the dollar lower. A reading below 50 is an indication of a contraction.

According to the Bureau of Labor Statistics, US job openings decreased by 296,000, reaching 8.059 million on the last day of April. This marks the lowest level since February 2021 and signifies a decrease in labor market tightness.

The US Labor Department said job openings fell to 8.059 million in April, the lowest since 2021, from a downwardly revised 8.355 million in March.