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WEEKLY MARKET REVIEW
The Nifty-50 Index and Sensex gained around 1.7% each in the past week, surging to fresh all-time highs. This week, BSE Sensex hit a new high of 82,637.03 and ended 1.57 percent or 1279.56 points higher at 82,365.77. The Nifty50 index also touched a new high of 25,268.35 and closed 412.75 points or 1.66 percent higher at 25,235.9.
During the week, the BSE Midcap index, BSE Largecap index, and BSE Smallcap index added 1.5 percent, 1.3 percent, and 0.6 percent, respectively.
The broader indices reached new record highs in the week, fueled by positive global sentiment following the latest Jackson Hole meeting, where the outcome suggested a potential rate cut by the Federal Reserve in the upcoming September meeting.
Foreign institutional investors (FIIs) sold equities worth Rs 19,139.76 crore, however, Domestic Institutional Investors (DII) bought equities worth Rs 20,871.10 crore.
ECONOMY
Investment demand jumps 7.5% in Q1FY25
India’s gross fixed capital formation (GFCF) at constant prices, which is taken as a proxy for investment demand in the economy, rose to 7.5 percent in Q1FY25 (April-June) as compared to the previous quarter.
The share of private investment in GDP rose marginally to 34.8 percent in April-March 2024-25 as compared to 34.6 percent in the corresponding quarter in the previous fiscal, at constant prices.
“The gross fixed capital formation at 34.8% of GDP for Q1 FY 2024-25 is indicating steady capacity expansion for more employment opportunities in the coming times,” Sanjeev Agrawal, President, PHD Chamber of Commerce and Industry, said.
Fiscal deficit at 17.2% of FY25 estimate as of July
The fiscal deficit narrowed to 17.2 percent of the full-year estimate in the first four months of the year, compared with 33.9 percent during a similar period in the previous year, as spending remained contained due to elections, government data released on August 30 showed.
The fiscal deficit was Rs 1.61 lakh crore for the first four months of the year. RBI had transferred a more-than-expected surplus dividend of Rs 2.11 lakh crore this year.
“GoI’s fiscal deficit more than halved in April-July FY25… led by a contraction in capital expenditure during the election months, as well as the substantial dividend received from the RBI,” said Aditi Nayar, chief economist, Icra.
GLOBAL MARKETS
Wall Street ends sharply higher as Powell cements September rate cut hopes
US stocks rallied on Friday as dovish remarks from U.S. Federal Reserve Chair Jerome Powell solidified expectations that the central bank will cut its key policy rate in September.
In highly anticipated comments before the Jackson Hole Economic Symposium, Powell said “the time has come” to lower the Fed funds target rate, and “the upside risks of inflation have diminished.”
The Dow Jones Industrial Average rose 462.3 points, or 1.14%, to 41,175.08, the S&P 500 gained 63.97 points, or 1.15%, to 5,634.61 and the Nasdaq Composite added 258.44 points, or 1.47%, to 17,877.79.
Asian stocks rise as investors count down to interest rate cuts
Asian stocks advanced and the yen strengthened early Monday as investors took positions in anticipation of the Federal Reserve cutting US interest rates from next month.
The prospect of the US finally easing borrowing costs is shaping trading across financial markets. The yield on 10-year US Treasuries declined two basis points to 3.79% during Asian trading.
STOCKS IN NEWS
Sugar stocks: Sugar stocks were in for a sweet surprise on Dalal Street on August 30, thanks to a new government policy allowing sugar mills to produce ethanol from cane juice or syrup for the upcoming Ethanol Supply Year (ESY) 2024-25. Nearly all sugar companies saw their shares rise, with Dalmia Bharat Sugar, Shree Renuka Sugar, Triveni Engineering, and Bajaj Hindusthan climbing up to 16 percent.
Hindustan Aeronautics Limited (HAL): The company with SAFHAL Helicopter Engines Pvt Ltd. has signed an airframer contract to commence joint design, development, manufacture, supply, and support of a new generation high-power engine named ‘Aravalli’.
Life Insurance Corporation of India(LIC): has received a notice for GST demand, interest & penalty order worth Rs 605.58 crore, from the Deputy Commissioner of State Tax, Mumbai. According to an exchange filing by LIC, the demand order for FY20 is split into GST of Rs 2,94,43,47,220; interest of Rs 2,81,70,71,780, and penalty of Rs 29,44,73,582.
Reliance Retail: Reliance Retail will enter the luxury jewelry segment with a curated design-led experience, Isha Ambani, Non-Executive Director and head of Reliance Retail said during Reliance Industries’ 47th annual general meeting (AGM) on August 29. With this move, Reliance Retail will compete with new-age companies like Tata’s CaratLane and other legacy brands. To be sure, the company already operates Reliance Jewels but that is targeted at the mass market.
Infosys: The company announced the expansion of its collaboration with Nvidia for AI-powered, customer-centric solutions to drive innovation and operational excellence for telcos. This collaboration will help telcos enhance their customer experiences, streamline network operations, and accelerate service delivery,” said the IT services firm in a stock exchange filing.