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Extending gains for second day, Indian equity benchmarks ended higher by nearly a percent on Friday, on the back of buying in telecom, auto, utilities and power stocks amid firm trend in the global market. Key indices made positive start and stayed in green for whole day, as sentiments got a boost with a private report stating that the Indian economy can grow by 7-7.8 per cent this fiscal on the back of better agriculture production and a revitalised rural economy amid global headwinds mainly due to the ongoing Russia-Ukraine war. Traders took some support with another report stated that India’s engineering exports stood at $9.79 billion in May 2022, recording a growth of 13.5 percent over the $8.62 billion reported in the same month a year ago, while the country saw its cumulative engineering exports growing by 16.84 percent at $19.39billion ($16.6 billion) during April-May 2022 period.

However, markets trimmed some gains in afternoon deals, as some concern came with private report stated that India's current account deficit (CAD) is expected to widen and be in the range of 2.6 per cent to 2.8 per cent of gross domestic product (GDP) in the current financial year FY23. The high merchandise trade deficit coupled with the fund outflow from financial markets has weakened India's external account or balance of payment position. But, markets soon gained traction to end higher, taking support from a new Nasscom report showing that the adoption of artificial intelligence (AI) and data utilisation strategy can add $500 billion to India's GDP by 2025. Additional support also came as Prime Minister Narendra Modi said that Mutual cooperation between the BRICS nations could help in global recovery after the coronavirus pandemic.

On the global front, European markets were trading higher as near-term worries around inflation eased somewhat amid growing concerns about a recession. Markets ignored survey results showing that German business morale fell more than expected in June. The Ifo institute said its business climax index dropped to 92.3 from 93.0 in May. Asian markets settled higher on Friday as a continuous decline in commodities from crude oil, to metals to cotton, helped ease fears around runaway inflation. Traders also digest comments from US Fed Chair Jerome Powell on the second day of his testimony. Powell again stressed that the Fed hopes to rein in the worst inflation in four decades without pushing the economy into a recession, but acknowledged that path has gotten more and more challenging.

Back home, stocks related to power sector were in watch as Crisil Ratings in its latest report has said that the government's scheme to liquidate overdue can help release Rs 9,000 crore dues owed by the distribution companies (discoms) to renewable energy (RE) generation companies (Gencos) over the next two fiscal. Steel sector stocks also were in action as the Indian Steel Association (ISA) has welcomed the government's Agnipath scheme saying the industry needs Agniveers as such talent can help achieve the country's 300 MT steel production capacity target.

Finally, the BSE Sensex rose 462.26 points or 0.88% to 52,727.98 and the CNX Nifty was up by 142.60 points or 0.92% to 15,699.25.

The BSE Sensex touched high and low of 52,909.87 and 52,447.25, respectively. There were 23 stock advancing against 7 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 1.53%, while Small cap index was up by 1.60%.

The top gaining sectoral indices on the BSE were Telecom up by 2.53%, Auto up by 1.98%, Utilities up by 1.76%, Power up by 1.73% and Consumer Discretionary up by 1.68%, while IT down by 0.59% and TECK down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.28%, Indusind Bank up by 2.59%, Bajaj Finance up by 2.58%, Hindustan Unilever up by 2.30% and ICICI Bank up by 2.02%. On the flip side, Tech Mahindra down by 1.03%, Infosys down by 0.77%, HCL Technologies down by 0.50%, TCS down by 0.49% and Wipro down by 0.16% were the top losers.

Meanwhile, the Securities and Exchange Board of India (SEBI) in its latest data has showed that investment in the Indian capital markets through participatory notes (P-notes) dropped to Rs 86,706 crore until end-May from the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. However, they need to go through a due diligence process.

According to the data, the value of P-note investments in Indian markets - equity, debt, and hybrid securities - stood at Rs 86,706 crore end-May, compared with Rs 90,580 crore end-April. In March, the investment was at Rs 87,979 crore. It was Rs 89,143 crore in February and Rs 87,989 crore in January.

Of the total Rs 86,706 crore invested through the route until May, Rs 77,402 crore was invested in equities, Rs 9,209 crore in debt, and Rs 101 crore in hybrid securities. In comparison, Rs 81,571 crore was invested in equities and Rs 8,889 crore in debt during April.

The CNX Nifty traded in a range of 15,749.25 and 15,619.45. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.36%, Hero MotoCorp up by 2.84%, Indusind Bank up by 2.75%, Bajaj Finance up by 2.44% and Hindustan Unilever up by 2.23%. On the flip side, Tech Mahindra down by 1.04%, Infosys down by 0.77%, Apollo Hospitals Enterprise down by 0.69%, NTPC down by 0.59% and TCS down by 0.42% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 94.01 points or 1.34% to 7,114.46, France’s CAC increased 107.56 points or 1.83% to 5,990.89 and Germany’s DAX increased 99.25 points or 0.77% to 13,011.84.

Asian markets settled higher on Friday tracking solid gains from Wall Street overnight. Further, continuous decline in commodity prices also helped ease fears around inflation and a possible global recession. Investors will be looking ahead to US inflation data due next week. Chinese shares gained amid signs that crackdown on big tech is softening at the edges. Japanese shares ended higher, but the battered yen found some support after Japan's annual core consumer inflation topped the central bank's 2% target for a second straight month in May and that’s putting some more pressure on its ultra-easy policy stance.

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