Market Outlook - September 2024

 Market Update

The month began with a sharp decline in Indian markets, in line with the trends in the global markets. Strength in Japanese yen led to a sell-off in Japan and weaker-than-expected US employment figures as well as geo-political tensions in the Middle East were the major reasons for the weak sentiments. However, Indian markets recovered quite well with the Nifty Index ending the month up 1.1%. The sectoral indices had a mixed finish. PSU (-4%), real estate (-4%) and capital goods (-3%) were the main losers, while healthcare (+7%), consumer durables (+4%), and IT (+4%) were the biggest winners. Brazil, Indonesia, and the Philippines saw gains of 6.5%, 6%, and 4% worldwide, while South Korea, Shanghai, and Mexico fell 3.5%, 3%, and 2% respectively.

Foreign Portfolio Investors (FPIs) bought US$320 million of Indian equities in the secondary market, whereas Domestic Institutional Investors (DIIs) continued to be huge buyers at US$5.8 billion for the month.

Macro Update

On the economy front, CPI inflation in July fell to 3.5% from 5.1% in June, supported by a favorable base despite a continued increase in vegetable prices. WPI inflation in July fell to 2% from 3.4% in June. IIP growth in June was 4.2% compared to 6.2% in May. Real GDP growth in 1QFY25 eased to 6.7% compared to 7.8% in 4QFY24. India had a trade deficit with 75 countries, which accounted for 44.2 per cent of its exports and 83.5 per cent of its imports, resulting in a $185.4 billion deficit, much larger than India’s overall trade deficit. The gross GST collection, which is the number before adjusting refunds, stood at Rs 1.75 trillion in August, with growth tapering slightly to 10 per cent Y-o-Y from 10.3 per cent in the previous month. Gross GST revenue stood at Rs 1.82 trillion in July 2024. India 10-year G-sec yield ended the month at 6.86%. The INR for the month was stable and closed at ~83.9. Brent crude price fell to USD 80.00 per barrel in the month of August’24.