Benchmarks trade higher in early deals on easing retail inflation

Indian equity benchmarks started the session in green on Tuesday as retail inflation eased amid mixed global cues. Markets are trading higher in early deals with notable gains on account of buying in Realty, Utilities and Consumer discretionary stocks. Sentiments got a boost as the government data showed that India's retail inflation in August marginally eased to 5.3%, staying within Reserve Bank of India's comfort zone for a second month. Inflation in the food basket was 3.11% in August compared to 3.96% in the preceding month. Addition optimism, Union finance minister Nirmala Sitharaman has reiterated that the disinvestment plan of the government was on track and the Development Finance Institution (DFI), announced in the Budget, will become operational soon. Meanwhile, 15th Finance Commission Chairman N K Singh said India should take credible steps to return to the path of fiscal rectitude once the COVID pandemic is over. However, upside remained capped as investor are looking ahead to the wholesale inflation numbers to be out later in the day.

On the global front, most of the Asian markets are trading higher following the mixed cues from Wall Street overnight, supported mainly by crude oil prices, while investors continued to track updates about the spread in the delta variant of the coronavirus in the region, and the news of fresh regulatory crackdowns on Chinese firms. Back home, insurance industry stocks were in focus as Regulator IRDAI allowed insurers to continue selling and renewing short-term Covid specific health insurance policies till March 2022. In scrip specific development, Avenue Supermarts traded higher as its retail chain D-Mart has opened a new store at Faridabad, Haryana, which is its second one in Delhi-NCR.

The BSE Sensex is currently trading at 58378.20, up by 200.44 points or 0.34% after trading in a range of 58310.27 and 58482.62. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.00%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Realty up by 1.10%, Utilities up by 1.04%, Consumer discretionary up by 1.03%, Power up by 0.82%, Bankex up by 0.74%, while Telecom down by 0.17% was the sole losing index on BSE.

The top gainers on the Sensex were HCL Technologies up by 1.24%, Axis Bank up by 1.16%, Kotak Mahindra Bank up by 0.88%, Tech Mahindra up by 0.83% and Bajaj Auto up by 0.80%. On the flip side, Bharti Airtel down by 0.38%, Hindustan Unilever down by 0.18%, HDFC down by 0.18%, Ultratech Cement down by 0.13% and Power Grid down by 0.12% were the top losers.

Meanwhile, Union finance minister Nirmala Sitharaman has reiterated that the disinvestment plan of the government was on track and the Development Finance Institution (DFI), announced in the Budget, will become operational soon. Expressing satisfaction that liquidity was no longer a major concern, Sitharaman said the bank-NBFC-MFI channel has been de-clogged and from October 15, there would be a special drive to reach the credit to those who need it.

She emphasised on the trust the government reposes in industry while pointing out that this trust was important to leverage the opportunities thrown up by the pandemic, which was also reflected in government’s actions.

Besides, elaborating on the government’s strategy for handling the pandemic, she said on one hand the focus was on ramping up vaccination as that was the big protection against the pandemic, the government was also working on ramping up health infrastructure, including in the tier 2 and tier 3 cities, by supporting the private sector. She stated the ongoing dialogues with industry has enabled the government to take a series of actions, as the pandemic situation evolved.

The CNX Nifty is currently trading at 17423.70, up by 68.40 points or 0.39% after trading in a range of 17389.10 and 17438.55. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 1.77%, Eicher Motors up by 1.49%, Tata Motors up by 1.36%, Axis Bank up by 1.31% and HCL Technologies up by 1.23%. On the flip side, Coal India down by 0.42%, Ultratech Cement down by 0.28%, HDFC down by 0.27%, Grasim Industries down by 0.27% and Hindustan Unilever down by 0.24% were the top losers.

Asian markets are trading mostly higher; Nikkei 225 rose 175.00 points or 0.57% to 30,622.37, Straits Times gained 11.61 points or 0.38% to 3,085.92, Taiwan Weighted added 11.41 points or 0.07% to 17,457.72, KOSPI surged 29.61 points or 0.95% to 3,157.47, Jakarta Composite increased 30.30 points or 0.50% to 6,118.46 and Shanghai Composite was up by 1.89 points or 0.05% to 3,717.26, while Hang Seng fell 28.84 points or 0.11% to 25,784.97.