Domestic indices trade in fine-fettle in early deals ahead of WPI data

Indian equity benchmarks extended their previous session’s gains with optimistic start on Tuesday mirroring firm trade in Asian counterparts. Domestic indices are trading in fine-fettle in early deals with gains on over half a percent each. Sentiments got a boost with Sanjiv Bajaj, the newly-elected president of industry body CII, stating that the Reserve Bank’s decision to raise benchmark interest rates and the likelihood of a good monsoon will help in containing inflation. CII estimates India's GDP growth to be in the band of 7.4-8.2 percent, depending upon the global oil prices. Traders took note of report that the commerce ministry’s investigation arm DGTR has recommended for continuation of anti-dumping duty on Chinese solar glass for two years with a view to guard domestic players from cheap imports. Though, upside remained capped amid cautiousness as Foreign Institutional Investors (FII) were net sellers once again on Monday. FIIs pulled out Rs 1,788 crore from domestic markets.

On the global front, Asian markets are trading higher on reports that Shanghai plans to gradually reopen after spending more than six weeks in lockdown after recent data showed a sharp contraction in Chinese economic activity. Back home, aviation industry stocks were in focus after a hike in jet fuel prices. In scrip specific developments, Fino Payments Bank gained after its quarterly net profit more-than-doubled. Raymond jumped after reporting over four-fold rise in quarterly net profit. Meanwhile, Life Insurance Corporation (LIC) is set to list its shares on stock exchanges today. LIC's highly-anticipated initial public offering (IPO), which lasted from May 4 to May 9, was subscribed 2.95 times.

The BSE Sensex is currently trading at 53305.47, up by 331.63 points or 0.63% after trading in a range of 53176.02 and 53400.12. There were 22 stocks advancing against 7 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.60%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Metal up by 4.19%, Basic Materials up by 1.88%, Energy up by 1.22%, Oil & Gas up by 0.95%, Industrials up by 0.87%, while Realty down by 0.23% and Healthcare down by 0.09% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.05%, Reliance Industries up by 1.60%, ICICI Bank up by 1.26%, Hindustan Unilever up by 1.26% and HCL Technologies up by 1.11%. On the flip side, Asian Paints down by 1.20%, Sun Pharma down by 0.59%, NTPC down by 0.27%, Tech Mahindra down by 0.26% and Infosys down by 0.17% were the top losers.

Meanwhile, the industry body -- Confederation of Indian Industry’s (CII) newly-elected President Sanjiv Bajaj has expressed optimism that the Reserve Bank of India's (RBI’s) decision to raise benchmark interest rates and the likelihood of a good monsoon will help in containing inflation. He said ‘I do believe that we are now in an era of higher interest rates. This will help us bring down inflation, at least a part of that going forward’. He said various factors combined with the hope of a strong monsoon ‘should put us in a better place’ by the second half of the year for policymakers to decide where inflation and interest rates move. Bajaj observed that the rise of inflation has two aspects - demand and supply side.

He said ‘RBI has already started the cycle of taking interest rates up and we should expect interest rates to continue moving up in the coming year. We would expect a clear direction from RBI on how they are going to address interest rates. Hopefully in the next monetary policy review we should be able to hear something to that extent from them.’ CII estimates India's GDP growth to be in the band of 7.4-8.2 percent, depending upon the global oil prices. He further explained ‘global headwinds and inflation will have to be countered with robust policy reforms, both domestic and external sector reforms, to unlock the growth potential of the economy.’

Sharing the vision for the economy, Bajaj said that India has the potential to become a $40 trillion economy by the time it turns 100, in 2047, with milestones at $5 trillion by 2026-27 and $9 trillion by 2030-31. Highlighting the sectoral drivers of growth, he elaborated that manufacturing and services will be the twin engines of growth. The enabling policies of the government, particularly the PLI scheme, are expected to push manufacturing sector's contribution in gross value addition to 27 percent by FY48. Similarly, services, too, will witness its share rising from 53 percent to 55 percent in the terminal year. The contribution of exports to GDP must rise while the investment rate must be stepped up.

The CNX Nifty is currently trading at 15935.40, up by 93.10 points or 0.59% after trading in a range of 15900.80 and 15977.50. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 5.61%, Tata Steel up by 3.87%, JSW Steel up by 3.60%, ONGC up by 2.83% and Coal India up by 2.39%. On the flip side, Cipla down by 1.68%, Asian Paints down by 1.57%, HDFC Life Insurance down by 0.63%, Sun Pharma down by 0.60% and Shree Cement down by 0.50% were the top losers.

All the Asian markets are trading in green; Nikkei 225 rose 74.70 points or 0.28% to 26,621.75, Straits Times added 13.39 points or 0.42% to 3,204.55, Hang Seng surged 443.78 points or 2.22% to 20,393.99, Taiwan Weighted jumped 172.56 points or 1.09% to 16,073.60, KOSPI advanced 20.67 points or 0.80% to 2,617.25, Jakarta Composite gained 69.95 points or 1.06% to 6,667.94 and Shanghai Composite was up by 8.91 points or 0.29% to 3,082.66.