Indian indices trade in fine-fettle in early deals; Nifty surpasses 16,600 mark

Continuing their bull-run seen in the previous session, Indian equity benchmarks made gap-up opening on Monday, tracking gains in global markets. Markets are trading in fine-fettle in early deals with gains of over one and half a percent each on sustained buying in IT, Consumer Durables and TECK stocks. Traders took encouragement as RBI data showed that India’s forex reserves increased by $4.23 billion to $597.509 billion for the week ended May 20 on the back of a high accretion of core currency assets. Some support also came in with report that State finances showed improvement in 2021-22 as the consolidated gross fiscal deficit (GFD) of 26 states was lower by 31.5 per cent than a year ago. Besides, investors are eyeing the GDP numbers to be out later in the week for further cues. Meanwhile, Prime Minister Narendra Modi will release the 11th installment of financial benefits worth Rs 21,000 crore under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme to more than 10 crore farmers on May 31 in Shimla, Himachal Pradesh.

Most of the Asian markets are trading higher following the broadly positive cues from Wall Street on Friday, amid easing concerns about interest rate hikes as data from the U.S. showed a slowdown in U.S. core consumer price growth in the month of April. Technology stocks also led the way higher, mirroring their peers on the tech-heavy Nasdaq. Back home, crude oil-related stocks were in limelight as Brent crude has surged past $120/barrel-mark. Aviation companies are trading lower, while oil exploration firms are gaining. In stock specific movement, Unichem Labs gained as it posted net profit of Rs 71.5 crore in Q4FY22 as against a loss of Rs 91 lakh during the last period.

The BSE Sensex is currently trading at 55784.30, up by 899.64 points or 1.64% after trading in a range of 55466.30 and 55798.90. All the 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.54%, while Small cap index was up by 1.66%.

The top gaining sectoral indices on the BSE were IT up by 3.08%, Realty up by 2.88%, Consumer Durables up by 2.88%, TECK up by 2.69%, Capital Goods up by 2.08%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Titan Company up by 4.23%, HCL Technologies up by 3.70%, Infosys up by 3.50%, Tech Mahindra up by 3.20% and Ultratech Cement up by 2.63%.

Meanwhile, amid rising inflationary pressure, Reserve Bank of India (RBI), in its annual report, has pitched for structural reforms for sustained economic growth, and asked banks to remain watchful of possible slippages in restructured loans. It also said the number of Rs 2,000 denomination notes fell to 1.6 per cent of the total currencies in circulation as on March 2022 from 2 per cent in the year-ago period. It stressed that the future path of growth would be conditioned by addressing supply-side bottlenecks, calibrating monetary policy to bring down inflation and boosting capital spending.

The central bank said ‘Undertaking structural reforms to improve India’s medium-term growth potential holds the key to secure sustained, balanced and inclusive growth, especially by helping workers adapt to the after-effects of the pandemic by reskilling and enabling them to adopt new technologies for raising productivity’.  It added that the escalation of geopolitical tensions into war from late February 2022 has delivered a brutal blow to the world economy, battered as it has been through 2021 by multiple waves of the pandemic, supply chain and logistics disruptions, elevated inflation and bouts of financial market turbulence, triggered by diverging paths of monetary policy normalisation.

The report said ‘The immediate impact of geopolitical aftershocks is on inflation, with close to three-fourths of the consumer price index at risk. The elevation in international prices of crude, metals and fertilisers has translated into a term of trade shock that has widened trade and current account deficits’. Due to the ongoing Russia-Ukraine war, global commodity prices have moved northwards as supply lines have been severely impacted leading to a rise in worldwide inflation. On the price situation, the report said there is a risk of high Wholesale Price Inflation (WPI) putting pressure on the retail inflation, albeit with a lag.

The CNX Nifty is currently trading at 16609.00, up by 256.55 points or 1.57% after trading in a range of 16506.15 and 16625.40. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 3.95%, HCL Technologies up by 3.80%, Infosys up by 3.51%, Adani Ports & SEZ up by 3.39% and Tech Mahindra up by 3.26%. On the flip side, JSW Steel down by 2.75%, Apollo Hospital down by 0.67% and Dr. Reddy's Lab down by 0.19% were the few losers.

Asian markets are trading mostly in green; Nikkei 225 surged 544.44 points or 2.03% to 27,326.12, Straits Times rose 7.76 points or 0.24% to 3,238.31, Hang Seng jumped 400.79 points or 1.94% to 21,098.15, Taiwan Weighted soared 261.04 points or 1.60% to 16,527.26, KOSPI advanced 32.02 points or 1.21% to 2,670.07 and Shanghai Composite was up by 9.85 points or 0.31% to 3,140.09, while Jakarta Composite was down by 36.33 points or 0.52% to 6,989.93.