Indices end higher for 3rd straight day

Indian equity benchmarks extended their winning run for the third straight session on Monday, as buoyancy across the global markets boosted sentiment. Key gauges made gap-up opening, as sentiments got a boost with Commerce and Industry Minister Piyush Goyal’s statement that India is one of the fastest-growing economies in the world and it is expected to reach $30 trillion in the coming 30 years. He said if India grows at 8 per cent every year on a compounded annual growth basis, the economy will double in about nine years. Some optimism also came as a private report stated that India is rapidly emerging as a preferred country for foreign investments as the steps taken by the government led by Prime Minister Narendra Modi during the last eight years have borne fruit as is evident from the ever-increasing volumes of FDI inflow setting new records.

Key indices continued to trade in green in second half of trading session, taking support from a private report stating that India’s economy gathered momentum in May driven by pent up demand for services and higher output from industries as reopening continued from pandemic restrictions. Additional support also came as the Reserve Bank of India (RBI) said that net profits of manufacturing companies surged by 50.2 per cent during 2021-22, the input cost pressures notwithstanding. It said net profit also increased for the information technology (IT) companies, whereas the non-IT services sector continued to record losses at the aggregate level. However, markets trimmed some gains in late afternoon deals, as there was some cautiousness as too with latest data released by the Reserve Bank of India (RBI) showed India's foreign exchange reserves declined $5.9 billion to $590.59 billion for the week ended June 17.

On the global front, European markets were trading higher as investors reassessed the expected path of Federal Reserve interest-rate hikes in the light of falling inflation expectations. Asian markets settled mostly higher on Monday as fears of prolonged inflation eased and data showed profits at China's industrial firms shrank at a slower pace in May. As risk appetite improves, investors awaited the U.S. quarterly GDP growth rate numbers due this week to assess the outlook for U.S. rate hikes and the potential for a recession. 

Back home, power industry’s stocks were in watch as Power Minister RK Singh stated that the government would invite bids from states to sell electricity generated from 8,000 megawatt (MW) thermal capacities without power purchase agreements (PPAs). Sharing the government's plan to resolve the issue, he said that states have been asked to send their electricity requirement, and accordingly bids will be invited. There were some reaction in infrastructure industry stocks as Ministry of Statistics and Programme Implementation said as many as 423 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.95 lakh crore.

Finally, the BSE Sensex rose 433.30 points or 0.82% to 53,161.28 and the CNX Nifty was up by 132.80 points or 0.85% to 15,832.05.

The BSE Sensex touched high and low of 53,509.50 and 53,120.79, respectively. There were 27 stocks advancing against 3 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 0.87%, while Small cap index was up by 1.57%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.26%, IT up by 2.02%, TECK up by 1.84%, Metal up by 1.81% and Basic Materials up by 1.65%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.69%, Tech Mahindra up by 2.67%, HCL Technologies up by 2.61%, Indusind Bank up by 2.27% and Infosys up by 2.25%. On the flip side, Kotak Mahindra Bank down by 0.41%, Reliance Industries down by 0.35% and Titan Company down by 0.07% were the top losers.

Meanwhile, expressing optimism over the country’s growth, Commerce and Industry Minister Piyush Goyal has said that India is one of the fastest-growing economies in the world and it is expected to reach $30 trillion in the coming 30 years. He added if India grows at 8 per cent every year on a compounded annual growth basis, the economy will double in about nine years. He said the country’s economy at present stood at about $3.2 trillion and in nine years from today, it will be about $6.5 trillion. He further said ‘another nine years, that is 18 years from now, we will be about $13 trillion economy. And then another nine years after that, that is 27 years from now, we will be a $26 trillion economy… Then obviously, 30 years from today, confidently we can all expect that the Indian economy will be a $30 trillion economy’.

The minister said some ‘naysayers’ have raised questions on these numbers but they should come to places like Tiruppur to see the significant jump in the growth of sectors like textiles. He also said that the country’s economy is growing at a healthy pace even in the current challenging times because of the ongoing war between Ukraine and Russia and Covid-19 pandemic. He noted that the war has led to a shortage of certain commodities in the global markets and it has pushed the world inflation, but India has managed to maintain its inflation at a reasonable level.

About the textiles industry, he said the industry size at present is about Rs 10 lakh crore and exports are about Rs 3.5 lakh crore. Given the potential, the industry is targeting to reach Rs 20 lakh crore in terms of industry size and Rs 10 lakh crore exports in the next five years. He also said that Tiruppur has become a global apparel hub and is exporting goods worth over Rs 30,000 crore from Rs 15 crore, 37 years back. He added there is a need to create 75 such textile cities in the country. He highlighted that the sector provides direct employment to 6 lakh people and indirect employment to 4 lakh people, therefore, collectively providing employment to 10 lakh people. He added all over India, roughly 3.5-4 crore people are engaged in the total value chain of the textile sector alone. Textiles is the second largest provider of work after agriculture.

The CNX Nifty traded in a range of 15,927.45 and 15,815.50. There were 38 stocks advancing against 11 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were ONGC up by 3.31%, Coal India up by 3.14%, Larsen & Toubro up by 2.97%, HCL Technologies up by 2.70% and UPL up by 2.67%. On the flip side, Eicher Motors down by 1.46%, Apollo Hospital down by 1.23%, HDFC Life Insurance down by 0.45%, Kotak Mahindra Bank down by 0.29% and Britannia Industries down by 0.18% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 38.10 points or 0.53% to 7,246.91, France’s CAC increased 1.74 points or 0.03% to 6,075.09 and Germany’s DAX increased 102.49 points or 0.78% to 13,220.62.

Asian markets settled mostly higher on Monday after a surge in Wall Street at the end of last week and as hopes of less hawkish moves from the US Federal Reserve slightly eased fears of a global economic recession. Chinese shares gained after Shanghai declared victory over Covid-19 after the city reported zero new local cases for the first time in two months and data showed profits at China's industrial firms shrank at a slower pace in May. Although, investors are cautiously awaiting the US quarterly GDP growth rate numbers due this week.