Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading in green terrain, on the back of positive cues from other Asian markets. Domestic sentiments remained positive, after RBI Governor said that FPIs after remaining in exit mode in first quarter have turned positive in July. Besides, the RBI retained its retail inflation forecast for current fiscal year at 6.7 per cent amid geopolitical developments and higher global commodity prices, hoping inflationary pressures to ease further.

Traders were seen taking a note of report that to maintain external sector balance at a comfortable level over the medium term, the International Monetary Fund (IMF) has recommended that India should gradually withdraw its fiscal and monetary policy stimulus, develop export infrastructure, and negotiate free-trade agreements with key trading partners to provide a sustainable boost to exports.

On the global front, Asian markets were trading mostly in green, after Indonesia's economic growth accelerated more-than-expected in the three months ended June. The Statistics Indonesia reported that gross domestic product advanced 5.44 percent year-over-year in the second quarter, faster than the 5.01 percent rise in the previous quarter.

The BSE Sensex is currently trading at 58505.61, up by 206.81 points or 0.35% after trading in a range of 58330.15 and 58649.19. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Telecom up by 1.29%, Basic Materials up by 1.08%, TECK up by 1.00%, IT up by 0.88% and Bankex up by 0.75%, while Oil & Gas down by 0.66%, Auto down by 0.44%, Consumer Durables down by 0.38%, Energy down by 0.37% and Utilities down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.45%, ICICI Bank up by 1.96%, Bharti Airtel up by 1.79%, Infosys up by 1.30% and SBI up by 1.29%. On the flip side, Maruti Suzuki down by 1.13%, Reliance Industries down by 1.03%, Indusind Bank down by 0.76%, Power Grid down by 0.48% and HDFC down by 0.40% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has increased the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points (bps) to 5.40 per cent with immediate effect. Consequently, the standing deposit facility (SDF) rate stood adjusted to 5.15 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.65 per cent.

The RBI’s Monetary Policy Committee (MPC) also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. These decisions are in consonance with the objective of achieving the mediumterm target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

On the inflation front, the inflation projection is retained at 6.7 per cent in 2022-23, with Q2 at 7.1 per cent; Q3 at 6.4 per cent; and Q4 at 5.8 per cent, and risks evenly balanced. The real GDP growth projection for 2022-23 is retained at 7.2 per cent, with Q1 at 16.2 per cent; Q2 at 6.2 per cent; Q3 at 4.1 per cent; and Q4 at 4.0 per cent, and risks broadly balanced.

The CNX Nifty is currently trading at 17440.15, up by 58.15 points or 0.33% after trading in a range of 17389.30 and 17474.40. There were 30 stocks advancing against 19 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Ultratech Cement up by 2.55%, ICICI Bank up by 2.02%, Bharti Airtel up by 1.69%, Grasim Industries up by 1.50% and SBI up by 1.37%. On the flip side, Hindalco down by 1.26%, Reliance Industries down by 1.08%, Maruti Suzuki down by 1.08%, Eicher Motors down by 0.93% and Hero MotoCorp down by 0.78% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 333.84 points or 2.27% to 15,036.04, Nikkei 225 surged 243.67 points or 0.87% to 28,175.87, KOSPI rose 19.48 points or 0.79% to 2,492.59, Jakarta Composite soared 13.22 points or 0.19% to 7,070.57, Shanghai Composite gained 10.16 points or 0.32% to 3,199.20 and Straits Times advanced 9.76 points or 0.30% to 3,279.62. On the flip side, Hang Seng decreased 6.25 points or 0.03% to 20,167.79.