Domestic indices trade higher in early deals; Sensex reclaims 60,000 mark

Indian equity benchmarks extended their previous session’s gains with flat-to-positive start on Wednesday mirroring their Asian peers coupled with cooling global oil prices. Domestic indices gained more traction and trading higher with gains of around 0.40% each in early deals. Sensex and Nifty are trading over their crucial 60,000 and 17,850 levels, respectively. Broader indices -- BSE Mid cap and Small cap -- are outperforming larger peers (Sensex and Nifty) with over half a percent gains. Traders took some encouragement as State Bank of India's (SBI) Chairman Dinesh Khara said that things might get better on the inflation front towards the end of September. He said the supply side constraints getting addressed and crude oil prices trending low will help ease the situation. Some support also came in as Moody's Analytics in a recent report on the Asia Pacific (APAC) region said global oil prices are expected to fall to almost $70 per barrel by the end of 2024.

Most of the Asian markets are trading higher ahead of the release of minutes of the U.S. Federal Reserve's latest policy meeting later in the day. Besides, Japan logged a trade deficit for a 12th consecutive month in July, as a surge in imports overwhelmed export growth. Meanwhile, Indonesia stock market is closed for trading on account of Independence Day holiday. Back home, gold jewellery stocks were in focus as Icra in its report stated that gold jewellery demand in India is likely to decline in the second and third quarters of this fiscal due to hike in import duty, high volatility in prices and inflationary pressure. In stock specific development, NTPC advanced as it floated tender to raise Rs 5,000 crore term loans from financial institutions.

The BSE Sensex is currently trading at 60062.56, up by 220.35 points or 0.37% after trading in a range of 59857.80 and 60064.11. 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 0.61%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Utilities up by 1.45%, Power up by 1.42%, Consumer Durables up by 0.82%, FMCG up by 0.76%, Telecom up by 0.74%, while Metal down by 0.04% was the sole losing index on BSE.

The top gainers on the Sensex were NTPC up by 3.00%, Bajaj Finance up by 2.41%, Bajaj Finserv up by 1.99%, Hindustan Unilever up by 1.62% and Asian Paints up by 1.17%. On the flip side, HDFC down by 0.40%, Mahindra & Mahindra down by 0.37%, TCS down by 0.29%, Infosys down by 0.24% and Kotak Mahindra Bank down by 0.23% were the top losers.

Meanwhile, Moody's Analytics in its recent report on the Asia Pacific (APAC) region has stated that global oil prices are likely to fall to almost $70 per barrel by the end of 2024. Indicating the increase in oil prices to $120/barrel in June after Russia's invasion of Ukraine and its fall to $100/barrel in August it said ‘this trend will continue; we expect crude prices to fall to almost $70 a barrel by the end of next year’. It noted that ‘for the APAC region's big oil importers, notably Singapore and Hong Kong, this will ease pinching price pressures’. According to Moody's Analytics, the impact of oil price increase has been varied for the APAC region.

As per the report, ‘for net energy importers such as Thailand, Japan, South Korea and Singapore, household energy bills have risen sharply. But for the region's key energy exporters, Indonesia, Malaysia and Australia, households have been more sheltered’. But coal and natural gas prices remain stubbornly high. The APAC region's big liquified natural gas (LNG) importers, including Japan, South Korea, Taiwan and China, are particularly vulnerable to sticky prices. Likewise, with coal prices elevated, big importers, including India, Pakistan and Vietnam, are paying more for what they need.

It said although higher commodity prices are hurting households and adding to global inflation pressures, some APAC exporters are benefiting from the price premium. Indonesia and Malaysia are the region's big oil exporters. Higher crude prices have given each an export price boost. Likewise, it added Australia is in the midst of an export boom, with elevated coal and LNG prices pushing its terms of trade to a record high. That's not only helping Australian firms tied to mining, but also government revenue through company profit tax receipts and royalties. Conversely, it also said energy importers such as South Korea and Japan have seen their import prices jump far more than their exports, resulting in a collapse in their terms of trade.

The CNX Nifty is currently trading at 17895.10, up by 69.85 points or 0.39% after trading in a range of 17833.35 and 17898.20. There were 38 stocks advancing against 11 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were NTPC up by 2.99%, HDFC Life Insurance up by 2.91%, Eicher Motors up by 2.57%, Bajaj Finance up by 2.18% and Bajaj Finserv up by 2.07%. On the flip side, Apollo Hospital down by 0.73%, Mahindra & Mahindra down by 0.44%, HDFC down by 0.37%, UPL down by 0.35% and HDFC Bank down by 0.28% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 284.01 points or 0.98% to 29,152.92, Straits Times added 11.82 points or 0.36% to 3,265.61, Hang Seng jumped 149.88 points or 0.76% to 19,980.40, Taiwan Weighted gained 1.63 points or 0.01% to 15,422.20 and Shanghai Composite was up by 9.14 points or 0.28% to 3,287.02, while KOSPI was down by 14.81 points or 0.58% to 2,518.71.