Benchmarks settle near day’s high; Nifty ends above 17,750 mark

Tuesday turned out to be a fabulous day of trade for the Indian equity benchmarks, with frontline gauges garnering gains of over two and half percent as buying interest was seen across all sectors. After the gap-up start, the benchmarks moved from strength to strength till the end and settled around the day’s high. Traders also took some encouragement with a joint survey conducted by industry body FICCI and Indian Banks' Association revealing that the economic activity in India is in recovery mode as growth seen broad basing with most sectors operating at pre-pandemic levels. The uptick in growth was despite a muted start to this year due to emergence of Omicron variant. Some support also came in with Commerce and Industry Minister Piyush Goyal’s statement that India is looking at getting duty-free access for different products identified under One District One Product (ODOP) initiative, to promote their exports . The Minister said that these products, which include gold jewellery, toys, handicrafts and handlooms, hold huge opportunities.

Markets extended gains in last leg of trade which mainly helped markets to end near intraday high levels, as some support came with Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy’s statement that Indian economy's size will touch $20 trillion by 2047 provided the annual average growth is 7-7.5 percent in the next 25 years. He also said the country's annual per capita income will be over $10,000 if the country grows at an average economic growth rate of 7-7.5 percent in the next 25 years. Some optimism also came as credit rating agency Icra in its a note based on the analysis of 620 listed companies, excluding financial sector entities, has said that India Inc saw a 39 per cent jump in top lines during April-June quarter. However, it said their operating margins declined 213 basis points to 17.7 per cent due to input cost inflation.

On the global front, European markets were trading higher even as the European Commission said that its economic sentiment indicator declined to 97.6 in August from 98.9 in July, the lowest reading since February 2021. Asian markets settled mostly higher on Tuesday despite a weak lead from Wall Street overnight. Investors seemed to go bargain hunting following steep losses in the previous session after the U.S. Federal Reserve pledged to fight inflation by keeping interest rates elevated. Back home, banking stocks were in watch as the Centre may revamp the target-setting mechanism for public sector banks (PSBs) and is looking to come up with a fresh framework to monitor the performance of state-owned lenders. The new framework could be on the lines of Statement of Intent (SoI) the government used to sign with PSBs to fix their annual targets.

Finally, the BSE Sensex rose 1564.45 points or 2.70% to 59,537.07 and the CNX Nifty was up by 446.40 points or 2.58% to 17,759.30.

The BSE Sensex touched high and low of 59,599.78 and 58,245.49, respectively. All the 30 stocks were advancing on the index. 

The broader indices were trading in green; the BSE Mid cap index rose 1.97%, while Small cap index was up by 1.40%.

The top gaining sectoral indices on the BSE were Realty up by 3.51%, Bankex up by 3.33%, Utilities up by 2.82%, Power up by 2.82% and Oil & Gas up by 2.65%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finserv up by 5.47%, Bajaj Finance up by 4.86%, Indusind Bank up by 4.38%, Tech Mahindra up by 3.96% and ICICI Bank up by 3.72%.

Meanwhile, in order to promote exports, Commerce and Industry Minister Piyush Goyal has said that India is looking at getting duty-free access for different products identified under One District One Product (ODOP) initiative. The Minister said that these products, which include gold jewellery, toys, handicrafts and handlooms, hold huge opportunities.

He mentioned ‘We are doing Free Trade Agreements (FTAs) where we are looking at duty-free access for all these products. So we can create international acceptance of these products.’ In a free trade pact, two or more countries significantly reduce or eliminate customs duties on the maximum number of goods traded between them to boost bilateral commerce. Further, he suggested a five-point approach for ODOP success and that includes - developing one-stop gifting destinations with high quality suppliers; involving students of institutions like National Institute of Design; and extensive training sessions for artisans.

Further, he stated ‘Let us look at creating art and crafts villages at the G20 destinations across India. This can become the seed which will help artisans for years and help tourism and will give visibility to ODOP.’ He also added that programmes like Startup India, Make In India and Open Network for Digital Commerce would further help boost the initiative.

The CNX Nifty traded in a range of 17,777.65 and 17,401.50. All the 50 stocks were advancing on the index.   

The top gainers on Nifty were Bajaj Finserv up by 5.42%, Bajaj Finance up by 4.99%, Indusind Bank up by 4.33%, Tech Mahindra up by 3.93% and ICICI Bank up by 3.87%.

European markets were trading higher; UK’s FTSE 100 increased 10.01 points or 0.13% to 7,437.32, France’s CAC increased 66.60 points or 1.07% to 6,288.88 and Germany’s DAX increased 228.24 points or 1.77% to 13,121.23.

Asian markets settled mostly higher on Tuesday, despite weak cues from Wall Street as concerns remained about the Federal Reserve's aggressive interest rate hikes to fight inflation. Japanese shares gained by a fresh round of weakness in the Japanese yen after the release of upbeat employment data. The jobless rate remained unchanged at 2.6% percent in July, while the availability of jobs grew for the seventh straight month to a more than two-year high, data showed. Although, Chinese and Hong Kong shares declined despite Chinese authorities pledged to stimulate the world’s second-largest economy.