Benchmarks end higher on Monday; Nifty reclaims 17,650 mark

Indian equity benchmarks ended higher over half percent on Monday, with Nifty settling above crucial 17,650 mark, while Sensex ending above 59,200 mark. Key gauges made optimistic start and stayed in green for whole day, as traders took encouragement with a State Bank of India report stated India is likely to become the third largest economy by 2029. India is currently ranked fifth largest economy. Some support also came as hoping for a double-digit growth in GDP in this financial year, Union Finance Minister Nirmala Sitharaman said the nation is on a strong wicket when compared to others, and is responsive in terms of extending hand-holding to the required sections. Traders also found some solace with report that foreign investors have pumped in a little over Rs 51,200 crore into the Indian equity markets in August, making it the highest inflow in 20 months, amid improving risk sentiment and stabilisation in oil prices. 

Key gauges extended their gains in late afternoon session as S&P Global in a report said India’s Services PMI rose to 57.2 in August from July’s 4-month low of 55.5, on stronger expansion in new work intakes, upturn in business activity, and the sharpest rise in employment for over 14 years. Adding more optimism on the street, a private report said India has overtaken the U.K. to become the world's fifth-largest economy and is now behind only the US, China, Japan and Germany. A decade back, India was ranked 11th among the large economies while the U.K. was at the fifth position. Traders overlooked Former RBI governor D Subbarao’s statement that India's GDP growth of 13.5 per cent in the April-June quarter of 2022-23 (Q1FY23) has turned out be a cause for 'disappointment and concern', as there was expectation of a bigger bounce back from the first quarter of last year when economic activity was crippled by the Delta wave of COVID-19.

On the global front, European markets were trading lower after Russia extended a halt on gas flows through a major pipeline to Europe, sparking further fears of energy rationing in the region as winter approaches. Asian markets ended mostly lower on Monday as U.S. rate hike worries persisted, and China tightened COVID-19 curbs in some big cities. There were fears over energy rationing in Europe after Russia said one of its main supply pipelines to Europe would remain shut indefinitely.

Back home, metal stocks remained in focus as Icra said it expects steel prices to remain under pressure in the country over the near future as the prices in the domestic market cannot be cushioned from the global trends. There were some reaction in railways stocks with a private report that Indian Railways’ freight earnings touched Rs 12,926 crore in August, fuelled by increased coal supply to meet the record power demand. The national transporter carried 119 million tonnes (mt) of goods and raw materials during last month, growing by 7.9 per cent year-on-year (YoY).

Finally, the BSE Sensex rose 442.65 points or 0.75% to 59,245.98 and the CNX Nifty was rose by 126.35 points or 0.72% to 17,665.80.

The BSE Sensex touched high and low of 59,308.25 and 58,812.20, respectively. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.46%, while Small cap index was up by 0.89%.

The top gaining sectoral indices on the BSE were Metal up by 2.04%, Capital Goods up by 1.07%, Telecom up by 0.93%, Basic Materials up by 0.91%, Bankex up by 0.89% while, Oil & Gas down by 0.32%, Power down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.81%, ITC up by 1.78%, NTPC up by 1.70%, Reliance Industries up by 1.60% and Larsen & Toubro up by 1.45%. On the flip side, Nestle down by 1.51%, Ultratech Cement down by 0.78%, Wipro down by 0.54%, Power Grid Corporation down by 0.25% and Asian Paints down by 0.18% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has expressed aspiration for a double-digit growth in gross domestic product (GDP) in this financial year, and said the nation is on a strong wicket when compared to others, and is responsive in terms of extending hand-holding to the required sections. She also said the country has zero per cent chance of slipping into recession.

She said ‘I hope for (double-digit growth). We will work for it…So if you’re not on the verge of recession, it also gives me the confidence that if you are constantly responsive in terms of the sections which need hand-holding, in terms of the boost that we have to give to the economy…’. Recent figures released by the Centre indicated that the nation clocked 13.5 per cent growth in GDP in the first quarter of the current financial year. It was 20.1 per cent a year ago.

She further said some may argue that the high growth rate is because of the low base. She added ‘compared to economies we are talking about, we are on a sound wicket. We are literally the fastest growing economy’. Referring to the World Bank and IMF reports, the Union minister said she was also taking into consideration the fact that economies which were far more developed than India and comparable with the country, are on the verge of recession.

The CNX Nifty traded in a range of 17,683.15 and 17,540.35. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.35%, JSW Steel up by 3.11%, NTPC up by 1.79%, ITC up by 1.73% and Sun Pharma up by 1.58%. On the flip side, Nestle down by 1.71%, Bajaj Auto down by 1.71%, Britannia Industries down by 1.11%, Ultratech Cement down by 1.05% and Eicher Motors down by 0.75% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 45.98 points or 0.63% to 7,235.21, France’s CAC decreased 106.55 points or 1.73% to 6,060.96 and Germany’s DAX decreased 325.92 points or 2.5% to 12,724.35.

Asian markets ended mostly lower on Monday following the broadly negative cues from US markets on Friday as investors reacted to a key US jobs report which showed hiring slowed in August, as widely expected, and the unemployment rate ticked up to 3.7%. Market sentiments weakened further on fears over energy rationing in Europe after Russia said one of its main supply pipelines to Europe would remain shut indefinitely. Japanese shares dropped after the final au Jibun Bank Japan Services purchasing managers' index falling to a seasonally adjusted 49.5 in August, marking the first contraction since March. Hong Kong shares declined as Chinese authorities extended Covid-19 lockdowns of Chengdu and Shenzhen. However, Chinese shares gained after a private survey showed the country's services sector activity grew more than expected in August. The Caixin services purchasing managers index edged down to 55.0 in August from 55.5 in July but remained firmly in expansion territory.