Post Session: Quick Review

Indian equity benchmarks traded jubilantly throughout the day and ended session with around a percent gain on Tuesday. Markets made gap-up opening as traders took encouragement with report that foreign institutional investors (FIIs) have bought (net) shares worth Rs 312.31 crore on September 19, as per provisional data available on the NSE. Indices continued their healthy gains, as sentiments remained positive with a private survey report indicating that Indian consumers are concerned about rising costs but 71 per cent of them believe the economy will recover within a year. Traders ignored report that surplus liquidity in the banking system as measured by absorption of excess funds by the Reserve Bank of India (RBI) fell sharply at the end of the last week due to outflows on account of advance tax payments.

Markets extended gains in noon deals as sentiments remained upbeat on reports that the commerce and industry ministry is planning a multi-media campaign to promote over 400 GI (Geographical Indication) products such as Darjeeling Tea, Chanderi Fabric, Mysore Silk, and Kashmir Walnut Wood Carving. It added this would further increase employment avenues for the producers and boost the economy. Traders took note of report that India and Saudi Arabia have discussed the feasibility of institutionalizing trade in rupee and riyal and the introduction of UPI (Unified Payment Interface) and RuPay card there. Diversification and expansion of trade and commerce, removal of trade barriers, automatic registration and marketing authorization of Indian pharma products in Saudi Arabia, feasibility of institutionalizing Rupee-Riyal trade, introduction of UPI and Rupay cards in Saudi Arabia; were amongst the key points of discussion. However, markets trimmed some of their gains in late trade as traders remained little jittery ahead of U.S. Federal Reserve's policy decision this week.

On the global front, European markets were trading lower after Sweden's central bank hiked interest rates by a full percentage point to 1.75 percent in a surprise move and data showed German producer prices rose in August at their strongest rate since records began both in annual and monthly terms.

The BSE Sensex ended at 59,719.74, up by 578.51 points or 0.98% after trading in a range of 59,556.91 and 60,105.79. There were 24 stocks advancing against 6 stocks declining on the index (Provisional).

The broader indices ended green; the BSE Mid cap index gained 1.65%, while Small cap index was up by 1.01% (Provisional).

The top gaining sectoral indices on the BSE were Healthcare up by 2.81%, Consumer Durables up by 2.17%, Auto up by 1.59%, Realty up by 1.53% and Metal up by 1.34%, while there were no losing sectoral indices on the BSE (Provisional).

The top gainers on the Sensex were Sun Pharma up by 4.22%, Dr. Reddy's Lab up by 3.31%, Tata Steel up by 2.86%, Indusind Bank up by 2.77% and Titan Company up by 2.10%. On the flip side, Nestle down by 0.64%, ITC down by 0.22%, Infosys down by 0.21%, Power Grid down by 0.15% and Reliance Industries down by 0.11% were the top losers (Provisional).

Meanwhile, India Ratings in its latest note has said that it expects the current account deficit (CAD) of India to hit a 36-quarter high of 3.4 per cent of gross domestic product (GDP) or USD 28.4 billion in the June quarter 2022, against a 0.9 per cent surplus a year ago.

It mentioned in the March 2022 quarter, the deficit was a moderate 1.5 per cent or USD 13.4 billion, while in Q1FY22 the current account surplus was USD 6.6 billion or 0.9 per cent of GDP when the country was hit by the second wave of the pandemic. Moreover, it stated as a share of GDP, the current account deficit is expected to jump to a 36-quarter high after the 1QFY14 when it was 4.7 per cent.

In absolute terms, it will be at a 38-quarter high after 3QFY13 when the deficit was USD 31.8 billion. Although merchandise exports touched a record high of USD 121.2 billion in Q1FY23, outward shipments are likely to slow down and come in at USD104.2 billion in Q2FY23, growing by a meagre 1.4 per cent in Q2 due to global headwinds.

The CNX Nifty ended at 17,816.25, up by 194.00 points or 1.10% after trading in a range of 17,744.40 and 17,919.30. There were 44 stocks advancing against 6 stocks declining on the index (Provisional).

The top gainers on Nifty were Apollo Hospital up by 5.83%, Cipla up by 5.40%, Sun Pharma up by 4.24%, Eicher Motors up by 3.38% and Indusind Bank up by 3.13%. On the flip side, Nestle down by 0.79%, Shree Cement down by 0.68%, Grasim Industries down by 0.44%, Power Grid down by 0.19% and Infosys down by 0.13% were the top losers (Provisional).

European markets were trading lower, UK’s FTSE 100 decreased 13.44 points or 0.19% to 7,223.24, France’s CAC decreased 52.00 points or 0.86% to 6,009.59 and Germany’s DAX was down by 91.88 points or 0.72% to 12,711.36.

Asian markets settled higher on Tuesday, tracking wall street gains overnight, despite lingering uncertainty over the quantum of US Federal Reserve policy rate hike. Investors are focused on the Fed’s policy meeting slated to begin later today, where the Fed is expected to hike interest rates by another 75 basis points to tame high inflation. Chinese shares rose after the Chinese central bank kept its benchmark lending rates unchanged in line with market expectations. Moreover, Japanese shares gained even as Core inflation in Japan increased 2.8 percent from a year ago, the fastest rate of increase since late 2014.