Positive trade continues over Dalal Street

Positive trade continued over the Dalal Street in early afternoon session, with both Sensex and Nifty trading marginally higher. However, gains were limited in markets on the back of negative cues from other Asian markets. Besides, some worries came after RBI Monetary Policy Committee (MPC) member Shashanka Bhide said that the high inflation rate in the last three quarters is mainly a consequence of the exogenous price shocks, and addressing the issue will require coordinated policy effort, monetary policy and other economic policies. RBI MPC member further said the inflationary pressures are high and it certainly is a test for India's inflation targeting framework.

Traders also got cautious amid a report that as inflation remains high in India, tightening monetary policy measures and an adjusted economic growth forecast have altered the stakeholder sentiment for the next six months. As per National Real Estate Development Council and Knightfrank consumer sentiment index, the Current sentiment score has declined marginally from 62 in the second quarter of 2022 to 61 in the third quarter of 2022.

On the global front, Asian markets were trading mostly in red, after the Bank of Japan kept its massive monetary policy stimulus unchanged on Friday defying the global tightening stance, and maintained its guidance on the interest rate despite the weakening yen. The policy board, governed by Haruhiko Kuroda, unanimously decided to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank.

The BSE Sensex is currently trading at 59873.12, up by 116.28 points or 0.19% after trading in a range of 59746.80 and 60133.17. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index rose by 0.40%, while Small cap index was down by 0.37%.

The top gaining sectoral indices on the BSE were Energy up by 1.21%, Oil & Gas up by 0.95%, Auto up by 0.37%, Industrials up by 0.11% and PSU up by 0.02%, while Metal down by 1.76%, Realty down by 0.77%, Telecom down by 0.66%, Bankex down by 0.65% and IT down by 0.52% were the top losing sectoral indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.49%, NTPC up by 1.73%, Power Grid up by 1.45%, Bajaj Finserv up by 1.12% and Bajaj Finance up by 1.04%. On the flip side, Tata Steel down by 2.74%, Sun Pharma down by 2.08%, ICICI Bank down by 2.08%, Tech Mahindra down by 1.97% and SBI down by 1.40% were the top losers on the Sensex.

Meanwhile, expressing need to take measures to limit the spillover of the price shocks to the rest of the economy, RBI Monetary Policy Committee (MPC) member Shashanka Bhide has said that the high inflation rate in the last three quarters is mainly a consequence of the exogenous price shocks, and addressing the issue will require coordinated policy effort, monetary policy and other economic policies.

RBI MPC member further said the inflationary pressures are high and it certainly is a test for India's inflation targeting framework. He also noted that the high inflation rate in Q2 FY2022-23 follows high inflation in the previous two quarters, adding that high fuel and food prices and their spillover to other sectors have sustained the high inflation rate.

Besides, Bhide said that the present global macroeconomic environment is challenging in terms of inflationary pressures and growth, but with its diverse economic base and prudent policies, India should be able to meet these challenges. Bhide also said the monetary policy tightening by the RBI aims to bring down the inflationary pressures as high inflation adversely affects consumption and investment demand.

The CNX Nifty is currently trading at 17761.45, up by 24.50 points or 0.14% after trading in a range of 17746.65 and 17838.90. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Apollo Hospitals Enterprise up by 2.60%, Reliance Industries up by 2.44%, ONGC up by 2.43%, NTPC up by 1.70% and Bajaj Auto up by 1.47%. On the flip side, Tata Steel down by 2.74%, Hindalco Industries down by 2.44%, Sun Pharma down by 2.13%, JSW Steel down by 2.13% and Tech Mahindra down by 2.10% were the top losers.

Asian markets were trading mostly in red; KOSPI fell 20.38 points or 0.89% to 2,268.40, Shanghai Composite declined 71.07 points or 2.38% to 2,911.83, Jakarta Composite lost 63.77 points or 0.9% to 7,027.99, Taiwan Weighted dropped 137.95 points or 1.07% to 12,788.42, Nikkei 225 slipped 240.04 points or 0.88% to 27,105.20 and Hang Seng decreased 601.73 points or 3.9% to 14,826.21, while Straits Times advanced 48.42 points or 1.61% to 3,063.66.