Markets trade firm in early deals; Sensex reclaims 62,100 mark

Indian equity benchmarks extended their previous session’s gains with optimistic start on Tuesday tracking overnight gains on wall street. Domestic indices are trading firm in early deals on account of value buying. Stocks from counters such as Utilities, Power and Oil & Gas are buzzing on the session. Foreign fund inflows also aided to the markets. Foreign institutional investors (FIIs) bought shares worth Rs 922.89 crore on May 22, provisional data from the National Stock Exchange showed. Traders took note of Reserve Bank of India (RBI) governor Shaktikanta Das’ statement that the central bank’s announcement of withdrawal of Rs 2,000 notes will have very marginal impact on the economy because it constitutes only 10.8 per cent of the currency in circulation. 

On the global front, Asian markets are trading mixed as traders remain cautious and reluctant to make significant moves while they await additional news on US debt ceiling negotiations after talks broke down last week. Traders also digested comments from a few US Fed officials and assessed the outlook for interest rates. 

Back home, think tank GTRI in a report said that the government should not extend fiscal support under the production-linked incentive scheme (PLI) to small firm-dominated products like leather shoes and handicraft as the move may shift business away from those enterprises. In stock specific development, PB Fintech rallied after narrowing its quarterly net loss. Indiabulls Housing Finance declined on reporting a 14 percent fall in its Q4 net profit.

The BSE Sensex is currently trading at 62170.37, up by 206.69 points or 0.33% after trading in a range of 62061.24 and 62206.62. 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 0.37%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Utilities up by 1.55%, Power up by 1.49%, Oil & Gas up by 0.89%, IT up by 0.84% and TECK up by 0.73%, while Consumer Durables down by 0.18%, Realty down by 0.16% and Capital Goods down by 0.05% were the few losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.39%, Indusind Bank up by 1.06%, Bajaj Finance up by 1.02%, HCL Technologies up by 0.93% and Tech Mahindra up by 0.89%. On the flip side, Kotak Mahindra Bank down by 0.57%, Titan Company down by 0.48%, Mahindra & Mahindra down by 0.42%, Larsen & Toubro down by 0.30% and Sun Pharma down by 0.19% were the top losers.

Meanwhile, a Reserve Bank of India (RBI) article has said that India’s growth in the April-June quarter is likely to be driven by private consumption, supported by reviving rural demand, and renewed buoyancy in manufacturing. It said the global economy is transfixed in the cross-currents of slowing growth and high inflation, and an uneasy calm prevails in the global financial markets as they await clearer signals from policy authorities on banking regulation and supervision, and contours of deposit insurance.

The article on ‘State of the Economy’ stated that in April and the first half of May 2023, domestic economic conditions have sustained the quickening of momentum seen in the last quarter of 2022-23. Headline inflation eased below 5 per cent in April 2023, for the first time since November 2021. It further said corporate earnings are beating consensus expectations, with banking and financial sectors posting strong revenue performance, aided by robust credit growth.

The article has been authored by a team led by RBI Deputy Governor Michael Debabrata Patra. The central bank, however, said the views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India. The article further said retail inflation (consumer price index) print for April 2023 indicates that momentum is turning out to be softer than anticipated on account of a fall in wheat prices, the fifth consecutive monthly decline in prices of oils and fats and the third consecutive monthly decline in the prices of eggs.

It said the prices of vegetables and fruits are also weathering the summer heat better and their momentum is lower than their historical record for this time of the year. Kerosene prices are on the decline and importantly, core inflation - CPI excluding food and fuel - is treading on softer momentum (seasonally adjusted) relative to the persistent elevation over the past 10 months. Rice prices could see a significant correction if sales from buffer stocks, which are three times larger than the norm, are undertaken.

The CNX Nifty is currently trading at 18393.35, up by 78.95 points or 0.43% after trading in a range of 18349.75 and 18409.75. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 13.26%, Adani Ports & SEZ up by 4.23%, BPCL up by 1.94%, Britannia Industries up by 1.58% and Divi's Lab up by 1.47%. On the flip side, Apollo Hospital down by 0.96%, Kotak Mahindra Bank down by 0.66%, Grasim Industries down by 0.51%, SBI Life Insurance down by 0.48% and Titan Company down by 0.47% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 155.6 points or 0.5% to 30,931.22, Hang Seng declined 114.58 points or 0.59% to 19,563.59, Taiwan Weighted lost 23.53 points or 0.15% to 16,157.36 and Shanghai Composite weakened 19.11 points or 0.58% to 3,277.36. On the other hand, Straits Times rose 11.12 points or 0.35% to 3,222.21, KOSPI increased 15.06 points or 0.59% to 2,572.14 and Jakarta Composite gained 24.67 points or 0.37% to 6,754.32.