Markets trade in high spirit in early deals; Sensex nears 63K mark

Indian equity benchmarks magnified their previous session’s northward journey with gap-up opening on Monday as traders react positively to an apparent resolution to the U.S. debt ceiling crisis forged over the weekend to avoid a potentially disastrous default by the U.S. government. Domestic indices are trading firm with gains of over half a percent each in early deals on account of value buying. Sensex and Nifty are hovering above their crucial 62,900 and 18,600 marks, receptively. Foreign fund inflows also aided domestic sentiments. Foreign Portfolio Investors (FPIs) have pumped Rs 37,316 crore in Indian equities in May so far, primarily due to strong macroeconomic fundamentals and reasonable valuation of stocks. Besides, provisional data from the National Stock Exchange showed foreign institutional investors (FIIs) bought shares worth Rs 350.15 crore on May 26. Some optimism came in as World Economic Forum (WEF) President Borge Brende said India is expected to clock the highest growth among the world’s big economies this year and the country’s economy is witnessing the ‘famous snowball effect’ that will lead to more investments and more jobs. 

On the global front, most of the Asian markets are trading higher, following the broadly positive cues from global markets on Friday, with gains across all sectors as traders react to the news of an ‘agreement in principle’ reached on the US debt ceiling over the weekend. Meanwhile, South Korea market is closed for Vesak Day holiday. Back home, Chairman of the CII Committee on EXIM Sanjay Budhia has said economic recession in Germany is likely to impact India’s exports from various sectors like chemicals, machinery, apparel and electronics to the European nation. In stock specific development, ICICI Lombard General Insurance Company jumped as the ICICI Bank board has approved raising its stake in the company by 4 per cent in multiple transactions.

The BSE Sensex is currently trading at 62947.06, up by 445.37 points or 0.71% after trading in a range of 62801.54 and 63026.00. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.17%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were Bankex up by 0.88%, Metal up by 0.72%, Consumer Durables up by 0.65%, Telecom up by 0.59% and TECK up by 0.42%, while Oil & Gas down by 0.95%, Energy down by 0.50%, Healthcare down by 0.28% and PSU down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.07%, HDFC up by 1.69%, Bajaj Finserv up by 1.53%, Indusind Bank up by 1.44% and HDFC Bank up by 1.32%. On the flip side, Sun Pharma down by 1.71%, Power Grid down by 0.84% and HCL Technologies down by 0.29% were the few losers.

Meanwhile, just few days ahead of official release of the provisional estimate for the India's Gross Domestic Product (GDP) growth for the fourth quarter as well for the fiscal 2022-23, domestic rating agency Icra is eyeing GDP growth in January-March period of 2022-23 at 4.9 per cent, a modest step-up from the 4.4 per cent recorded in preceding quarters, driven by the services sector. The National Statistical Organisation (NSO) is scheduled to release the provisional estimate for the GDP data on May 31.

Icra estimates the services gross value added (GVA) year-on-year growth to have risen mildly to about 6.4 per cent in Q4 FY23 from 6.2 per cent in Q3 FY23. The YoY performance of nine of the 14 high frequency indicators of the services sector improved in Q4 FY23 relative to Q3 FY23, partly reflecting the robust demand for the contact-intensive segment, as well as the low base of Covid 3.0 for some sectors such as aviation.

The agency estimates the industrial GVA year-on-year growth to have improved to about 3.6 per cent in Q4 FY2023 from 2.4 per cent in Q3 FY2023, aided by an improvement in manufacturing, and mining and quarrying. It further said higher acreage, early sowing, healthy reservoir levels and improved availability of fertilisers augured well for the rabi output in 2023. However, unseasonal rains are likely to have dampened the yield of some crops. It estimates the agri GVA growth at 3.5 per cent for Q4 FY2023, a step down from the 3.7 per cent recorded in October-December quarter.

The CNX Nifty is currently trading at 18627.10, up by 127.75 points or 0.69% after trading in a range of 18592.90 and 18641.20. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.29%, SBI Life Insurance up by 2.53%, HDFC Life Insurance up by 1.77%, Indusind Bank up by 1.77% and HDFC up by 1.72%. On the flip side, ONGC down by 3.91%, Sun Pharma down by 1.63%, Power Grid down by 0.65%, Divi's Lab down by 0.57% and Grasim Industries down by 0.49% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 296.48 points or 0.95% to 31,212.79, Taiwan Weighted added 141.57 points or 0.85% to 16,646.62, Straits Times rose 5.72 points or 0.18% to 3,213.11 and Shanghai Composite was up by 4.84 points or 0.15% to 3,217.34. On the other hand, Jakarta Composite plunged 60.16 points or 0.91% to 6,626.84 and Hang Seng was down by 61.79 points or 0.33% to 18,685.13.