Domestic indices trade in fine-fettle; Nifty above 18,600 mark

Indian equity benchmarks extended their previous session’s northward journey with gap-up opening on Monday taking positive cues from Wall Street and firm trade in Asian counterparts as traders react positively to the resolution of the U.S. debt ceiling crisis after it was signed into law by US President Joe Biden. Traders also reacted to solid U.S. employment data and easing fears of recession. Domestic markets are trading in fine-fettle in early deals with gains of around half a percent each on account of value buying coupled with continued FPI buying. Foreign Portfolio Investors (FPIs) pumped in Rs 43,838 crore in Indian equities in May, the highest level in nine months, supported by strong macroeconomic fundamentals, and reasonable valuations. Sensex and Nifty are trading above their crucial levels of 62,800 and 18,600 levels, respectively.  Investors’ focus now shifting towards the RBI policy meeting due this week, with most of the market participants expecting policy rates to remain unchanged.

Sentiments got a boost as CII President R Dinesh said private sector investment is set to witness a significant increase, as capacity utilisation in several key sectors has already crossed 80 per cent and economic growth is estimated to be 6.7 per cent in the current financial year. In stock specific development, Indo Rama Synthetics shoot up after the company's wholly-owned subsidiary started commercial production of Bottle grade PET resins from its new plant in Maharashtra.

The BSE Sensex is currently trading at 62875.45, up by 328.34 points or 0.52% after trading in a range of 62751.72 and 62915.09. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.34%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Utilities up by 1.00%, Capital Goods up by 0.89%, Industrials up by 0.89%, Power up by 0.84% and Auto up by 0.83%, while Realty down by 0.16% and Metal down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.22%, Mahindra & Mahindra up by 1.76%, ICICI Bank up by 1.17%, Maruti Suzuki up by 1.09% and Tata Motors up by 1.04%. On the flip side, Tech Mahindra down by 0.73%, Asian Paints down by 0.59%, Hindustan Unilever down by 0.49%, Indusind Bank down by 0.15% and Titan Company down by 0.12% were the top losers.

Meanwhile, President of Confederation of Indian Industry (CII) R Dinesh has said private sector investment is set to witness a significant increase, as capacity utilisation in several key sectors has already crossed 80 per cent and economic growth is estimated to be 6.7 per cent in the current financial year. He also exuded confidence that the Reserve Bank of India (RBI) will maintain status quo on interest rate in the next bi-monthly monetary policy to be announced later this week. Citing the CII's annual CEOs survey, he said all sectors have crossed 75 per cent capacity utilisation and the figure was 80 per cent in key sectors like cement, steel, chemicals and machinery. He said ‘we are at the cusp of where private sector capex will see a significant increase happening’ and added that as per the CMIE data investment commitment of Rs 25.7 lakh crore was made last year, as compared to Rs 14.3 lakh crore a year ago.

Regarding the pressure points, Dinesh said at the global level the world economy itself is facing issues and at present no other country in the world is getting near to their normal growth rates. He said ‘from the domestic side, I think the only big worry for us is the El Nino effect on the monsoon’, and added that however, El Nino does not necessarily mean that there will be a low rate of growth. After a rare triple-dip La Nina, there is a probability of the warming of the equatorial Pacific Ocean in the coming months, called the El Nino phenomenon, that is associated with higher global temperatures, and it is likely to impact monsoon in India. La Nina refers to the phase of cooling of the sea-surface temperatures than normal.

Further, he said that the continued focus of the government on increasing spending to develop modern infrastructure is a ‘big blessing’ in ensuring that the economy grows and is also building a virtuous cycle. He said the other big advantage is good balance sheets of corporates and banks, and added ‘that gives us the comfort that overall we are in a very resilient position’. The government can not do much to address the global headwinds and the monsoon is also beyond their control. About possible impact of global economic uncertainties on India's exports, he said despite all odds, the country's outbound shipments are recording a healthy growth rate.

The CNX Nifty is currently trading at 18616.90, up by 82.80 points or 0.45% after trading in a range of 18582.80 and 18636.15. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.19%, Grasim Industries up by 1.79%, Mahindra & Mahindra up by 1.74%, Maruti Suzuki up by 1.20% and Power Grid up by 1.13%. On the flip side, Divi's Lab down by 1.41%, Tech Mahindra down by 0.83%, BPCL down by 0.82%, Asian Paints down by 0.65% and Hindustan Unilever down by 0.47% were the top losers.

All Asian markets are trading higher; Nikkei 225 surged 541.67 points or 1.69% to 32,065.89, Hang Seng advanced 119.08 points or 0.62% to 19,069.02, Taiwan Weighted strengthened 70.49 points or 0.42% to 16,777.40, Straits Times rose 22.39 points or 0.7% to 3,188.69, KOSPI increased 17.01 points or 0.65% to 2,618.37, Shanghai Composite added 2.74 points or 0.08% to 3,232.81 and Jakarta Composite was up by 2.74 points or 0.04% to 6,636.00.