Markets end higher for second consecutive day

Indian equity benchmarks ended higher for the second consecutive day on Wednesday, led by gains in Utilities, Power and Telecom stocks. After making a slightly positive start, markets soon gained some strength as traders took encouragement with the India Meteorological Department (IMD) stating that India’s stalled monsoon is likely to gain momentum in the next 3-4 days and could cover key rice, soybean, cotton and sugarcane growing regions in the southern, central and western states. Traders got some support as a labour bureau has said that retail inflation for farm workers and rural labourers eased to 5.99 per cent and 5.84 per cent, respectively, in May 2023. However, markets pared all the opening gains and traded lower in late morning deals, as some concern came with provisional data from the National Stock Exchange showing that foreign institutional investors (FII) sold shares worth Rs 1,942.62 crore on June 20. Some cautiousness also came as a private report said that though few fear a moderate rain deficit to impact inflation, an intense El Nino that severely disrupts the monsoon could push inflation up by 15-20 basis points by boosting food prices. 

But selling proved short-lived as markets once again moved to the green in afternoon deals, as some optimism came among traders with the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report showing that India created 1719998 new jobs in the month of April 2023. During 2022-23, EPFO has added 1.39 crore net members as compared to the net addition of 1.22 crore during 2021-22. Traders took a note of the World Economic Forum's annual Gender Gap Report, 2023, which said India has ranked at 127 out of 146 countries in terms of gender parity -- an improvement of eight places from last year. Meanwhile, the RBI said its recent instructions on ‘compromise settlements and technical write-offs’ have rationalised the existing regulatory guidance to banks and tightened some of the related provisions to ensure greater transparency.

On the global front, Asian markets settled mostly higher on Wednesday as investors awaited Federal Reserve chairman Jerome Powell's testimony before the House Financial Services Committee and the Senate Banking Committee. European markets were trading mostly in green, even as Official data showed that U.K. consumer prices logged a steady growth rather than a slowdown in May. Core inflation accelerated further, adding pressure on the Bank of England to raise the benchmark rate by half a percentage point.

Finally, the BSE Sensex rose 195.45 points or 0.31% to 63,523.15 and the CNX Nifty was up by 40.15 points or 0.21% to 18,856.85.   

The BSE Sensex touched high and low of 63,588.31 and 63,315.62, respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Utilities up by 1.19%, Power up by 1.08%, Telecom up by 0.81%, Oil & Gas up by 0.57% and Energy up by 0.53%, while Metal down by 0.94%, FMCG down by 0.46%, Realty down by 0.30%, Industrials down by 0.13% and Auto down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 3.68%, HDFC Bank up by 1.71%, HDFC up by 1.66%, Tech Mahindra up by 1.13% and TCS up by 0.94%. On the flip side, Mahindra & Mahindra down by 1.59%, ITC down by 1.29%, Indusind Bank down by 0.87%, Axis Bank down by 0.83% and Maruti Suzuki down by 0.62% were the top losers.

Meanwhile, a labour bureau has said that retail inflation for farm workers and rural labourers eased to 5.99 per cent and 5.84 per cent, respectively, in May 2023. Point-to-point rate of inflation based on the CPI-AL (consumer price index-agricultural labourers) and CPI-RL (rural labourers) stood at 6.50 per cent and 6.52 per cent respectively in April 2023 and 6.67 per cent and 7.00 per cent respectively during the corresponding month (May 2022) of the previous year.

It stated that food inflation stood at 6.31 per cent & 6.07 per cent in May 2023 compared to 6.67 per cent & 6.52 per cent respectively in April 2023 and 5.44 per cent & 5.51 per cent respectively during the corresponding month of the previous year. The All-India Consumer Price Index Number for Agricultural Labourers and Rural Labourers for the month of May 2023 increased by 6 & 5 points to stand at 1186 points and 1197 points respectively. The CPI-AL and CPI-RL were 1180 points and 1192 points respectively in April 2023.

The major contribution towards the rise in general index of Agricultural Labourers and Rural Labourers came from food group to the extent of 5.29 & 4.72 points respectively mainly due to increase in prices of rice, pulses, milk, meat goat, chillies dry, garlic, ginger, vegetables & fruits, etc. The rise/fall in index varied from State to State. In case of Agricultural Labourers, it recorded an increase of 2 to 17 points in 11 States and a decrease of 1 to 5 points in 8 States while it remained stationary for Himachal Pradesh State. Tamil Nadu with 1371 points topped the index table whereas Himachal Pradesh with 918 points stood at the bottom.

The CNX Nifty traded in a range of 18,875.90 and 18,794.85. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation up by 3.78%, ONGC up by 2.00%, Adani Ports & SEZ up by 1.94%, HDFC Bank up by 1.77% and HDFC up by 1.67%. On the flip side, JSW Steel down by 1.93%, Hindalco down by 1.74%, Divi's Lab down by 1.44%, Mahindra & Mahindra down by 1.43% and ITC down by 1.05% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 5.16 points or 0.07% to 7,574.47 and Germany’s DAX gained 27.32 points or 0.17% to 16,138.64, while France’s CAC fell 1.8 points or 0.02% to 7,292.37.

Asian markets settled mostly higher on Wednesday ahead of US Fed Chair's congressional testimony later in the day for clues to the outlook for monetary policy. Japanese shares gained after Japanese central bank’s April meeting minutes showed that most board members had no intention of altering the BoJ’s ultra-loose policy in the near-term. However, Chinese shares declined on concerns over a lack of additional stimulus measures from Beijing.