Bulls roar on Dalal Street; Sensex, Nifty open at record highs

Indian equity benchmarks extended previous session’s northward rally with strong opening and touched their all-time high levels on Friday on improved sentiment following robust economic data from the US. Markets are trading firm in early deals and IT and TECK counters leading the gainers on the BSE. Continued foreign fund inflows aided domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) net bought shares worth net Rs 12,350 crore on June 28. Sentiments got a boost with Reserve Bank Governor Shaktikanta Das’ statement that the Indian economy has made a solid recovery and is among the fastest-growing large economies despite heightened uncertainties and formidable headwinds. He said that financial stability is non-negotiable and all stakeholders in the financial system must work to preserve this at all times. Traders took note of report that increasing economic ties between India and the US would help boost the country’s exports to America. 

On the global front, Asian markets are trading mixed following the mixed cues from global markets overnight, as traders react to the results of the US Fed's annual bank stress test that showed large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession. Meanwhile, traders were also reacting to another batch of largely upbeat U.S. economic data, which further eased recession worries but also renewed concerns about the outlook for interest rates. Indonesia remains closed on account of Eid al-Adha.

Back home, the Ministry of Finance has extended the deadline to apply the proposed changes in Tax Collection at Source (TCS) rates from October 1. On the sectoral front, sugar sector stocks are buzzing as the Union Cabinet Committee on Economic Affairs hiked the fair and remunerative price (FRP) of sugarcane by Rs 10 per quintal to Rs 315 for the 2023-24 season that will start from October. In stock specific development, Multi Commodity Exchange plummeted after extending its license and maintenance contract with 63 Moons Technologies for six more months.

The BSE Sensex is currently trading at 64402.49, up by 487.07 points or 0.76% after trading in a range of 64068.44 and 64414.84. There were 26 stocks advancing against 3 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were IT up by 1.47%, TECK up by 1.20%, Consumer Durables up by 0.84%, Realty up by 0.75%, Auto up by 0.72%, while Telecom down by 0.37% and Metal down by 0.12% were the only losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.38%, Infosys up by 2.18%, Mahindra & Mahindra up by 2.16%, Asian Paints up by 1.64% and Indusind Bank up by 1.46%. On the flip side, Tata Steel down by 0.36%, Bharti Airtel down by 0.21% and ICICI Bank down by 0.12% were the few losers.

Meanwhile, despite heightened uncertainties and formidable headwinds, Reserve Bank of India (RBI) Governor Shaktikanta Das said that the Indian economy has made a solid recovery and is among the fastest-growing large economies. He said that financial stability is non-negotiable and all stakeholders in the financial system must work to preserve this at all times. In a foreword to Financial Stability Report (FSR), he said ‘the Reserve Bank and the other financial regulators remain steadfast in their commitment to safeguard financial stability in the face of potential and emerging challenges’. In this fragile global milieu, he said balancing the policy trade-offs, preserving macroeconomic and financial stability, shoring up confidence and supporting sustainable growth are top priorities for policymakers the world over. 

Over the last three years, he said the global economy has been navigating successive high-amplitude shocks: the COVID-19 pandemic waves; protracted geopolitical hostilities; rapid monetary policy tightening; and the recent banking turmoil. He further said economic fragmentation is threatening macroeconomic prospects, especially among emerging market and developing economies (EMDEs). Since the last issue of the FSR in December 2022, the global and Indian financial systems have charted somewhat different trajectories. The global financial system has been impacted by significant strains since early March 2023 from the banking turmoil in the US and Europe. Earlier this year, US-based Silicon Valley Bank and Signature Bank collapsed. It was followed by the bailout of UBS, the Switzerland’s largest bank, by Credit Suisse in March.

In contrast, he said the financial sector in India has been stable and resilient, as reflected in sustained growth in bank credit, low levels of non-performing assets and adequate capital and liquidity buffers. He said both banking and corporate sector balance sheets have been strengthened, engendering a ‘twin balance sheet advantage’ for growth, and added that the reach and depth of financial intermediation are being aided by technology and growing digitalisation, which provide new opportunities for growth and financial inclusion. As the recent banking turmoil in certain advanced economies (AEs) suggests, new risks have necessitated reassessment of global standards on financial sector regulations. He further said international cooperation and regulatory focus are also needed to tackle other challenges such as cyber risks and climate change.

The CNX Nifty is currently trading at 19102.95, up by 130.85 points or 0.69% after trading in a range of 19024.60 and 19108.20. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.44%, Mahindra & Mahindra up by 2.24%, Infosys up by 2.22%, Asian Paints up by 1.64% and Indusind Bank up by 1.48%. On the flip side, Adani Ports & SEZ down by 1.08%, Bajaj Auto down by 0.86%, HDFC Life Insurance down by 0.84%, Eicher Motors down by 0.48% and Tata Steel down by 0.40% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 224.64 points or 0.68% to 33,009.50, Taiwan Weighted lost 58.16 points or 0.34% to 16,884.14 and Straits Times was down by 0.11 points or 0% to 3,207.17. On the other hand, Shanghai Composite strengthened 24.89 points or 0.78% to 3,207.27, KOSPI increased 12.52 points or 0.49% to 2,562.54 and Hang Seng was up by 4.65 points or 0.02% to 18,939.01.