Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty holding notable gains, despite weak cues from other Asian markets. Sentiments remained optimistic, as the Finance Ministry said that stellar macroeconomic management in the midst of unprecedented global challenges has put India on a quicker recovery path than has been the case in other nations. Monthly Economic Review for May and Annual Review of 2023 stated that investments in supply-side infrastructure have raised the possibility of India enjoying sustained economic growth longer than it has been able to do in several decades. Besides, the market capitalisation of BSE-listed firms hit a lifetime peak of Rs 301.10 lakh crore in morning trade on Thursday, driven by a positive trend in domestic equities. 

On the global front, Asian markets were trading mostly in red, after Singapore's retail sales growth eased further in May. The data from the Department of Statistics showed that retail sales climbed 1.8 percent year-over-year in May, slower than the 3.7 percent gain in April. Excluding motor vehicles, retail sales also grew 1.8 percent yearly in May after a 4.3 percent increase in the preceding month.

Back home, on the sectoral front, auto industry stocks were in watch, as automobile dealers body Federation of Automobile Dealers Associations (FADA) in its latest report has showed that domestic automobile retail sales rose 10 per cent in June to 18,63,868 units from 17,01,105 units in the year-ago period, driven by sales growth across various segments, including passenger vehicles and two-wheelers.

The BSE Sensex is currently trading at 65634.91, up by 188.87 points or 0.29% after trading in a range of 65328.29 and 65693.09. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Realty up by 2.57%, Oil & Gas up by 1.80%, Utilities up by 1.61%, Energy up by 1.56% and Power up by 1.36%, while IT down by 0.30%, FMCG down by 0.28%, TECK down by 0.08% and Metal down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation of India up by 1.76%, Reliance Industries up by 1.39%, NTPC up by 1.37%, Bharti Airtel up by 1.21% and Tata Motors up by 1.13%. On the flip side, Maruti Suzuki down by 1.63%, Bajaj Finance down by 1.26%, Indusind Bank down by 1.06%, HCL Technologies down by 0.79% and Tech Mahindra down by 0.76% were the top losers.

Meanwhile, Reserve Bank of India (RBI)-appointed committee has suggested a host of short-term and long-term measures for internationalisation of Indian rupee, including efforts for inclusion of the Indian currency in IMF’s Special Drawing Rights (SDR) basket. The Inter Departmental Group (IDG) headed by RBI executive director R S Ratho in its report said that internationalisation is a process rather than an event, with continuous efforts to build upon all the initiatives that have been taken in the past. SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. It is a potential claim on the freely usable currencies of IMF members. As such, SDRs can provide a country with liquidity. A basket of currencies defines the SDR: the US dollar, euro, Chinese yuan, Japanese yen, and the British pound.

Suggesting short-term measures, the panel said there is a need to design a template and adopt a standardised approach for examining the proposals on bilateral and multilateral trade arrangements for invoicing, settlement and payment in INR and local currencies and encourage opening of INR accounts for non-residents (other than nostro accounts of overseas banks) both in India and outside India. It also recommended integrating Indian payment systems with other countries for cross-border transactions and strengthening financial markets by fostering a global 24×5 INR market and promoting India as the hub for INR transactions and price discovery.

It further said there is also a need for recalibrating the FPI regime and rationalizing/harmonizing the extant Know Your Customer (KYC) guidelines and provide equitable incentives to exporters for INR trade settlement. With regard to medium-term strategy, it said there is a need to review taxes on Masala bonds and international use of Real Time Gross Settlement (RTGS) for cross-border trade transactions and inclusion of INR as a direct settlement currency in the Continuous Linked Settlement (CLS) system.

The CNX Nifty is currently trading at 19451.90, up by 53.40 points or 0.28% after trading in a range of 19373.00 and 19472.50. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.80%, BPCL up by 2.10%, Power Grid Corporation of India up by 1.76%, Mahindra & Mahindra up by 1.49% and Britannia up by 1.41%. On the flip side, Eicher Motors down by 2.21%, Maruti Suzuki down by 1.66%, Bajaj Finance down by 1.24%, Indusind Bank down by 1.11% and HDFC Life Insurance down by 1.01% were the top losers. 

Asian markets were trading mostly in red; Hang Seng declined 573 points or 3.09% to 18,537.38, Nikkei 225 slipped 565.68 points or 1.73% to 32,773.02, Taiwan Weighted lost 294.26 points or 1.76% to 16,762.17, Straits Times fell 30.68 points or 0.97% to 3,154.70, KOSPI dropped 22.71 points or 0.89% to 2,556.29 and Shanghai Composite weakened 19.93 points or 0.62% to 3,203.02, while Jakarta Composite gained 5.77 points or 0.09% to 6,724.75.