Sensex, Nifty remain under bulls grip

Bulls held their tight grip over the Dalal Street, with Sensex and Nifty holding strong gains of 619.24 and 165.50 points respectively, on the back of positive cues from other Asian markets along with heavy buying at IT, TECK and Realty stocks. Sentiments remained optimistic, as investment in the domestic capital markets through participatory notes rose to Rs 1.04 lakh crore in May-end, the highest level in over five years, fuelled by the resilience of the Indian economy. This includes the value of P-note investments in Indian equity, debt, and hybrid securities. Adding relief among traders, the Department of Expenditure, Ministry of Finance, has released an amount of Rs 7,532 crore to 22 State Governments for the respective State Disaster Response Funds (SDRF), in the wake of heavy rains across the country. The amount has been released as per the recommendations of the Ministry of Home Affairs.  

On the global front, Asian markets were trading mostly in green, after South Korea's central bank left its benchmark rate unchanged for the fourth straight session and pledged to retain the restrictive stance for a considerable time. The Monetary Policy Board of the Bank of Korea, governed by Rhee Chang-yong, unanimously voted to hold the Base Rate at 3.50 percent, as expected. The central bank has hiked its policy rate by a total 300 basis points since August 2021, taking it to the highest level since 2008.

The BSE Sensex is currently trading at 66013.14, up by 619.24 points or 0.95% after trading in a range of 65605.88 and 66064.21. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.27%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were IT up by 2.57%, TECK up by 2.22%, Realty up by 1.69%, Metal up by 0.96% and Bankex up by 0.90%, while Power down by 0.93%, Utilities down by 0.92%, PSU down by 0.16%, Oil & Gas down by 0.11% and Healthcare down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.12%, TCS up by 3.06%, Tech Mahindra up by 2.30%, Bajaj Finserv up by 1.64% and Wipro up by 1.58%. On the flip side, Power Grid Corporation of India down by 2.44%, Maruti Suzuki down by 0.93%, NTPC down by 0.63%, Nestle down by 0.49% and Sun Pharma down by 0.33% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has maintained its domestic tyre demand growth forecast at 6-8% for FY2024 on the back of favourable demand from the original equipment manufacturer (OEM) segment and expected revival in replacements. An improved product mix and range-bound input costs are expected to enhance the margins by 200-300 bps in FY24. 

According to the report, the OEM segment is expected to grow by 7-9% YoY in FY2024 on the back of favourable prospects for most of the product categories. Easing of supply-related headwinds, preference for personal mobility, and rising disposable income of consumers are likely to support passenger vehicle (PV) demand. It stated that Commercial Vehicles (CV) demand continues to be supported by infrastructure and construction activities, although some sluggishness was seen in Q1 with pre-buying ahead of BS-6 2.0 emission norms transition. Demand recovery in the two-wheelers segment has been gradual, and the momentum in the next few quarters will depend on the monsoon performance.

ICRA expects mid-single-digit growth in the replacement segment in FY2024. Following two years of pent-up demand and an increase in prices, volume growth is likely to witness some stabilisation in FY2024. It noted that the demand was subdued to some extent in the last 2-3 months, although the same is likely to recover with improving urban and rural sentiments. However, it said the impact of an unfavourable monsoon distribution and El Nino occurrence on rural demand will remain under focus. Tyre export volumes contracted by 7% YoY in FY2023 owing to reduced demand from key markets on the back of economic slowdown and inflationary pressure. ICRA expects the export demand to remain subdued for the next couple of quarters.

The CNX Nifty is currently trading at 19549.80, up by 165.50 points or 0.85% after trading in a range of 19449.35 and 19567.00. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.15%, TCS up by 3.12%, Hindalco up by 3.04%, SBI Life Insurance up by 2.41% and Tech Mahindra up by 2.27%. On the flip side, Power Grid Corporation of India down by 2.34%, Coal India down by 1.28%, Eicher Motors down by 1.02%, Maruti Suzuki down by 0.90% and UPL down by 0.75% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 488.51 points or 2.52% to 19,349.46, Nikkei 225 surged 475.4 points or 1.47% to 32,419.33, Taiwan Weighted added 99.37 points or 0.58% to 17,061.40, Straits Times rose 66.41 points or 2.05% to 3,241.77, Shanghai Composite strengthened 38.8 points or 1.2% to 3,234.93 and KOSPI increased 16.51 points or 0.64% to 2,591.23, while Jakarta Composite plunged 15.8 points or 0.23% to 6,792.41.