Post Session: Quick Review

Indian equity benchmarks started the new week on an optimistic note as traders took support with report that Moody’s affirmed India’s sovereign rating at ‘Baa3’ with a stable outlook. Though, key gauges traded with limited gains throughout the day. Buying in IT, Metal and Banking offered support to markets. All the sectoral indices on the BSE ended in green on Monday. The broader indices, the BSE Mid cap index and Small cap index ended with gains of over half percent each. 

Markets made cautious start following mixed cues from the Wall Street on Friday, as traders remain cautious and restrained from making any significant moves after upbeat US data raised fears the US Fed will hold interest rates higher for longer to control inflation. Further, indices gained some strength, as traders took support after Moody’s Investors Service affirmed India’s sovereign rating at ‘Baa3’ with stable outlook and said high growth will support a gradual increase in income levels, which will further contribute to economic strength. It expects India’s economic growth to outpace all other G20 economies through at least the next two years, driven by domestic demand. Markets continued to trade higher in afternoon session, as some support came after the government expects vegetable prices to start cooling off from next month with the advent of new crops in the market. Also, the Reserve Bank of India showed India’s foreign exchange reserves snapped a three-week losing streak and increased by $708 million to $602 billion in the week ended August 11. Finally, both Sensex and Nifty ended Monday’s session above their crucial 65,200 and 19,350 marks, respectively.

On the global front, European markets were trading higher after four sessions of losses, as energy stocks rose tracking global crude prices higher and Danish drugmaker Novo Nordisk led gains in healthcare stocks. Asian markets ended mixed following the mixed cues from Wall Street on Friday, as traders remain cautious and restrained from making any significant moves after upbeat US data raised fears the US Fed will hold interest rates higher for longer to control inflation. Back home, retail inflation for farm and rural workers inched up to 7.43 per cent and 7.26 per cent in July compared to 6.31 per cent and 6.16 per cent, respectively, in June this year, mainly due to higher prices of certain food items.

The BSE Sensex ended at 65,216.09, up by 267.43 points or 0.41% after trading in a range of 64,852.70 and 65,335.82. There were 25 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.87%, while Small cap index was up by 0.71%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 2.56%, Power up by 2.31%, Metal up by 1.19%, Capital Goods up by 1.09% and Realty was up by 1.03%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 2.74%, Bajaj Finance up by 2.70%, Indusind Bank up by 2.06%, Bharti Airtel up by 1.68% and NTPC up by 1.63%. On the flip side, Reliance Industries down by 1.50%, Mahindra & Mahindra down by 0.87%, Maruti Suzuki down by 0.41%, SBI down by 0.28% and Ultratech Cement down by 0.17% were the top losers. (Provisional)

Meanwhile, affirming India’s sovereign rating at ‘Baa3’ with a stable outlook, Moody’s Investors Service has said high growth will support a gradual increase in income levels, which will further contribute to economic strength. Baa3 is the lowest investment grade rating. It expects India’s economic growth to outpace all other G20 economies through at least the next two years, driven by domestic demand. 

It said although potential growth has come down in the past 7-10 years, the Indian economy is likely to continue to grow rapidly by international standards. It said ‘high GDP growth will contribute to gradually rising income levels and overall economic resilience. In turn, this will support gradual fiscal consolidation and government debt stabilization, albeit at high levels. In addition, the financial sector continues to strengthen, alleviating much of the economic and contingent liability risks that had previously driven downward rating pressure’.

Moody’s has affirmed the Government of India’s long-term local and foreign-currency issuer ratings and the local-currency senior unsecured rating at Baa3. It has also affirmed India’s other short-term local-currency rating at P-3. The outlook remains stable. The ratings are looked at by investors as a barometer of a country’s creditworthiness and affect borrowing costs.

The CNX Nifty ended at 19,393.60, up by 83.45 points or 0.43% after trading in a range of 19,296.30 and 19,425.95. There were 38 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finance up by 2.71%, Adani Ports up by 2.66%, Power Grid up by 2.57%, Adani Enterprises up by 2.42% and Hindalco up by 2.25%. On the flip side, Reliance Industries down by 1.44%, Mahindra & Mahindra down by 0.91%, Britannia down by 0.54%, SBI Life down by 0.30% and BPCL down by 0.24% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 52.13 points or 0.71% to 7,314.56, France’s CAC rose 90.79 points or 1.25% to 7,254.90 and Germany’s DAX was up by 130.66 points or 0.83% to 15,704.92.

Asian markets settled mostly higher on Monday, despite mixed cues from Wall Street last Friday ahead to the US Federal Reserve's summer conference for signs of whether the US Federal Reserve thinks inflation is under control or more interest rate hikes are needed to cool inflation. Although, Chinese shares declined as yuan tumbled after a smaller-than-expected rate cut from the People’s Bank of China disappointed markets.