Domestic indices extend opening gains to trade firm; Nifty over 19,550 mark

Indian equity benchmarks made optimistic start on Thursday following broadly positive cues from global peers and after the Indian Space Research Organisation’s (Isro) Chandrayaan-3 mission made a successful soft landing on the lunar surface, making the country the first one to land on the south polar region (dark side) of the Moon. Domestic equity indices soon extend their northward journey are trading firm with gains of 0.70% each in early deals on account of value buying. Sentiments got boost after Reserve Bank of India (RBI) Governor Shaktikanta Das said that vegetable rates may ease from September, led by tomato prices, which have started showing signs of correction on the back of increased supply. Also, foreign fund inflows aided sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) bought shares worth net Rs 614.32 crore on August 23. Besides, rupee opened higher for the third session in a row to hit over a three-week high against the US dollar.

On the global front, all the Asian markets are trading higher led by technology stocks after major chipmaker Nvidia Corp reported stronger-than-expected quarterly profits. Besides, the first reading from Japan's manufacturing PMI for August increased to 49.7 from 49.6. While Service PMI rose from 53.8 to 54.3 over the same period. 

Back home, sugar stocks are in focus with a private report that India is expected to ban mills from exporting sugar in the next season beginning October, halting shipments for the first time in seven years, as a lack of rain has cut cane yields. In stock specific development, Bandhan Bank gained after announcing its foray into co-lending business.

The BSE Sensex is currently trading at 65889.35, up by 456.05 points or 0.70% after trading in a range of 65645.56 and 65910.03. There were 30 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 0.80%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Power up by 1.21%, Utilities up by 1.20%, Capital Goods up by 1.20%, Realty up by 1.11% and Industrials up by 1.06%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Ultratech Cement up by 1.69%, Larsen & Toubro up by 1.57%, ICICI Bank up by 1.42%, Bajaj Finserv up by 1.36% and Indusind Bank up by 1.21%. On the flip side, JIO Financial down by 4.99% was the sole loser.

Meanwhile, expressing some cautiousness over the India’s inflation situation, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said the frequent food price spikes pose a risk to anchoring of inflation expectations, which has been underway since September 2022, and called for timely supply side measures to limit such shocks. He added that vegetable price shocks are short term in nature and the monetary policy can wait for the ‘dissipation’ of the first-round effects of the current spate of shocks. However, he said the RBI will be on guard to ensure that second order effects in the form of generalisation and persistence are not allowed to take hold.

He noted ‘the role of continued and timely supply side interventions assumes criticality in limiting the severity and duration of such shocks’. He also reiterated that the RBI will remain firmly focused on aligning inflation to the target of 4 per cent and the interest rates are likely to stay elevated in the country for long. He said the spike in vegetable prices in July is starting to see a correction, led by tomato prices, pointing out that new arrivals are already softening prices. He also welcomed the ‘proactive supply management’ in the case of onions. He expects an appreciable slowdown in vegetable inflation from September.

On the macroeconomic front, Das said India's financial sector continues to be resilient and healthy but underlined that there is no room to be complacent. Forex reserves of over $600 billion present a strong umbrella against any event like that of a cyclical capital outflows. He added it was this ‘umbrella’ which led to an orderly depreciation of the rupee and ensured that the domestic currency was less impacted when compared to global peers after the start of the Ukraine invasion by Russia.

On the manufacturing front, he said the share of it has remained stagnant at about 18 per cent of GDP and India has the potential to capitalise on emerging areas such as aerospace and defence, low-carbon technologies, electric vehicles and semiconductors. He said improving the labour force participation rate, especially of women, is critical to realise the full potential on the demographics front, and added that there is a need to invest in education, skill development, and healthcare. The time is now ripe for targeted development of startups in high-tech domains such as quantum computing, small modular reactors, AI-based defence equipment, biotechnology, rare earths extraction, battery technology, oceanography and space exploration.

The CNX Nifty is currently trading at 19579.80, up by 135.80 points or 0.70% after trading in a range of 19509.50 and 19583.35. There were 49 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 2.56%, Adani Ports & SEZ up by 1.81%, Ultratech Cement up by 1.65%, Larsen & Toubro up by 1.52% and Indusind Bank up by 1.50%. On the flip side, JIO Financial down by 4.99% and Eicher Motors down by 0.03% were the only losers.

All Asian markets are trading higher; Hang Seng advanced 329.89 points or 1.81% to 18,175.81, Nikkei 225 surged 143.55 points or 0.45% to 32,153.81, Taiwan Weighted added 125.25 points or 0.75% to 16,702.15, KOSPI increased 24.57 points or 0.97% to 2,530.07, Shanghai Composite strengthened 14.48 points or 0.47% to 3,092.88, Straits Times rose 8.27 points or 0.26% to 3,182.45 and Jakarta Composite was up by 1.69 points or 0.02% to 6,923.10.