Indices trade higher with marginal gains in early deals

Indian markets made positive start tracking gains in Asian counterparts as traders reacted positively to raising optimism about the health of the world's second largest economy after data showed Chinese manufacturing activity unexpectedly expanded in August. Data showing an increase in the unemployment rate in the U.S. has also added to optimism the Federal Reserve will leave interest rates unchanged later this month. Domestic indices are trading higher with marginal gains in early deals as healthy buying in Metal and Realty counters aided sentiments. Foreign fund inflows also boosted markets as foreign institutional investors (FII) purchased shares worth net Rs 487.94 crore on September 1. Traders took encouragement as Reserve Bank governor Shaktikanta Das said the central bank expects retail inflation to start declining from this month. 

However, upside remained capped as some cautiousness prevailed in the markets after latest data by the Reserve Bank of India (RBI) showed India's foreign exchange reserves are down by $30 million at $594.85 billion for the week ending August 25. In stock specific development, RVNL jumped after the company won a Rs 282 crore order from Madhya Gujarat Vij (MGVCL) for full Turnkey contract for development of distribution infrastructure work for loss reduction at Dahod.

The BSE Sensex is currently trading at 65475.50, up by 88.34 points or 0.14% after trading in a range of 65436.45 and 65630.85. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.53%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Metal up by 2.66%, Realty up by 1.09%, PSU up by 0.88%, Industrials up by 0.72% and Capital Goods up by 0.66%, while Consumer Durables down by 0.12%, Telecom down by 0.11%, FMCG down by 0.04%, Bankex down by 0.03% and TECK down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.70%, Ultratech Cement up by 2.14%, JSW Steel up by 1.77%, Larsen & Toubro up by 0.93% and Tech Mahindra up by 0.62%. On the flip side, Asian Paints down by 0.63%, ICICI Bank down by 0.44%, Power Grid down by 0.42%, Sun Pharma down by 0.39% and Nestle down by 0.37% were the top losers.

Meanwhile, citing a fall in the prices of vegetables like tomatoes, restrictions imposed on the export of non-basmati rice and cut in the prices of domestic LPG cylinders, the Reserve Bank of India (RBI) Governor Shaktikanta Das expressed optimism over the India’s inflation scenario and said that the central bank expects inflation to moderate from September onwards.

He said ‘August inflation will be again very high, but we expect from September onwards inflation to go down’. He said that the prices of tomatoes have already fallen and retail prices of other vegetables are also expected to come down from this month. He noted the government has taken several steps to ensure the supply of tomatoes and other items of common need to the people at affordable prices.

He asserted that despite all the global challenges, India is among the fastest-growing major economies in the world. He added the position of Indian banks is strong and stable due to strong regulatory measures, ‘but the domestic financial world always needs to be vigilant’. He said ‘You must have seen the failure of some banks in the US recently and big banks like Credit Suisse in Switzerland. But this global turmoil had no impact on India’.

Das also said that due to the promotion of digital payments, the number of transactions through UPI in the country crossed 10 billion in August. The RBI Governor said efforts are being made to promote payments through feature phones in the country so that even those people in remote areas who do not have smartphones and where there is a problem with mobile networks can take advantage of this facility.

The CNX Nifty is currently trading at 19468.75, up by 33.45 points or 0.17% after trading in a range of 19435.30 and 19526.80. There were 27 stocks advancing against 23 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tata Steel up by 3.66%, Hindalco up by 3.14%, Coal India up by 2.91%, Ultratech Cement up by 2.13% and JSW Steel up by 1.66%. On the flip side, Britannia Industries down by 0.65%, Bajaj Auto down by 0.59%, Asian Paints down by 0.51%, Power Grid down by 0.50% and ICICI Bank down by 0.49% were the top losers.

All Asian markets are trading higher; Hang Seng advanced 469.29 points or 2.55% to 18,851.35, Nikkei 225 surged 155.01 points or 0.47% to 32,865.63, Taiwan Weighted added 115.95 points or 0.7% to 16,760.89, Shanghai Composite strengthened 35.13 points or 1.11% to 3,168.38, Jakarta Composite gained 16 points or 0.23% to 6,993.65, KOSPI increased 10.11 points or 0.39% to 2,573.82 and Straits Times was up by 6.14 points or 0.19% to 3,239.44.