Sensex, Nifty hit all-time highs in early deals on firm global cues

Indian equity benchmarks made gap-up opening on Wednesday tracking overnight gains on Wall Street as well as firm cues from Asian peers as traders reacted to the continued optimism over the outlook for interest rates following the US Fed's monetary policy announcement last week. Adding to the positive sentiment, San Francisco Fed President Mary Daly said interest rate cuts are likely to be appropriate next year because of an improvement in inflation. Domestic markets are trading in fine-fettle in early deals, with Sensex and Nifty hitting their all-time highs, supported by buying in IT and Teck stocks. 

Traders took encouragement as the finance ministry said tax reforms, a sharp hike in capital spending without weakening fiscal discipline and robust public digital infrastructure are among a raft of steps initiated by the Modi government that would help India emerge as a $5-trillion economy. Some support also came in as International Monetary Fund’s Executive Board said Indian economy is likely to log 6.3% growth in FY24 and FY25 on the back of macroeconomic and financial stability. 

On the sectoral front, financials are in focus after the Reserve Bank of India (RBI) tightened norms for banks and NBFC's investing in Alternate Investment Funds. In stock specific development, Deepak Nitrite traded higher as arm inked 15-year supply pact with Petronet LNG.

The BSE Sensex is currently trading at 71865.46, up by 428.27 points or 0.60% after trading in a range of 71647.66 and 71913.07. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.57%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were IT up by 1.46%, TECK up by 1.20%, Utilities up by 1.03%, FMCG up by 0.98% and Consumer Durables up by 0.97%, while Telecom down by 0.06% was the sole losing index on BSE.

The top gainers on the Sensex were TCS up by 1.91%, Wipro up by 1.74%, Infosys up by 1.53%, Bajaj Finserv up by 1.09% and Tech Mahindra up by 0.99%. On the flip side, Sun Pharma down by 0.27%, Tata Steel down by 0.15% and Axis Bank down by 0.04% were the few losers.

Meanwhile, the World Bank in its latest report ‘Migration and Development Brief’ has said that India saw the highest amount of remittance inflows in the world in 2023 at $125 billion, driven by several factors, including the country’s agreement with the UAE, for promoting the use of dirhams and rupees for bilateral trade. It added growth in remittances in India is expected to halve to 12.4 per cent in 2023 from a historic peak of 24.4 per cent in 2022. It said ‘Remittances are expected to increase by $14 billion and rise to $125 billion in 2023, increasing India’s share in South Asian remittances to 66 per cent in 2023 from 63 per cent in 2022’. 

India was followed by Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion). Economies where remittance inflows represent substantial shares of Gross Domestic Product (GDP) - highlighting the importance of remittances for funding current account and fiscal shortfalls - are Tajikistan (48 per cent), Tonga (41 per cent), Samoa (32 per cent), Lebanon (28 per cent), and Nicaragua (27 per cent). On India, the World Bank said the main contributing factors are declining inflation and strong labour markets in high-income source countries, which boosted remittances from highly skilled Indians in the US, the UK, and Singapore, which collectively account for 36 per cent of the total remittance flows to New Delhi.

The report said ‘Remittance flows to India were also boosted by higher flows from the GCC, especially the UAE, which accounts for 18 per cent of India’s total remittances and is the second-largest source of them after the US’. It further said remittance flows to India benefited particularly from its February 2023 agreement with the UAE for establishing a framework to promote the use of local currencies for cross-border transactions and cooperation for interlinking payment and messaging systems. The use of dirhams and rupees in cross-border transactions will be instrumental in channeling more remittances through formal channels. Remittances to low- and middle-income countries grew an estimated 3.8 per cent in 2023, a moderation from the high gains of the previous two years. It added of concern is the risk of decline in real income for migrants in 2024 in the face of global inflation and low growth prospects.

The CNX Nifty is currently trading at 21579.95, up by 126.85 points or 0.59% after trading in a range of 21525.15 and 21593.00. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were LTIMindtree up by 2.42%, TCS up by 1.76%, Tata Consumer Products up by 1.69%, Wipro up by 1.69% and Eicher Motors up by 1.55%. On the flip side, Sun Pharma down by 0.20%, Axis Bank down by 0.19%, Tata Steel down by 0.18%, UPL down by 0.13% and Coal India down by 0.04% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 539.04 points or 1.6% to 33,758.43, Hang Seng jumped 171.81 points or 1.03% to 16,676.81, Taiwan Weighted rose 46.71 points or 0.27% to 17,623.26, KOSPI increased 41.37 points or 1.59% to 2,609.92, Jakarta Composite added 36.71 points or 0.51% to 7,224.56 and Straits Times was up by 3.59 points or 0.12% to 3,120.21, while Shanghai Composite was down by 11.76 points or 0.4% to 2,920.63.