Sensex, Nifty hit fresh record highs in early deals amid strong global cues

Indian equity benchmarks made optimistic start and scaled fresh all-time highs in early deals on Thursday as global rally continued across markets. Nifty surpassed 21,750 mark for the first time, and the Sensex is trading near 72,400 level. Markets are trading firm with gains of around half a percent each amid foreign fund inflows. Provisional data from the NSE showed foreign institutional investors (FIIs) turned net buyers for the first time in the last seven consecutive sessions, buying shares worth Rs 2,926.05 crore on December 27. Traders took encouragement as a report released by the Centre for Economics and Business Research (CEBR) showed that India is set to become the world's third-largest economy by 2032, and will eventually surpass China and the United States to become the world's largest economic superpower by the end of this century. It added India will sustain robust economic growth, averaging 6.5 percent from 2024 to 2028. 

On the global front, most of the Asian markets are trading higher, mirroring the broadly positive cues from global markets overnight, as optimism over the outlook for interest rates into the New Year generated renewed buying interest. There is expectation the US Fed will cut interest rates in March 2024.

Back home, shares of Banks and non-banking financial companies (NBFCs) are in focus after RBI in its Trend & Progress Report for 2022-23 stated that the both the financial institutions remained sound and resilient with banks’ gross non-performing assets (GNPAs) at a decade-low. In stock specific development, HUDCO rallied on signing financing deal of Rs 14500 crore with Gujarat govt. However, Zomato traded under pressure as it received a show cause notice from GST authorities amounting to a tax liability of Rs 401.7 crore.

The BSE Sensex is currently trading at 72383.90, up by 345.47 points or 0.48% after trading in a range of 72200.24 and 72406.75. 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 0.35%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were PSU up by 0.80%, Power up by 0.65%, Bankex up by 0.63%, Metal up by 0.60% and Utilities up by 0.48%, while Realty down by 0.08% was the sole losing index on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.53%, NTPC up by 1.23%, Mahindra & Mahindra up by 1.05%, Nestle up by 0.92% and JSW Steel up by 0.87%. On the flip side, Asian Paints down by 0.30%, Ultratech Cement down by 0.04% and Larsen & Toubro down by 0.01% were the few losers.

Meanwhile, the Department of Financial Services Secretary Vivek Joshi has said that India Inc needs to think ‘big and bold’, and kickstart a new private sector investment cycle. He also asked banks to include stress testing of cyber risks as part of the risk assessment framework. It can be noted that the private sector has been reluctant to invest despite tailwinds like robust economic growth, while some experts also point out to capacity utilizations touching newer highs. In the recent past, bankers have spoken about some greenshoots in investments which are generating loan demand for them.

Joshi said there is a need for a new cycle of private investment, and added that only the central and state governments have been investing in the recent past for infrastructure building. He said ‘The need of the hour is to think big, and think bold by ensuring that execution remains timely and robust’. He said the government has been helping with the right policy mix, including tweaks to the bankruptcy laws, forming a bad bank to take care of sour assets, having a dedicated institution to finance projects etc, and added that India's economic outlook is ‘realistically optimistic’.

Joshi also asked banks to ‘reassess’ their approach, and consider looking at project conceptualization and structuring in case of potential investors. He said banks, entrepreneurs and the government are key cogs for ensuring that private capital expenditure happens, and added that there is a need for all the stakeholders to pull in a single direction. It is equally important that small ticket loans for employment generation grow even faster, he said, reminding that deepening of financial inclusion and unlocking potential of citizens is a ‘national priority and moral imperative’.

The bureaucrat listed out a slew of schemes which are being executed for bettering the conditions of the marginalized people by the state-run lenders, and added that the government will ‘certainly look forward to leadership and initiative from private banks in this direction’. Meanwhile, Joshi also stressed on the need to improve the security architecture at all the institutions involved in financial intermediations given the reliance on technology. He also asked players to up their guards against deepfakes, and ensure that such technologies are not used to dupe customers.

The CNX Nifty is currently trading at 21753.20, up by 98.45 points or 0.45% after trading in a range of 21699.75 and 21758.35. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 1.38%, Bajaj Finserv up by 1.29%, NTPC up by 1.29%, Hero MotoCorp up by 1.26% and Mahindra & Mahindra up by 0.95%. On the flip side, Dr. Reddy's Lab down by 0.47%, Asian Paints down by 0.44%, Bajaj Auto down by 0.20%, Britannia down by 0.15% and Grasim Industries down by 0.13% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 251.76 points or 1.51% to 16,876.60, Straits Times surged 49.79 points or 1.57% to 3,220.55, Jakarta Composite rose 37.78 points or 0.52% to 7,283.70, Shanghai Composite strengthened 32.4 points or 1.1% to 2,947.01, KOSPI increased 24.84 points or 0.95% to 2,638.34 and Taiwan Weighted was up by 6.88 points or 0.04% to 17,898.38, while Nikkei 225 slipped 146.87 points or 0.44% to 33,534.37.