Domestic indices trade higher with marginal gains in early deals

Indian equity benchmarks made positive start on Saturday tracking overnight gains on Wall Street. Markets are conducting a normal trading session today, and will remain shut on Monday, January 22, after the Maharashtra government announced a holiday that day in connection with the consecration of the Ram Temple in Ayodhya. Domestic indices are trading higher with marginal gains in early deals. Broader indices BSE Mid & Small cap indices are outperforming larger peers with gains of over half a percent each. Some support came in as the Reserve Bank of India (RBI) said India’s forex reserves jumped $1.634 billion to $618.937 billion for the week ended January 12. Traders took note of a private report stating that digitization-led formalization has aided the fiscal math through tax buoyancy on one side and reducing wasteful expenditure (subsidy leakage) on the other. 

However, markets trimmed some of their gains amid foreign fund outflows. Foreign institutional investors (FIIs) sold shares worth Rs 3,689.68 crore on January 19, provisional data from the NSE showed. Some cautiousness also crept in with report that retail inflation for farm workers and rural labourers increased marginally to 7.71 per cent and 7.46 per cent in December compared to 7.37 per cent and 7.13 per cent, respectively, in November due to higher prices of certain food items. 

On the global front, the US markets ended significantly higher on Friday with the Dow and the S&P 500 set new record closing highs, while the tech-heavy Nasdaq reached its best closing level in two years. Continued strength among tech stocks helped the markets. The rally on Wall Street also came after the University of Michigan released a report showing a significant improvement in U.S. consumer sentiment as well as a continued decrease in inflation expectations. Back home, in stock specific development, HUL down on muted Q3 performance.

The BSE Sensex is currently trading at 71809.78, up by 126.55 points or 0.18% after trading in a range of 71747.96 and 72026.26. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.60%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Utilities up by 1.10%, PSU up by 1.06%, Power up by 1.03%, Bankex up by 0.51% and Industrials up by 0.47%, while FMCG down by 0.18%, TECK down by 0.12% and IT down by 0.12% were the few losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.19%, HDFC Bank up by 0.92%, NTPC up by 0.78%, Axis Bank up by 0.74% and ICICI Bank up by 0.60%. On the flip side, Hindustan Unilever down by 1.95%, Ultratech Cement down by 0.74%, Nestle down by 0.70%, Bharti Airtel down by 0.28% and Reliance Industries down by 0.11% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das expressed confidence that digital currency or Central Bank Digital Currency (CBDC) will make cross-border payments more efficient and fast, in addition to being cost-effective. The digital currency was launched in India on a pilot basis, both in the wholesale and retail categories, in November-December 2022.

He said ‘The greatest advantage of CBDC will be cross-border payments internationally. International cross-border payments will become far more efficient, faster, and very very cost-effective. As and when other countries adopt this digital currency, international payment systems will gain in efficiency, speed, and cost. And ultimately, it’s a new technology which is developing and I think it’s going to be the future of money’.

The RBI Governor said that the countrywide launch will depend on the success, the learnings, and the fine-tuning of the pilot version. He said ‘So that is the distance we have to cover’. He added ‘But we have no target date…We are not in any undue hurry or rush to implement it full scale because after it is a currency, its safety, integrity, and efficiency have to be ensured.’ In the retail segment, there are at present about 4 million users and 0.4 million merchants who have been onboarded.

The CNX Nifty is currently trading at 21656.20, up by 33.80 points or 0.16% after trading in a range of 21636.70 and 21720.30. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.82%, NTPC up by 1.31%, Power Grid up by 1.27%, HDFC Bank up by 1.22% and Hindalco up by 1.12%. On the flip side, Hindustan Unilever down by 2.72%, Wipro down by 1.35%, HDFC Life Insurance down by 1.19%, Nestle down by 0.56% and Ultratech Cement down by 0.46% were the top losers.