Markets gain traction after flat opening; Tata Motors hits 52-week high

Indian equity benchmarks made flat-to-positive start on Monday ahead of the Services PMI data to be out later in the day for more directional cues. Markets soon gained traction and are trading higher with decent gains in early deals as buying in auto and pharma stocks, while banking was the only losing index. Foreign fund inflows aided sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 70.69 crore on February 2, provisional data from the NSE showed. Some support also came in as the Reserve Bank of India (RBI) said India’s forex reserves increased $591 million to $616.733 billion for the week ended January 26. Traders took note of a report stating that there is no adverse impact on India's exports and imports so far due to the Red Sea crisis. 

On the global front, most of the Asian markets are trading lower, despite the broadly positive cues from Wall Street on Friday, as US data showing much stronger than expected job growth in January and an improvement in consumer sentiment further dimmed the possibility of an interest rate cut in March. On the economy front, the service sector in Japan continued to expand in January, and at a faster pace, the latest survey from Jibun Bank showed on Monday with a services PMI score of 53.1.

Back home, on the sectoral front, infrastructure industry stocks are in focus as Secretary Anurag Jain said the Ministry of Road Transport and Highways (MoRTH) aims to create a national record by constructing 13,813 km of highways in the current financial year. Jain said the ministry aims to eliminate less than two-lane national highways by 2027-28. In stock specific development, InterGlobe Aviation flies as Q3 net more-than-doubles to Rs 2,998 crore. However, SBI declined on weak Q3 results.

The BSE Sensex is currently trading at 72363.00, up by 277.37 points or 0.38% after trading in a range of 71972.77 and 72369.53. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.01%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.15%, Auto up by 2.04%, Utilities up by 1.71%, PSU up by 1.67% and Energy up by 1.66%, while Bankex down by 0.05% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 7.89%, Sun Pharma up by 2.32%, Mahindra & Mahindra up by 1.99%, Tata Steel up by 1.44% and NTPC up by 1.17%. On the flip side, Kotak Mahindra Bank down by 0.83%, HDFC Bank down by 0.73%, ICICI Bank down by 0.55%, Indusind Bank down by 0.36% and Reliance Industries down by 0.28% were the top losers.

Meanwhile, CRISIL in its latest report has said that the Indian economy is expected to grow at an average rate of 6.7 per cent per annum until the end of the decade. The economy will grow at this rate between the financial years 2024 to 2031, a notch above the pre-pandemic average of 6.6 per cent. It added that the key contributor to this trend will be capital. This is a result of the investment-driven strategy of the government when the private sector was shy of making investments. The government increased capital expenditure significantly to support building expenditure and providing interest-free loans to states to bolster their own investment efforts.

The report said that after a robust 7.3 per cent growth this fiscal, there will be moderation to 6.4 per cent in the next financial year. There is also a need to monitor the impact of the escalation of the Middle East conflict on energy and logistics costs. According to the report, in India, the inflation level of 5.7 per cent in December 2023 was driven solely by volatile vegetable prices and foodgrain inflation. This will keep RBI cautious on the rate front as it eyes the four per cent inflation target.

It said the continued softening of core inflation and deflation in fuel prices gives hope, but the persistent high price levels of the food items, which has substantial weight in consumer price index (CPI), keep the risks of its transmission to non-food components. It said the Federal Reserve of the US is expected to cut rates this year. The strong labour market data and higher-than-expected inflation have once more cast doubts on the timing and the extent of rate cuts expected to begin this year.

The CNX Nifty is currently trading at 21953.60, up by 99.80 points or 0.46% after trading in a range of 21833.40 and 21964.30. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 7.50%, BPCL up by 4.58%, Sun Pharma up by 2.50%, Cipla up by 2.38% and Coal India up by 2.07%. On the flip side, UPL down by 5.56%, Kotak Mahindra Bank down by 0.56%, HDFC Bank down by 0.43%, ICICI Bank down by 0.32% and Bajaj Finance down by 0.16% were the top losers.

Asian markets are trading mostly in red; Straits Times declined 52.42 points or 1.68% to 3,127.35, Shanghai Composite weakened 49.68 points or 1.85% to 2,680.47, KOSPI dropped 28.57 points or 1.1% to 2,586.74, Jakarta Composite fell 14.50 points or 0.2% to 7,224.29 and Hang Seng was down by 11.21 points or 0.07% to 15,522.35. On the other hand, Nikkei 225 surged 202.56 points or 0.56% to 36,360.58 and Taiwan Weighted was up by 29.84 points or 0.16% to 18,089.77.