Sensex, Nifty trade in fine-fettle in early deals

Indian equity benchmarks extended their previous session’s gains with optimistic start on Friday as weak U.S. retail sales data sent Treasury yields down and added to bets that the Federal Reserve will cut interest rates in coming months. Sensex and Nifty are trading in fine-fettle with gains of around 0.35% each in early deals led by healthy buying in automobile industry stocks. Sentiments got a boost as the government data showed India's exports rose to a three-month high of 3.12 per cent to $36.92 billion in January despite global uncertainties including the Red Sea crisis, while the trade deficit narrowed to a nine-month low of $17.49 billion. After recording negative growth for two months in a row, imports grew by about 3 per cent to $54.41 billion in January. The previous low in trade deficit -- the difference between imports and exports -- was recorded in April 2023 at $15.24 billion. In January 2023, it was $17.03 billion. 

On the global front, Asian markets are trading mostly higher, tracking overnight gains on Wall Street, after the latest batch of US economic data showing a bigger than expected drop in retail sales in the month of January raised the possibility of an interest rate cut as early as June. China remains closed for the Lunar New Year holidays. Back home, banking stocks are in focus as S&P Global Ratings said challenges in mobilising deposits to meet loan demand may hit bank credit growth in India in the next financial year (FY25). It added credit growth may slip to 14 per cent year-on-year (YoY) in FY25 compared to 16 per cent till December 2023. In stock specific development, Reliance Industries traded in green amid reports that it is in talks to buy a 29.8 percent stake in subscription-based satellite TV and video streaming service provider Tata Play from Walt Disney.

The BSE Sensex is currently trading at 72290.23, up by 239.85 points or 0.33% after trading in a range of 72234.76 and 72419.02. 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 0.58%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Auto up by 1.54%, Healthcare up by 1.06%, Consumer discretionary up by 1.01%, Industrials up by 0.87% and Capital Goods up by 0.87%, while Utilities down by 0.54%, Power down by 0.45% and PSU down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.40%, Mahindra & Mahindra up by 1.70%, Infosys up by 1.34%, Larsen & Toubro up by 1.26% and Maruti Suzuki up by 1.22%. On the flip side, Power Grid down by 1.81%, ITC down by 0.83%, HCL Technologies down by 0.36%, Axis Bank down by 0.32% and SBI down by 0.21% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said recurring food price shocks and renewed flash points on the geo-political front pose challenges in tackling inflation. He said ‘We remain vigilant to navigate through the last mile of disinflation as it is often the most difficult part of the journey. We firmly recognise that stable and low inflation will provide the necessary bedrock for sustainable economic growth’. Das stressed that stable and low inflation will provide the necessary bedrock for sustainable economic growth. He added India has successfully navigated through multiple challenges and emerged as the fastest-growing large economy.

He further said ‘Prudent monetary and fiscal policies have paved the path for India’s success in sailing through these rough waters. The Reserve Bank projects the Indian economy to grow by 7.0 per cent during 2024-25, marking the fourth successive year of growth at or above 7 per cent’. Das also said inflation has moderated from the highs of the summer of 2022. The retail inflation, which the RBI mainly factors in while arriving at its bi-monthly monetary policy, is inching towards its target of 4 per cent, with the January imprint at 5.1 per cent.

He highlighted that recurring food price shocks and renewed flash points on the geo-political front pose challenges to the ongoing disinflation process. He noted India’s coordinated policy response in the face of a series of adverse shocks can be a good template for the future. While monetary policy worked on anchoring inflation expectations and quelling demand-pull pressures, supply-side interventions by the government alleviated supply-side pressures and moderated cost-push inflation. Effective fiscal-monetary coordination was at the core of India’s success.

The governor said the global economy stands at a crossroads, and challenges remain in plenty, but new opportunities are also knocking at the door. He said ‘Together, the course we take from here will decide our destiny in times to come. We need policies that are attuned to the new realities of the global economy. In an uncertain world, central banks need to be proactive to better serve the objectives of price and financial stability’. He noted that prospects of a soft landing have improved for the global economy, but there are multiple challenges with uncertainties looming on the horizon.

The CNX Nifty is currently trading at 21994.10, up by 83.35 points or 0.38% after trading in a range of 21976.60 and 22024.15. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.40%, Bajaj Auto up by 2.95%, Tata Motors up by 2.28%, Mahindra & Mahindra up by 1.96% and Larsen & Toubro up by 1.54%. On the flip side, Power Grid down by 2.25%, ONGC down by 1.79%, Apollo Hospital down by 1.28%, ITC down by 0.92% and HCL Technologies down by 0.45% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 602.37 points or 1.58% to 38,760.31, Hang Seng jumped 285.18 points or 1.79% to 16,229.81, Jakarta Composite rose 54.84 points or 0.75% to 7,358.12, Straits Times added 40.94 points or 1.29% to 3,217.63, KOSPI was up by 29.98 points or 1.15% to 2,643.78. On the other hand, Taiwan Weighted lost 17.18 points or 0.09% to 18,627.39.