Domestic indices trade firm in early deals on healthy buying

Indian equity benchmarks made optimistic start on Monday with Nifty touching a fresh all-time high of 22,621.65 tracking positive global cues. Domestic indices are trading firm in early deals with gains of around half a percent each on account of healthy buying in realty Consumer Durables and Oil & Gas an stocks. Foreign fund inflows aided domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 1,659.27 crore on April 5, provisional data from the NSE showed. Traders took encouragement as a recent bi-monthly survey conducted by the Reserve Bank of India (RBI) from March 2 to March 11, 2024 showed that consumer confidence in India has soared to its highest level since mid-2019. The survey, which included 6,083 respondents, with females comprising 50.8 percent of the sample, revealed a significant uptick in consumer sentiment.

On the global front, Asian markets are trading mixed, following the broadly positive cues from global markets on Friday, as traders reacted to US data showing much stronger than expected job growth in March that pointed to a robust economy. They also remained cautious ahead of the monetary policy decisions from central banks in the region, including New Zealand and South Korea. The markets also await reports on consumer and producer price inflation for the month of March from the U.S later in the week. Market in Indonesia is closed for Eid-ul-Fitr.

Back home, OMCs gained as crude prices eased to below $90/barrel. Automobile industry stocks are in focus with a private report that electric-vehicle sales in India are expected to rise 66% this year after nearly doubling in 2023 as state subsidies help fuel demand and supporting infrastructure comes up in the country. In stock specific development, Titan traded higher as Q4 revenue grows 17% YoY.

The BSE Sensex is currently trading at 74631.32, up by 383.10 points or 0.52% after trading in a range of 74410.07 and 74658.95. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Realty up by 1.77%, Consumer Durables up by 1.28%, Oil & Gas up by 1.27%, Energy up by 1.04% and Telecom up by 0.89%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Reliance Industries up by 1.74%, Power Grid up by 1.58%, Mahindra & Mahindra up by 1.54%, Bajaj Finserv up by 1.23% and Axis Bank up by 1.05%. On the flip side, Wipro down by 0.79%, Titan Company down by 0.30%, HDFC Bank down by 0.23% and Tata Motors down by 0.10% were the top losers.

Meanwhile, SBI Research, in a report, is anticipating the rate cut cycle to begin from October 2024, As the Reserve Bank of India (RBI) maintained the status quo in repo rate for the seventh time this week. The repo rate is the rate of interest at which RBI lends to other banks. Along expected lines, RBI kept the policy repo rate unchanged at 6.50 per cent, the seventh time in a row. The central bank also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target of 4 per cent, while supporting economic growth. 

RBI retained its inflation projection for 2024-25 at 4.5 per cent with Q1 at 4.9 per cent, Q2 at 3.8 per cent, Q3 at 4.6 per cent, and Q4 at 4.5 per cent. However, it noted that the outlook for inflation will largely be shaped by food price uncertainties (indications of a normal monsoon on one side while increasing incidence of climate shocks on other side). As per the report, ‘The good thing is however, that with 4 per cent inflation target in FY26, the RBI is possibly guiding the market with a prolonged rate cut cycle’. It argued ‘Possibly with more than a couple of rate cuts. We expect a series of rate cuts beginning October 2024, followed by another in December 2024 and possibly in February 2025. The stance change can happen in October itself’.

Coming to real GDP growth projection for 2024-25, it has been retained at 7.0 per cent (Q1: 7.1per cent, Q2: 6.9 per cent, Q3: 7.0 per cent, and Q4: 7.0 per cent) with risks evenly balanced. While agriculture may be supported by the expected normal monsoon in the best-case scenario, manufacturing is expected to maintain its momentum on the back of sustained profitability. Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory quite well. Barring the latest pauses, the RBI raised the repo rate by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.

The CNX Nifty is currently trading at 22611.80, up by 98.10 points or 0.44% after trading in a range of 22550.35 and 22623.90. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.63%, Tata Consumer Products up by 1.52%, Mahindra & Mahindra up by 1.47%, Power Grid up by 1.47% and BPCL up by 1.44%. On the flip side, Adani Ports & SEZ down by 1.86%, Apollo Hospital down by 1.50%, Wipro down by 0.83%, Adani Enterprises down by 0.76% and Bajaj Auto down by 0.31% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 302.58 points or 0.78% to 39,294.66, Taiwan Weighted rose 107.19 points or 0.53% to 20,444.79 and KOSPI increased 5.74 points or 0.21% to 2,719.95. on the other hand, Hang Seng declined 14.24 points or 0.09% to 16,709.68, Shanghai Composite fell 5.35 points or 0.17% to 3,063.95 and Straits Times was down by 1.45 points or 0.05% to 3,216.81.