Benchmarks continue to trade higher in morning deals

Indian equity benchmarks continued to trade higher in morning deals, led by gains in Telecom, Banking and Capital Goods stocks. Sentiments remained positive as private survey showed business activity in India expanded robustly in May, helped by the dominant services industry. It also showed exports rising at a record pace and the sharpest job addition rate in nearly 18 years. HSBC's flash India Composite purchasing managers' Index, compiled by S&P Global, rose slightly to 61.7 this month from April's final reading of 61.5, marking the 34th month above the 50-level separating growth from contraction. Traders took a note of report that the Reserve Bank of India's board approved transfer of Rs 2.11 trillion ($25.35 billion) as surplus to the federal government for the fiscal year ended March. As per the interim budget estimates for fiscal year 2024/25, the Narendra Modi-led government had budgeted for a dividend of Rs 1.02 trillion from the central bank, state-run banks and other financial institutions. On the global front, Asian markets are trading mostly in green as positive earnings from U.S. chipmaker Nvidia offset the Federal Reserve's latest policy minutes reflected disappointment in recent inflation data, dampening hopes of an early rate cut.

The BSE Sensex is currently trading at 74598.27, up by 377.21 points or 0.51% after trading in a range of 74158.35 and 74632.36. 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 0.30%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Telecom up by 1.55%, Bankex up by 1.17%, Capital Goods up by 1.14%, TECK up by 0.92% and Industrials up by 0.91%, while Metal down by 1.02%, Healthcare down by 0.92%, Basic Materials down by 0.63%, Utilities down by 0.57% and Power down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.20%, SBI up by 1.76%, Bharti Airtel up by 1.74%, Larsen & Toubro up by 1.65% and ICICI Bank up by 1.42%. On the flip side, Sun Pharma down by 3.88%, Power Grid Corporation down by 3.42%, JSW Steel down by 0.84%, NTPC down by 0.33% and Nestle down by 0.21% were the top losers.

Meanwhile, benefiting from strong sales, Crisil has said that organised gold jewellery retailers are set to clock 17-19 per cent revenue growth in the current financial year 2024-25 (FY25). It asserted that the projected revenue would be driven by higher realisations stemming from elevated gold prices, while volume remains steady.

Gold, considered a safe haven asset for investment, has been in demand for considerable period of time, with its prices rallying to hit record highs every now and then. Geopolitical conflict in the West Asia that stretched for long now, buying by several central banks including RBI, physical demand, have altogether pushed gold prices towards northwards.

It stated retailers are likely to step up marketing and promotional campaigns this fiscal to combat the moderation in demand amid rising gold prices. Hence, operating profitability may marginally moderate 20-40 basis points (100 basis points is equal to 1 percentage point) year-on-year to 7.7-7.9 per cent. Besides, it said Working capital requirements may rise, too, resulting from increased inventory due to a substantial rise in gold prices and new stores additions. That said, credit profiles should remain stable.

The CNX Nifty is currently trading at 22707.60, up by 109.80 points or 0.49% after trading in a range of 22577.45 and 22719.35. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.46%, SBI up by 1.86%, Larsen & Toubro up by 1.70%, BPCL up by 1.69% and Bharti Airtel up by 1.66%. On the flip side, Sun Pharma down by 3.79%, Power Grid Corp down by 3.53%, Grasim Industries down by 1.41%, Hindalco down by 1.35% and Britannia Industries down by 1.09% were the top losers.

Asian markets are trading mostly in green; Straits Times rose 8.71 points or 0.26% to 3,316.61, KOSPI increased 5.30 points or 0.19% to 2,728.76, Nikkei 225 surged 475.03 points or 1.23% to 39,092.13 and Taiwan Weighted added 53.98 points or 0.25% to 21,605.81.

On the flip side, Hang Seng declined 265.58 points or 1.4% to 18,930.02 and Shanghai Composite weakened 31.72 points or 1.01% to 3,126.82.