Sustain buying takes Indian markets to intraday high points

A sustain buying took Indian equity markets to intraday high points during early afternoon deals, with both Sensex and Nifty holding gains over a per cent, despite mixed cues from other Asian markets. Sentiments were positive, amid a private report stating that a faster increase in household deposit growth likely pushed net financial savings to 6% of GDP in FY24 from 5.1% in the previous year. Besides, the business activity in India expanded robustly in the month of May, aided by rise in aggregate exports, the steepest expansion in private sector jobs since September 2006 and a notable improvement in business confidence. The headline HSBC Flash India Composite Output Index - a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors - rose from a final reading of 61.5 in April to 61.7 in May, which indicated the third-strongest rate of expansion in close to 14 years.

On the global front, Asian markets were trading mixed, even after Japan's private sector expanded at the fastest pace in nine months in May as the manufacturing activity recovered for the first time in a year. The flash survey results from S&P Global showed that the au Jibun Bank flash composite output index hit 52.4 in May, up from 52.3 in April. A score above 50.0 indicates expansion. The private sector expanded for the third consecutive month and also logged the fastest growth since August 2023.

The BSE Sensex is currently trading at 75001.32, up by 780.26 points or 1.05% after trading in a range of 74158.35 and 75003.43. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.54%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.76%, Bankex up by 1.64%, Telecom up by 1.50%, Auto up by 1.37% and TECK up by 1.34%, while Metal down by 0.83%, Healthcare down by 0.43%, Utilities down by 0.17% and Basic Materials down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.30%, Larsen & Toubro up by 3.11%, Mahindra & Mahindra up by 2.28%, Maruti Suzuki up by 1.94% and SBI up by 1.74%. On the flip side, Sun Pharma down by 3.24%, Power Grid down by 2.85% and NTPC down by 0.79% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that benefits from the 38 critical mineral blocks that have been put on sale are not likely to accrue in the current decade ending 2030 as the mines are not fully explored. Therefore, it said India's downstream manufacturing facilities are likely to remain exposed to potential future supply shocks of critical minerals in the intervening years.

According to the report, the government is auctioning two lithium blocks in the ongoing auctions. The one in Jammu & Kashmir has clay deposits. While the technology for extracting lithium from hard rock and brine deposits has matured, the same for extracting lithium from clay deposits remains untested globally. Given these challenges, the J&K lithium block received less than three bids, resulting in a re-auction of the block. On the other hand, it said the lithium block being auctioned in Katghora, Chhattisgarh is a hard rock deposit. The ore here belongs to a broader class of lithium-bearing minerals named lepidolite. China is a large producer of lithium from lepidolite ores. Therefore, competition to acquire the Katghora mine is likely to be much higher compared to the J&K block.

However, the report said given the inferior grade of explored domestic ores, advancement in mineral beneficiation/ processing technology remains critical for commercialisation of domestic critical mineral resources. Apart from developing domestic critical mineral resources, the government is parallelly looking at acquiring overseas assets from key resource-rich regions like South America, Australia, and Africa as an alternate measure to ensure mineral security.

The CNX Nifty is currently trading at 22830.70, up by 232.90 points or 1.03% after trading in a range of 22577.45 and 22837.65. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 4.88%, Axis Bank up by 3.53%, Larsen & Toubro up by 3.16%, Mahindra & Mahindra up by 2.26% and Adani Ports & SEZ up by 2.21%. On the flip side, Sun Pharma down by 3.14%, Power Grid down by 2.87%, Hindalco down by 1.97%, Coal India down by 1.10% and NTPC down by 0.75% were the top losers. 

Asian markets were trading mixed; Hang Seng declined 302.06 points or 1.6% to 18,893.54, Shanghai Composite weakened 35.96 points or 1.15% to 3,122.58 and KOSPI dropped 1.65 points or 0.06% to 2,721.81, while Straits Times rose 11.48 points or 0.35% to 3,319.38, Nikkei 225 surged 486.12 points or 1.24% to 39,103.22 and Taiwan Weighted added 55.6 points or 0.26% to 21,607.43.