Sensex, Nifty gain momentum to trade firm in early deals ahead of RBI MPC decision

Indian equity benchmarks made cautious start on Friday tracking weakness in global markets with a mixed close on Wall Street overnight as well as mostly negative cues from Asian counterparts, as the rate cut announcements by the European Central Bank and the Bank of Canada raised expectations of an interest rate cut by the US Fed in September, which could stimulate economic activity. The ECB has cut interest rate for the first time since September 2019. Traders also remained cautious and stuck to the sidelines ahead the release of closely watched monthly jobs report later in the day, which could have a significant impact on the outlook for interest rates. Besides, traders were concerned as foreign institutional investors (FIIs) continued their selling streak, offloading shares worth Rs 6,867.72 crore. 

Sensex and Nifty soon gained momentum and are trading with gains of around half a percent each in early deals ahead of the Reserve Bank of India (RBI) MPC decision on interest rates later in the day. As per a private report, the central bank is likely to maintain the status quo on repo rate at 6.50 per cent and withdrawal of accommodation stance. Also, the six-member committee is likely to maintain status quo on repo rate.  Traders also await Prime Minister Narendra Modi's oath ceremony on Sunday after his allies chose him as their leader at a key meeting.

On the sectoral front, some of the aviation industry stocks are trading higher as credit ratings agency Icra said domestic air passenger traffic grew 5.1 per cent year-on-year to an estimated 138.9 million in May and was significantly higher by around 14 per cent than pre-Covid levels. Icra also said the outlook on the Indian aviation industry is stable amid the continued recovery in domestic and international air passenger traffic with a relatively stable cost environment and expectations of the trend continuing in FY2025. In stock specific development, Wipro is leading the gainers on BSE and NSE on winning a $500 million contract from a leading U.S. communication service provider.

The BSE Sensex is currently trading at 75417.07, up by 342.56 points or 0.46% after trading in a range of 74941.88 and 75491.30. 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 0.39%, while Small cap index was up by 1.26%.

The top gaining sectoral indices on the BSE were IT up by 2.53%, TECK up by 1.81%, Telecom up by 1.00%, Healthcare up by 0.76% and Consumer Durables up by 0.73%, while Power down by 0.26% and Utilities down by 0.08% were the only losing indices on BSE.

The top gainers on the Sensex were Wipro up by 4.77%, Tech Mahindra up by 2.91%, Infosys up by 2.75%, Bajaj Finance up by 1.83% and HCL Technologies up by 1.52%. On the flip side, Hindustan Unilever down by 0.77%, Larsen & Toubro down by 0.71%, Indusind Bank down by 0.51%, ITC down by 0.34% and Kotak Mahindra Bank down by 0.26% were the top losers.

Meanwhile, in an encouraging move, the commerce ministry has said India offers huge investment opportunities worth over $500 billion, particularly in clean energy value chain including renewables, green hydrogen and EV, by 2030. India attended the two-day meet of the Indo-Pacific Economic Framework for Prosperity (IPEF) Clean Economy Investor Forum. The meeting brought together the region's top investors, clean economy companies, and start-ups to mobilise investments into sustainable infrastructure, climate technology, and renewable energy projects. 

The 14-member IPEF bloc was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23, 2022, in Tokyo. Together, they account for 40 per cent of the world's economic output and 28 per cent of trade. The framework is structured around four pillars relating to trade, supply chains, clean economy and fair economy. India has joined all the pillars except the trade. Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the US, and Vietnam are members of the bloc.

Commerce Secretary Sunil Barthwal has acknowledged the forum as a unique platform that brought global investors, policy makers, and academia under one roof, which would be instrumental in advancing sustainable infrastructure in the Indo-Pacific Region. The secretary underlined the huge investment opportunities that 'India offers of more than $500 billion, particularly in the clean energy value chain including renewables, green hydrogen and EV and its infrastructure transition, by 2030'. He also highlighted key reforms around ease of doing business in India to improve business environment over the last decade.

The ministry said in the sustainable infrastructure track, after the screening, ‘four companies (ReNew Power, Avaada Energy, Indusbridge Capital Advisors LLP. Founder, SEIP, and Powerica) from India were shortlisted for pitching their concepts on energy transition, transport and logistics, and waste management/waste to energy to global investors’. Similarly, in the climate tech track, 10 Indian startups and companies (BluSmart, Recykal, LOHUM, Sea6 Energy, EVage Ventures, Kabira Mobility, Batx Energies, Newtrace and Alt Mobility, igrenEnergi, Inc.) were selected to pitch their innovative ideas, technologies and solutions that contribute to mitigating or adapting to climate change. Further, the ministry said that the forum resulted in $23 billion investment opportunities for sustainable infrastructure projects in the Indo-Pacific.

The CNX Nifty is currently trading at 22931.55, up by 110.15 points or 0.48% after trading in a range of 22789.05 and 22953.80. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Wipro up by 4.79%, LTIMindtree up by 3.87%, Tech Mahindra up by 3.12%, Infosys up by 2.94% and Bajaj Finance up by 2.01%. On the flip side, SBI Life Insurance down by 1.32%, Hindustan Unilever down by 0.84%, Larsen & Toubro down by 0.61%, Bajaj Auto down by 0.53% and Coal India down by 0.53% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 77.76 points or 0.42% to 18,399.04, Nikkei 225 slipped 76.08 points or 0.2% to 38,627.43, Taiwan Weighted lost 37.88 points or 0.17% to 21,864.82, Jakarta Composite fell 31.17 points or 0.45% to 6,943.73 and Shanghai Composite was down by 7 points or 0.23% to 3,041.79. On the other hand, KOSPI rose 27.25 points or 1% to 2,716.75 and Straits Times was up by 14.02 points or 0.42% to 3,344.83.