Gaining rally continues over Dalal Street in early afternoon deals

A gaining rally continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading near their intraday high points, amid the NDA parliamentary party meeting began in the Parliament's Central Hall. After this meeting, the NDA will stake a claim to form the government. Sentiments remained optimistic, after the Reserve Bank Governor Shaktikanta Das revealed that India's foreign exchange reserves have soared to an unprecedented $651.5 billion as of May 31. The overall reserves have risen by $4.83 billion since the last reported $646.673 billion on May 24. Besides, the Reserve Bank of India (RBI) upheld its projection for retail inflation at 4.5% for the current fiscal year, contingent on normal monsoon conditions. This stance arises amidst uncertainties in food prices, which necessitate close scrutiny.

On the global front, Asian markets were trading mostly in red, as Taiwan consumer price inflation accelerated in May to the highest level in three months amid a rise in food costs. The data released by the Directorate General of Budget, Accounting, and Statistics showed that the consumer price index, or CPI, rose 2.24 percent year-on-year in May, faster than the 1.94 percent rise in April. Food inflation increased to 3.43 percent from 2.58 percent. Housing costs also increased at a faster pace of 2.32 percent versus a 2.07 percent rise seen in April.

The BSE Sensex is currently trading at 76467.01, up by 1392.50 points or 1.85% after trading in a range of 74941.88 and 76536.29. All 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.66%, while Small cap index was up by 1.68%.

The top gaining sectoral indices on the BSE were IT up by 3.29%, TECK up by 2.92%, Telecom up by 2.18%, Consumer Durables up by 1.52% and Auto up by 1.27%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Wipro up by 5.04%, Bajaj Finance up by 4.61%, Infosys up by 4.18%, Tech Mahindra up by 3.22% and Ultratech Cement up by 2.78%, while there were no losers.

Meanwhile, credit ratings agency ICRA in its latest report has said that domestic air passenger traffic grew 5.1 per cent year-on-year to an estimated 13.89 million in May 2024 and was significantly higher by around 14 per cent than pre-Covid levels. It 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. It added that the airlines' capacity deployment in May increased 6 per cent year-on-year and about 2 per cent higher than April 2024.

According to the report, the domestic air passenger traffic for FY24 was around 154 million, with a year-on-year growth of around 13 per cent. It thus surpassed the pre-COVID levels of around 142 million in FY20. It also said the international passenger traffic for Indian carriers stood at around 29.68 million in FY24, registering a year-on-year growth of around 24 per cent. Moreover, the industry witnessed improved pricing power, reflected in the higher yields (over pre-Covid levels). It stated that the momentum in air passenger traffic witnessed in FY24 is expected to continue into FY25. However, it said further expansion in yields from the current levels may be limited. 

The report further said despite a healthy recovery in air passenger traffic and improvement in yields, the movement of the latter will remain monitorable amid elevated aviation turbine fuel (ATF) prices and depreciation of the INR vis-a-vis the USD over pre-Covid levels, both of which have a major bearing on the airlines' cost structure. Average ATF price stood at Rs 103,499/KL in FY24, 14 per cent lower than Rs 121,013/KL in FY23 but significantly higher by 58 per cent than the pre-Covid levels of Rs 65,368/KL in FY20. In Q1 FY25, the average ATF price remained higher by 5.4 per cent on a year-on-year basis. In June 2024, it declined by 6.5 per cent sequentially.   

The CNX Nifty is currently trading at 23209.85, up by 388.45 points or 1.70% after trading in a range of 22789.05 and 23230.15. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 5.20%, Wipro up by 4.86%, Infosys up by 4.29%, LTIMindtree up by 3.62% and Tech Mahindra up by 3.16%. On the flip side, SBI Life Insurance down by 1.41%, Bajaj Auto down by 0.39%, Eicher Motors down by 0.14% and Tata Consumer Products down by 0.08% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 106.13 points or 0.58% to 18,370.67, Jakarta Composite plunged 39.64 points or 0.57% to 6,935.26, Shanghai Composite weakened 0.22 points or 0.01% to 3,048.57, Nikkei 225 slipped 19.58 points or 0.05% to 38,683.93 and Taiwan Weighted lost 44.32 points or 0.2% to 21,858.38, while Straits Times rose 12.26 points or 0.37% to 3,343.07 and KOSPI increased 31.21 points or 1.15% to 2,720.71.