Markets trim some opening gains; trade marginally higher in early deals

Indian equity benchmarks made optimistic start on Thursday tracking broadly positive global cues. Bourses recorded fresh highs buoyed by easing inflation figures. Consumer Price Index (CPI)-based headline retail inflation eased to a 12-month low of 4.75 per cent in May on the back of a softening core and fuel inflation. Soon, markets trimmed some of their gains and are trading higher with marginal gains in early deals amid slight fall in industrial growth. The Index of Industrial Production (IIP) moderated to 5 per cent in April from an upwardly revised figure of 5.4 per cent in the preceding month. Traders took note of report that the country's outward foreign direct investment (FDI) commitments were almost flat at $2 billion in May 2024, compared to $1.98 billion in May 2023. 

On the global front, Asian markets are trading mostly higher, following broadly positive cues from Wall Street overnight, as investors weighed cooling US inflation against a more hawkish posture by the Federal Reserve. In his post-meeting press conference, Fed Chair Jerome Powell acknowledged that inflation has eased substantially but still remains too high. Japanese shares underperformed as the Bank of Japan began its two-day policy meeting.

Back home, insurance industry stocks are in focus as regulator Insurance Regulatory and Development Authority of India (Irdai) mandated insurance companies to provide loans on policies across all life insurance savings products, enabling policyholders to meet liquidity requirements. In stock specific development, Torrent Pharma traded under pressure after the USFDA issued 5 observations to the company. On the other hand, Bondada Engineering hit upper limit on order win worth Rs. 939.39 crore.

The BSE Sensex is currently trading at 76832.18, up by 225.61 points or 0.29% after trading in a range of 76777.77 and 77145.46. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.55%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Realty up by 1.47%, IT up by 1.22%, TECK up by 0.89%, Consumer Durables up by 0.60% and Industrials up by 0.56%, while FMCG down by 0.46%, Energy down by 0.09% and Oil & Gas down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.33%, Tech Mahindra up by 1.20%, TCS up by 1.20%, Nestle up by 1.07% and Titan Company up by 1.06%. On the flip side, Hindustan Unilever down by 1.34%, Power Grid down by 0.63%, NTPC down by 0.35%, ICICI Bank down by 0.27% and JSW Steel down by 0.26% were the top losers.

Meanwhile, ICRA Executive Vice President and Chief Ratings Officer K Ravichandran has said the PLI scheme is expected to attract investments of Rs 3-4 trillion in the next four years and generate 200,000 jobs as large projects in sectors, including semiconductor, solar module and pharmaceutical intermediaries, are expected to take off.

Ravichandran said that going ahead private sector capex is expected to pick up in oil and gas, metals and mining, hospitals, healthcare and cement sectors.  These are the sectors that are expecting large outlay over the medium term. However, taking the private sector capex to record high levels would require the government to give some tax breaks so that people have more disposable income in their hands.

The PLI scheme was announced in 2021 for 14 sectors, including telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharma, with an outlay of Rs 1.97 trillion. PLI schemes have witnessed over Rs 1.03 trillion of investment till November 2023, and employment generation of over 678,000.

The CNX Nifty is currently trading at 23367.20, up by 44.25 points or 0.19% after trading in a range of 23364.05 and 23481.05. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 2.58%, HDFC Life Insurance up by 2.51%, LTIMindtree up by 1.77%, Shriram Finance up by 1.52% and TCS up by 1.10%. On the flip side, Tata Consumer Products down by 1.56%, Hindustan Unilever down by 1.37%, Britannia Industries down by 1.15%, Cipla down by 1.10% and ONGC down by 1.02% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted added 224.64 points or 1.02% to 22,273.60, Hang Seng advanced 96.58 points or 0.54% to 18,034.42, KOSPI increased 36.60 points or 1.34% to 2,764.77 and Straits Times was up by 13.68 points or 0.41% to 3,321.12. On the other hand, Nikkei 225 slipped 56.12 points or 0.14% to 38,820.59, Shanghai Composite weakened 9.19 points or 0.3% to 3,028.28 and Jakarta Composite plunged 4.54 points or 0.07% to 6,845.56.