Domestic indices trade in red in early deals on Thursday

Domestic equity indices have made slightly positive start but failed to hold gains and are trading in red in early deals on Thursday amid mixed cues from the other Asian markets. Traders were cautious as the ministry of labour and employment said that formal job creation under the Employees’ State Insurance Corporation (ESIC) fell by 7.8% to 1.64 million in April 2024 as against 1.78 million in the corresponding month last year. Meanwhile, the government monetised assets worth Rs 1.56 trillion under the National Monetisation Pipeline (NMP) in 2023-24, lower than the target of Rs 1.8 trillion. Under the NMP, the aggregate monetisation potential of the central government's brownfield infrastructure assets has been estimated at Rs 6 trillion over a four-year period, from FY22 to FY25. However, losses were limited as foreign fund inflows aided domestic sentiments. Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 7,908.36 crore on June 19. Traders took a note of report that the Union Cabinet led by Prime Minister Narendra Modi approved minimum support price (MSP) for 14 kharif crops. The government raised MSP for paddy by 5.35 per cent to Rs 2,300 per quintal for the 2024-25 kharif marketing season.

On the global front, Asian markets are trading mixed on Thursday as China kept its one- and five-year loan prime rates unchanged at 3.45% and 3.95% respectively. The US markets were closed on Wednesday on account of Juneteenth. Back home, on the BSE sectoral front, traders were seen pilling up positions in Realty, Basic Materials, Consumer Disc, Metal, Consumer Durables, while selling was withered in Healthcare, FMCG, PSU, TECK  and IT. 

The BSE Sensex is currently trading at 77232.08, down by 105.51 points or 0.14% after trading in a range of 77194.01 and 77588.31. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.69%.

The top gaining sectoral indices on the BSE were Realty up by 1.02%, Basic Materials up by 0.56%, Consumer Disc up by 0.47%, Metal up by 0.43% and Consumer Durables up by 0.33%, while Healthcare down by 0.53%, FMCG down by 0.30%, PSU down by 0.26%, TECK down by 0.19% and IT down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.76%, Tata Motors up by 0.76%, Ultratech Cement up by 0.69%, HDFC Bank up by 0.47% and Maruti Suzuki up by 0.43%. On the flip side, Sun Pharma down by 1.67%, Power Grid down by 1.30%, Bajaj Finance down by 1.11%, Bajaj Finserv down by 1.08% and HCL down by 0.90% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its article on the ‘State of the Economy’ published in the June 2024 Bulletin has said that the goal of aligning inflation with the target of 4 per cent remains a work in progress as long as food price pressures persist. It also said the retail inflation is gradually easing, but volatile and elevated food prices are interrupting the path of disinflation.

The article, authored by a team lead by the Reserve Bank of India Deputy Governor Michael Debabrata Patra, noted that global growth was resilient in the first quarter of 2024, and many central banks have pivoted towards a less restrictive monetary policy stance in response to the fall in inflation in their economies. In India, high-frequency indicators suggest the real GDP growth in Q1 FY25 is broadly maintaining the pace it achieved in the preceding quarter. Also, it stated the prospects for agriculture are brightening with the early landfall of the southwest monsoon.

The RBI has been mandated by the government to ensure retail or headline inflation remains at 4 per cent with a margin of 2 per cent on either side. It mentioned the fact that the ongoing disinflation is being driven by the softening of the core component of consumer price index (CPI) inflation to a new low validates the stance of monetary policy.

The CNX Nifty is currently trading at 23489.35, down by 26.65 points or 0.11% after trading in a range of 23461.75 and 23587.70. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.84%, Hindalco up by 0.88%, Tata Motors up by 0.74%, Eicher Motors up by 0.71% and Ultratech Cement up by 0.66%. On the flip side, Sun Pharma down by 1.73%, HDFC Life Insurance down by 1.72%, Bajaj Finance down by 1.16%, Power Grid down by 1.15% and Bajaj Finserv down by 1.09% were the top losers.

Asian markets are trading mixed; Hang Seng declined 88.84 points or 0.48% to 18,341.55, Shanghai Composite weakened 8.29 points or 0.28% to 3,009.76, Straits Times fell 10.14 points or 0.31% to 3,293.86 and Nikkei 225 slipped 126.97 points or 0.33% to 38,443.79. However, Jakarta Composite gained 57.89 points or 0.86% to 6,784.8, KOSPI increased 8.87 points or 0.32% to 2,806.20 and Taiwan Weighted added 29.98 points or 0.13% to 23,239.52.