Markets trade with traction; Sensex breaches 80K mark for first time

Indian equity benchmarks made optimistic start on Wednesday tracking overnight strong gains on Wall Street on growing optimism that the U.S. Federal Reserve will cut interest rates in September. Markets soared to new highs at open, with Sensex breaching the 80k mark for the first time and reaching its lifetime high at 80,074 points, while the Nifty50 index surged 169 points, recording its fresh high at 24,292. Investors are looking ahead to the HSBC Composite and Services data to be announced later in the day for more cues. Markets are trading higher with notable gains in early deals amid buying in Bankex, Telecom and Industrials counters. Traders took some encouragement with Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister of India, forecast reaching a $4 trillion GDP milestone this year, outpacing global growth rates. Some support came as the India Meteorological Department (IMD) said the southwest monsoon covered the entire country on Tuesday, six days ahead of its normal date, boosting prospects of kharif sowing. 

On the global front, Asian markets are trading mostly higher as traders are digesting US Fed Chair Jerome Powell's speech at the ECB Forum in Portugal, where he expressed satisfaction with the progress on inflation but said he wants to see more before being confident enough to start cutting interest rates. Powell said that policy makers want to understand whether recent weaker inflation readings indicate a true picture of underlying price pressures. Meanwhile, the services sector in Japan slipped into contraction territory in June, the latest survey from Jibun Bank revealed on Wednesday with a services PMI score of 49.4.

Back home, banking stocks are buzzing ahead of Bank Nifty weekly expiry. Railways stocks are in focus as data released by the ministry of railways showed that Indian Railways witnessed a 10 per cent increase in freight loading in June, marking a rare double-digit rise in its goods transportation in the past few months. In stock specific development, Rail Vikas Nigam climbed on winning a new order from Central Railways.

The BSE Sensex is currently trading at 80016.83, up by 575.38 points or 0.72% after trading in a range of 79754.95 and 80039.22. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.58%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Bankex up by 1.72%, Telecom up by 0.79%, Industrials up by 0.71%, PSU up by 0.68% and Consumer Durables up by 0.61%, while Oil & Gas down by 0.04% was the sole losing index on BSE.

The top gainers on the Sensex were HDFC Bank up by 2.62%, ICICI Bank up by 1.81%, Axis Bank up by 1.71%, Kotak Mahindra Bank up by 1.58% and Nestle up by 0.89%. On the flip side, TCS down by 0.91%, Tata Motors down by 0.57%, Ultratech Cement down by 0.32%, Titan Company down by 0.28% and Sun Pharma down by 0.25% were the top losers.

Meanwhile, expressing optimism over the India’s economic growth prospects, Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister of India, has forecasted reaching a $4 trillion Gross Domestic Product (GDP) milestone this year, outpacing global growth rates. Currently, in US dollar terms, India is the fifth largest economy with a size of about $3.7 trillion in nominal terms.

He highlighted India’s ambitious goal to surpass the $4 trillion GDP mark and solidify its position as the world’s fastest-growing economy. He stated ‘This year, India’s GDP will reach $4 trillion, putting us on par with Japan in terms of economic size. We continue to lead as the world’s fastest-growing economy by a significant margin. Last year, our growth rate surprised us at 8.2 per cent, and we anticipate over 7 per cent growth this year, outpacing all major economies’. He emphasized the compounding effects of India’s growth rate, noting the rapid pace at which economic milestones have been achieved.

Sanyal said ‘After liberalization, it took us 16-17 years to cross the first trillion dollars mark. It took another 7 years to reach the 2 trillion dollars mark, which happened in 2014-15. It took another 7 years to hit the 3 trillion dollars mark in 2021-22. It should have taken 5 years, but we lost 2 years because of COVID-19. In just 3 years, we will cross 4 trillion dollars. Now we will need only 2 years to cross 5 trillion dollars unless some major unseen shock happens.’

He underscored the importance of maintaining macroeconomic stability, addressing non-performing assets in banks, bureaucratic reforms, enhancing global trade engagement, and investing in sustainable energy through renewables and green technologies. He also critiqued global ESG (Environmental, Social, and Governance) standards, expressing skepticism about their imposition without fair consultations by North Atlantic agencies.

The CNX Nifty is currently trading at 24298.25, up by 174.40 points or 0.72% after trading in a range of 24207.10 and 24303.10. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 2.79%, ICICI Bank up by 1.97%, Axis Bank up by 1.92%, Kotak Mahindra Bank up by 1.56% and Britannia up by 1.28%. On the flip side, TCS down by 0.81%, Tata Motors down by 0.68%, Ultratech Cement down by 0.46%, Power Grid down by 0.29% and Sun Pharma down by 0.25% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 413.97 points or 1.03% to 40,488.66, Taiwan Weighted jumped 241.51 points or 1.06% to 23,120.88, Hang Seng advanced 209.38 points or 1.18% to 17,978.52, Straits Times rose 44.48 points or 1.32% to 3,412.38, Jakarta Composite gained 17.53 points or 0.25% to 7,142.67 and KOSPI was up by 11.52 points or 0.41% to 2,792.38, while Shanghai Composite was down by 12 points or 0.4% to 2,985.01.