Markets trade higher with decent gains ahead of IIP, CPI data

Indian equity benchmarks made positive start on Friday ahead of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be out later in the day. Reserve Bank of India Governor Shaktikanta Das said that India’s retail inflation is expected to be close to 5% in June, in line with the surveys conducted by the apex bank. Markets are trading higher with decent gains in early deals amid buying in IT and TECK counters. Traders took note of report that India and Russia have taken a significant step towards strengthening their economic ties by agreeing to establish a national currency settlement system. However, upside remained capped amid foreign fund outflows. On July 11, foreign institutional investors (FIIs) sold shares worth Rs 1,137.01 crore. Some cautiousness also crept in as latest data released by the Reserve Bank of India (RBI) showed that deposit growth of commercial banks further slowed down to 10.64 per cent for the fortnight ending June 28. Credit growth also declined during the period. 

On the global front, Asian markets are trading mixed, following the mixed cues from Wall Street overnight, after soft US inflation data in the month of June raised prospects of an interest rate cut by the US Fed as soon as its September meeting. Back home, edible oil industry stocks will be in focus as Solvent Extractors' Association of India (SEA) data showed that import of vegetable oils, comprising edible and non-edible oils, rose 18 per cent in June to 1.55 million tonnes on higher imports of crude palm oil and crude sunflower oil. In stock specific development, RCF zoomed on purchase order worth Rs 500 crore.

The BSE Sensex is currently trading at 80107.69, up by 210.35 points or 0.26% after trading in a range of 79928.60 and 80294.69. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.25%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were IT up by 1.85%, TECK up by 1.43%, Energy up by 0.35%, Oil & Gas up by 0.35% and Metal up by 0.31%, while Realty down by 0.87%, Healthcare down by 0.32%, Power down by 0.24%, Consumer Durables down by 0.23% and Utilities down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.99%, Infosys up by 1.98%, Axis Bank up by 1.39%, Tech Mahindra up by 1.05% and Mahindra & Mahindra up by 0.58%. On the flip side, Maruti Suzuki down by 1.07%, Sun Pharma down by 0.74%, Bharti Airtel down by 0.59%, Power Grid down by 0.39% and Kotak Mahindra Bank down by 0.34% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said the question of change of stance on interest rate is quite premature given the gap between current inflation and 4 per cent target. He added ‘when we move towards 4 per cent CPI (retail inflation) on a sustained basis is when we will get the confidence to think about a change in stance’. He said inflation journey is progressing as per expectations, but added that it is the last mile of the journey towards 4 per cent, which will be the most difficult or sticky.

RBI had said in its June bi-monthly report, Consumer Price Index (CPI)-based retail inflation has been projected at 4.5 per cent with quarter-wise projections at 4.9 per cent in Q1 (April-June), 3.8 per cent in Q2, 4.6 per cent in Q3, and 4.5 per cent in Q4. The RBI, which has been mandated to ensure inflation remains at 4 per cent (with margin of 2 per cent on either side), mainly factors in CPI while arriving at its monetary policy. 

He had said headline inflation softened further during March-April, though persisting food inflation pressures offset the gains of disinflation in core and deflation in the fuel groups. Despite some moderation, pulses and vegetables inflation remained firmly in double digits. Vegetable prices are experiencing a summer uptick following a shallow winter season correction. The deflationary trend in fuel was driven primarily by the LPG price cuts in early March. Core inflation softened for the 11th consecutive month since June 2023. Services inflation moderated to a historic low and goods inflation remained contained.

Regarding gross domestic product (GDP), Das said many drivers of growth are playing out their role and momentum of growth was very strong in fourth quarter of last financial year which continues to be strong in the first quarter. The June policy also revised upwards the GDP growth projection for the current fiscal to 7.2 per cent from 7 per cent on rising private consumption and revival of demand in rural areas. When the projected GDP growth of 7.2 per cent for 2024-25 materialises, it will be the fourth consecutive year with growth at or above 7 per cent.

The CNX Nifty is currently trading at 24392.90, up by 76.95 points or 0.32% after trading in a range of 24342.45 and 24440.75. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 3.39%, Wipro up by 3.19%, TCS up by 3.00%, LTIMindtree up by 2.21% and Infosys up by 2.03%. On the flip side, Divi's Lab down by 1.58%, Maruti Suzuki down by 1.03%, HDFC Life Insurance down by 0.77%, Bharti Airtel down by 0.66% and Sun Pharma down by 0.58% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 952.5 points or 2.31% to 41,271.52, Taiwan Weighted lost 536.35 points or 2.25% to 23,853.68, KOSPI dropped 35.56 points or 1.25% to 2,855.79, Shanghai Composite was down by 6.14 points or 0.21% to 2,964.25. On the other hand, Hang Seng jumped 353.2 points or 1.94% to 18,185.53, Jakarta Composite rose 33.66 points or 0.46% to 7,334.07 and Straits Times was up by 23.09 points or 0.66% to 3,498.15.