Sensex, Nifty open at record highs; trade firm with decent gains

Indian equity benchmarks opened at record highs on Friday driven by positive global trends led by strong Q2 GDP numbers in the US, overnight, and Moody's decision to raise India's 2024 GDP growth forecast to 7.2% from 6.8 per cent previously citing signs of improving rural demand. Also, growth for 2025 is pegged at 6.6 per cent versus 6.4 per cent. Sensex and Nifty are trading firm in early deals with decent gains amid value buying in sectors such as Realty, Metal and Oil & Gas. Some support came as retail inflation rates for farm and rural workers eased to 6.17 per cent and 6.20 per cent, respectively, in July. The retail inflation rates for farm and rural workers were 7.02 per cent and 7.04 per cent, respectively, in June this year. Meanwhile, Fitch affirmed India's long-term foreign currency issuer rating at 'BBB-' with a stable outlook, citing a strong medium-term growth outlook. Moreover, investors are eyeing India’s GDP and infrastructure output data, which were scheduled to be released later in the day.

On the global front, all the Asian markets are trading higher, following the mixed cues from Wall Street overnight, as traders react to a slew of domestic economic data from Japan and Australia. The Ministry of Internal Affairs and Communications or MIAC said the unemployment rate in Japan came in at a seasonally adjusted 2.7 percent in July. That was above forecasts for 2.5 percent, which would have been unchanged from the June reading.

Back home, on the sectoral front, sugar stocks are buzzing as the government removed the cap on sugar diversion for ethanol production for ESY (Ethanol Supply Year - December to November) 2024-25. According to the government's notification, sugar mills and distilleries can produce ethanol from sugarcane juice/sugar syrup, B-Heavy molasses, as well as C-Heavy molasses, during ESY2024-25 as per their agreements with oil marketing companies. In stock specific development, SpiceJet traded under pressure after DCGA puts is on enhanced surveillance. However, HFCL gained after it successfully completed one of the world’s largest CUPS architecture-based BNG deployments for BSNL.

The BSE Sensex is currently trading at 82416.51, up by 281.90 points or 0.34% after trading in a range of 82316.95 and 82637.03. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Realty up by 0.90%, Metal up by 0.87%, Oil & Gas up by 0.79%, Basic Materials up by 0.73% and PSU up by 0.59%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were JSW Steel up by 1.52%, Tata Steel up by 1.27%, Titan Company up by 1.27%, Power Grid up by 1.19% and Hindustan Unilever up by 1.18%. On the flip side, Tata Motors down by 1.08%, Tech Mahindra down by 0.31%, Reliance Industries down by 0.25%, Adani Ports & SEZ down by 0.24% and Sun Pharma down by 0.02% were the top losers.

Meanwhile, citing signs of improving rural demand, Moody's has raised India's growth projection for 2024 and 2025. Moody's now expects India's economy to expand 7.2 per cent in 2024 from 6.8 per cent previously, while growth for 2025 is pegged at 6.6 per cent versus 6.4 per cent. It said ‘These forecast changes assume strong broad-based growth and we recognize potentially higher forecasts if the cyclical momentum, especially for private consumption, gains more traction’.

The agency noted that both industrial and services sectors have demonstrated strong performance, with the services PMI consistently above 60 since the start of the year. It added ‘Household consumption is poised to grow as headline inflation eases toward the RBI's target. Indeed, signs of a revival in rural demand are already emerging, on the back of improving prospects for agricultural output amid above-normal rainfall during the monsoon season’.

The agency also said it expects the capex cycle to gain more steam amid rising capacity utilization, upbeat business sentiment and the government's continued thrust on infrastructure spending. It said over the medium- and longer-term, India's growth prospects depend on how well the country can productively tap its substantial pool of labour. It further said ‘While employment generation and skill development are government priorities, the extent to which India reaps a demographic dividend will depend on whether and how well these policies succeed’. It said ‘Nevertheless, 6 per cent-7 per cent growth should be possible purely on the basis of present conditions.’

The CNX Nifty is currently trading at 25234.15, up by 82.20 points or 0.33% after trading in a range of 25205.55 and 25258.80. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 2.43%, BPCL up by 1.39%, Titan Company up by 1.36%, JSW Steel up by 1.32% and Power Grid up by 1.23%. On the flip side, Tata Motors down by 1.22%, LTIMindtree down by 0.76%, Shriram Finance down by 0.61%, Bajaj Auto down by 0.59% and Tech Mahindra down by 0.30% were the top losers.

All Asian markets are trading higher; Hang Seng jumped 346.72 points or 1.91% to 18,133.04, Nikkei 225 surged 209.9 points or 0.54% to 38,572.43, Taiwan Weighted advanced 64.48 points or 0.29% to 22,266.33, Shanghai Composite strengthened 37.78 points or 1.32% to 2,860.89, Jakarta Composite gained 28.71 points or 0.37% to 7,656.31, Straits Times rose 20.87 points or 0.61% to 3,425.34 and KOSPI was up by 14.81 points or 0.55% to 2,677.09.