Sensex, Nifty magnify opening gains to trade in fine-fettle in early deals

Indian equity benchmarks made an optimistic start on Tuesday amid improving global cues as President Donald Trump indicated a softer approach to levying reciprocal tariffs, even as he threatened tariffs on more sectors. Sensex and Nifty soon magnify their gains and are trading in fine-fettle in early deals on the back of value buying. Some support came as an IMF report said that the Indian financial system has become more resilient and diverse, driven by rapid economic growth and withstood the pandemic well. Besides, the Indian rupee opened stronger for the 10th straight session, as renewed foreign inflows offset a slight rise in the Dollar Index and crude oil prices. Foreign investors remained net buyers of Indian equities for a third straight day on Monday and bought shares to the extent of Rs 3,055.76 crore, as per provisional data.

On the global front, Asian markets are trading mixed as minutes from the central bank's January 23-24 meeting revealed that members of the Bank of Japan's Monetary Policy Committee believe that the country's prices and economic activity are in line with expectations. Meanwhile, US President Donald Trump said he will in the very near future announce tariffs on automobiles, aluminum and Pharmaceuticals. Trump said the United States would need all those products if there were problems including wars. Back home, in stock specific development, HCL Technologies rallied after forming a strategic partnership with Western Union.

The BSE Sensex is currently trading at 78652.71, up by 668.33 points or 0.86% after trading in a range of 78085.53 and 78685.10. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.37%, while Small cap index was down by 0.22%.

The top gaining sectoral indices on the BSE were IT up by 2.09%, TECK up by 1.64%, Power up by 0.82%, Capital Goods up by 0.76% and Bankex up by 0.61%, while Healthcare down by 0.31%, Consumer Durables down by 0.29%, Metal down by 0.27%, Telecom down by 0.04% and Energy down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 3.30%, Ultratech Cement up by 2.94%, Bajaj Finserv up by 2.57%, Infosys up by 2.31% and TCS up by 1.88%. On the flip side, Indusind Bank down by 1.72%, Eternal down by 1.37%, Asian Paints down by 0.21%, Tata Steel down by 0.19% and Reliance Industries down by 0.15% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest report has said that the Indian financial system has become more resilient and diverse, driven by rapid economic growth and withstood the pandemic well. The Financial Sector Assessment Program (FSAP), a joint programme of the IMF and the World Bank (WB), undertakes a comprehensive and in-depth analysis of a country's financial sector. IMF has released the latest India-FSSA report, based on the assessment carried out during 2024, while WB's Financial Sector Assessment (FSA) report is due for publication.

The IMF report said that since the last FSAP in 2017, India's financial system has become more resilient and diverse, driven by rapid economic growth. It said ‘The system recovered from the distress episodes of the 2010s and withstood the pandemic well. NBFIs and market financing have grown, making the financial system more diverse and interconnected. State-owned financial institutions' share remains significant’. It further said that stress tests show that the main lending sectors are broadly resilient to macrofinancial shocks, despite some weak tails. Banks and NBFCs have sufficient aggregate capital to support moderate lending even in severe macro-financial scenarios.

The report said ‘But several banks, particularly PSBs, may need to strengthen their capital base to support lending in such situations. Weak tails comprise a few non-systemic NBFCs and urban cooperative banks (UCBs) that report below minimum or negative capital even in the baseline. Vulnerability to short-term liquidity stress is generally contained’. On regulation and supervision of NBFCs, the IMF acknowledged India's systematic approach to prudential requirements of NBFCs with the scale-based regulatory framework. IMF appreciated India's approach to the introduction of a bank-like Liquidity Coverage Ratio (LCR) for large NBFCs. IMF also acknowledged that the regulatory framework in securities markets has been enhanced in line with international practice to manage and prevent emerging risks. Notable improvements include establishing the Corporate Debt Market Development Fund (CDMDF). 

The report observed that India's insurance sector is strong and growing, with a significant presence in both life and general insurance. The sector has remained stable, supported by better regulations and digital innovations. IMF also analysed cyber security frameworks in the banking sector, financial market infrastructure (FMI), critical information systems, and other relevant players in the securities market. It found that Indian authorities have advanced cybersecurity risk oversight, especially for banks. However, it stated that extensive cybersecurity crisis simulations and stress tests for banks could be expanded for cross-sectoral and market-wide events to further strengthen cybersecurity resilience.

The CNX Nifty is currently trading at 23845.25, up by 186.90 points or 0.79% after trading in a range of 23664.90 and 23852.85. There were 34 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Ultratech Cement up by 3.04%, HCL Technologies up by 3.03%, Bajaj Finserv up by 2.46%, TCS up by 2.17% and Infosys up by 2.16%. On the flip side, Dr. Reddy's Lab down by 2.32%, Indusind Bank down by 1.70%, Shriram Finance down by 1.11%, Hindalco down by 1.08% and Bajaj Auto down by 0.85% were the top losers.

Asian markets are trading mixed; Taiwan Weighted surged 172.48 points or 0.77% to 22,279.12, Nikkei 225 rose 147.89 points or 0.39% to 37,756.38, Jakarta Composite gained 43.75 points or 0.71% to 6,204.97 and Straits Times added 31.46 points or 0.79% to 3,967.79. On the other hand, Hang Seng declined 517.7 points or 2.21% to 23,387.86, KOSPI dropped 10.94 points or 0.42% to 2,621.13 and Shanghai Composite was down by 5.98 points or 0.18% to 3,364.05.