IGI Logo

Indian equity benchmarks extended up move for yet another session and gained over half a percent on Wednesday. Sensex past the psychological 60,000-mark and Nifty inched towards 18000 level on the back of softening inflation and strong FII buying in the current month. After the flat start, the benchmarks gradually inched higher as the day progressed, as traders took some encouragement as State Bank of India's (SBI) Chairman Dinesh Khara said that things might get better on the inflation front towards the end of September. He said the supply side constraints getting addressed and crude oil prices trending low will help ease the situation. Some support also came in as Moody's Analytics in a recent report on the Asia Pacific (APAC) region said global oil prices are expected to fall to almost $70 per barrel by the end of 2024.

Domestic sentiments remained optimistic in late afternoon deals, amid a private report stating that companies in India are expected to give a salary hike of 10 per cent in 2023 as they struggle with rising attrition in the tight labour market. Some comfort also came as the UK India Business Council sees opportunities for trade, investment, and collaboration with India across financial technology (fintech), food and beverage, electric vehicle (EV), and other sectors. Traders took a note of a private report that the UK India Business Council sees opportunities for trade, investment, and collaboration with India across financial technology (fintech), food and beverage, electric vehicle (EV), and other sectors. Meanwhile, another private report stated that the Goods and Services Tax (GST) Council may make rate changes in some services or products and withdraw some exemptions in a bid to correct instances of inverted duty.

On the global front, Asian markets settled mostly higher on Wednesday amid bets that central banks will be less aggressive with rate hikes in the coming months. The upside was limited as investors awaited the release of minutes of the U.S. Federal Reserve's latest policy meeting later in the day for clues on future interest-rate hikes. European markets were trading lower amid inflation worries after data showed British consumer price inflation jumped to 10.1 percent in July, its highest since February 1982, intensifying the squeeze on households. Separately, preliminary data from Eurostat revealed that growth in the Eurozone slowed slightly in the second quarter.

Back home, gold jewellery stocks were in focus as Icra in its report stated that gold jewellery demand in India is likely to decline in the second and third quarters of this fiscal due to hike in import duty, high volatility in prices and inflationary pressure. Telecom stocks also were in watch as rating agency Crisil said that with the closure of the fifth generation (5G) telecom auctions, India has joined a select list of 70 countries with 5G technology offerings. However, it said 5G rollout faces a host of challenges-among others, a lack of use cases, costly handsets, and potential rollout at a premium that will limit 5G revenue to single digit share of total revenue by fiscal 2026.

Finally, the BSE Sensex rose 417.92 points or 0.70% to 60,260.13 and the CNX Nifty was up by 119.00 points or 0.67% to 17,944.25.

The BSE Sensex touched high and low of 60,323.25 and 59,857.80, respectively. There were 23 stocks advancing against 7 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.64%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were Telecom up by 1.80%, TECK up by 1.13%, Consumer Durables up by 1.10%, IT up by 1.04% and Utilities up by 0.80%, while Auto down by 0.32% and Capital Goods down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 5.74%, Bajaj Finance up by 3.28%, Bharti Airtel up by 2.55%, Tech Mahindra up by 2.45% and HCL Technologies up by 2.22%. On the flip side, Mahindra & Mahindra down by 1.07%, Ultratech Cement down by 0.65%, Maruti Suzuki down by 0.58%, Tata Steel down by 0.44% and Kotak Mahindra Bank down by 0.33% were the top losers.

Meanwhile, Moody's Analytics in its recent report on the Asia Pacific (APAC) region has stated that global oil prices are likely to fall to almost $70 per barrel by the end of 2024. Indicating the increase in oil prices to $120/barrel in June after Russia's invasion of Ukraine and its fall to $100/barrel in August it said ‘this trend will continue; we expect crude prices to fall to almost $70 a barrel by the end of next year’. It noted that ‘for the APAC region's big oil importers, notably Singapore and Hong Kong, this will ease pinching price pressures’. According to Moody's Analytics, the impact of oil price increase has been varied for the APAC region.

As per the report, ‘for net energy importers such as Thailand, Japan, South Korea and Singapore, household energy bills have risen sharply. But for the region's key energy exporters, Indonesia, Malaysia and Australia, households have been more sheltered’. But coal and natural gas prices remain stubbornly high. The APAC region's big liquified natural gas (LNG) importers, including Japan, South Korea, Taiwan and China, are particularly vulnerable to sticky prices. Likewise, with coal prices elevated, big importers, including India, Pakistan and Vietnam, are paying more for what they need.

It said although higher commodity prices are hurting households and adding to global inflation pressures, some APAC exporters are benefiting from the price premium. Indonesia and Malaysia are the region's big oil exporters. Higher crude prices have given each an export price boost. Likewise, it added Australia is in the midst of an export boom, with elevated coal and LNG prices pushing its terms of trade to a record high. That's not only helping Australian firms tied to mining, but also government revenue through company profit tax receipts and royalties. Conversely, it also said energy importers such as South Korea and Japan have seen their import prices jump far more than their exports, resulting in a collapse in their terms of trade.

The CNX Nifty traded in a range of 17,965.95 and 17,833.35. There were 33 stocks advancing against 17 stocks declining on the index. 

The top gainers on Nifty were Bajaj Finserv up by 5.59%, HDFC Life Insurance up by 3.43%, Hero MotoCorp up by 3.20%, Bajaj Finance up by 3.07% and Bharti Airtel up by 2.77%. On the flip side, Apollo Hospital down by 1.09%, Tata Motors down by 1.06%, Mahindra & Mahindra down by 1.04%, Maruti Suzuki down by 0.81% and Cipla down by 0.73% were the top losers

European markets were trading lower; UK’s FTSE 100 decreased 30.49 points or 0.4% to 7,505.57, France’s CAC fell 34.72 points or 0.53% to 6,557.86 and Germany’s DAX was down by 134.80 points or 0.97% to 13,775.32.

Asian markets settled mostly higher on Wednesday amid expectations that US Fed would be less aggressive on its tightening plans. Meanwhile, investors are awaiting the release of minutes of the US Federal Reserve's latest policy meeting later in the day for clues on future interest-rate hikes. Japanese shares led regional gains due to weakness in Japanese yen and also tracking robust earnings from US retailers. Data showed Japan's core machinery orders rose 0.9% in June from the previous month. Chinese shares gained after policymakers announced a slew of stimulus measures to boost economic growth, including increased debt issuances and infrastructure spending.

Above views are of the author and not of the website kindly read disclaimer