IGI Logo

Indian equity benchmarks continued their winning momentum for the fifth consecutive day and settled with gains of over half percent on Thursday led by gains in telecom, capital goods and industrials stocks. After making cautious start, key gauges soon gained traction to trade in green, as traders took support with former Niti Aayog Vice Chairman Arvind Panagariya’s statement that Indian economy, which has grown fairly rapidly in the last 17 years, will grow at 7-8 per cent in the next couple of decades. Some support also came as rating agency ICRA’s report stated that the growth in assets under management (AUM) of non-banking financial companies (NBFCs) and housing finance companies (HFCs) is likely to be at 9-11 per cent in FY23 compared to a rise of 9.5 per cent in the last fiscal. Adding more optimism, Foreign Institutional Investors (FII) remained net buyers for the third day straight on Dalal Street on Wednesday. FIIs pumped in Rs 1,780 crore into domestic stocks.

However, in the late afternoon deals, key gauges trimmed most of their gains as traders got anxious with a private report stating that India’s economic activity showed early signs of cooling off in June as acute price pressures, rising interest rates, and a falling rupee dampened sentiment after a strong showing the previous month. But, markets regained traction to end higher taking support from Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen. He attributed depreciation in rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve. Additional support also came after the labor ministry indicated that retirement fund body EPFO added 16.82 lakh, new subscribers, in May 2022, nearly 83 percent more than 9.2 lakh enrolled in the year-ago month.

On the global front, European markets were trading mostly in red as investors braced for the interest-rate decision from the European Central bank. The central bank is set to raise interest rates for the first time in 11 years and provide guidance on the proposed anti-fragmentation tool. Asian markets ended mixed on Thursday following the broadly positive cues from Wall Street, as worries about economic slowdown, inflation and rate hike concerns continued to weigh on the market. Traders are also cautious ahead of the monetary policy announcements by the Bank of Japan and the European Central Bank later in the day.

Back home, stocks related to metal industry were in limelight as Union Minister Faggan Singh Kulaste said the exports of finished steel from India jumped over 25 per cent to 13.49 million tonne (MT) in 2021-22. During the preceding 2020-21 fiscal, the exports stood at 10.78 MT. Sugar stocks were in focus with a private report that India may allow sugar mills to export more than previously permitted to help them prevent contract defaults. Realty sector stocks also were in watch with report that the sentiment index for the real estate sector dropped in April-June period due to increase in interest rate on home loans but remained positive. The outlook for next six months is optimistic although not as buoyant as it was during the March quarter.

Finally, the BSE Sensex rose 284.42 points or 0.51% to 55,681.95 and the CNX Nifty was up by 84.40 points or 0.51% to 16,605.25. 

The BSE Sensex touched high and low of 55,738.49 and 55,270.75, respectively. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.24%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Telecom up by 2.16%, Capital Goods up by 2.08%, Industrials up by 1.45%, Oil & Gas up by 1.32%, Power up by 1.24% while, Healthcare down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 7.88%, Bajaj Finance up by 3.27%, Bajaj Finserv up by 2.52%, Asian Paints up by 1.91% and Larsen & Toubro up by 1.58%. On the flip side, Dr. Reddy's Lab down by 1.89%, Tech Mahindra down by 1.32%, Kotak Mahindra Bank down by 1.05%, Reliance Industries down by 0.56% and HDFC Bank down by 0.34% were the top losers.

Meanwhile, Former Niti Aayog Vice Chairman Arvind Panagariya has said that Indian economy, which grown fairly rapidly in the last 17 years, will grow at 7-8 per cent in the next couple of decades. He noted that the country's economy grew 7.4 per cent between 2014-15 to 2019-20.

On GST, Panagariya said ‘we should get to two GST rates (structure).... Also, we need to prune the GST exemption list’. A nationwide Goods and Services Tax (GST), which subsumed 17 local levies like excise duty, service tax and VAT and 13 cesses, was rolled out in July 2017. Under GST, a four-rate structure that exempts or imposes a low rate of tax of 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent.

On certain experts and politicians comparing the current situation in Sri Lanka, which is facing an economic crisis, with that of India, he said ‘it is nonsense to compare the current economic situation in Sri Lanka with India. India is a very stable economy’.

The CNX Nifty traded in a range of 16,626.95 and 16,483.90. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 8.10%, Bajaj Finance up by 3.29%, Tata Consumer Product up by 2.96%, UPL up by 2.89% and Larsen & Toubro up by 2.63%. On the flip side, Dr. Reddy's Lab down by 1.90%, SBI Life Insurance down by 1.35%, Kotak Mahindra Bank down by 1.24%, Cipla down by 1.17% and Reliance Industries down by 0.68% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 29.07 points or 0.4% to 7,235.24 and Germany’s DAX decreased 36.45 points or 0.27% to 13,245.53, while France’s CAC increased 28.19 points or 0.46% to 6,212.85.

Asian markets ended mixed on Thursday on persisting concerns about the Chinese economy, while softening crude oil prices helped ease inflation worries. Markets are eagerly awaiting the ECB meeting where an interest rate hike is expected for the first time in more than a decade. Chinese and Hong Kong markets were declined with concerns over strict Covid lockdowns and waning confidence in China's property market. Japanese shares gained after the central bank BOJ kept interest rates on hold.

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