Sensex, Nifty trade in fine-fettle in early deals on firm global cues

Indian equity benchmarks made optimistic start on Friday tracking gains across global markets as traders pulled forward expectations for the Federal Reserve's first interest-rate cut by a month to November. Sensex and Nifty are trading in fine-fettle with gains of around half a percent each in early deals. Bajaj Finance and Bajaj Finserv are leading on the bourses. Sentiments got boost as the Organisation for Economic Co-operation and Development (OECD) raised its growth forecast for India by 40 basis points to 6.6 per cent for 2024-25, holding that buoyant public investment and improved business confidence are expected to propel India’s gross domestic product (GDP) growth. Meanwhile, economic think tank GTRI in its report said India's imports of electronics, telecom, and electrical products soared to $89.8 billion in 2023-24 and over half of these imports are sourced from China and Hong Kong. 

On the global font, Asian markets are trading higher, following the broadly positive cues from Wall Street overnight, as traders had expressed some concerns the US Fed's next monetary policy move could actually be an interest rate hike rather than a cut, but Fed Chair Jerome Powell post-meeting alleviated those worries. Powell said the next rate move from the central bank will most likely be an interest rate reduction. Meanwhile, the Japanese stock market is closed for Constitution Memorial Day holiday and China market remains closed for Labor Day.

Back home, coal industry stocks are in focus as India's domestic coal production rose 7.41 per cent to 78.69 million tonnes (MT) in April. The country's coal output was 73.26 MT in the corresponding month of the previous fiscal year. In stock specific development, Bajaj Finance soared after the Reserve Bank of India lifted restrictions on its lending products.

The BSE Sensex is currently trading at 74971.43, up by 360.32 points or 0.48% after trading in a range of 74937.70 and 75095.18. 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 0.48%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Metal up by 0.95%, Power up by 0.92%, Utilities up by 0.77%, Basic Materials up by 0.76% and PSU up by 0.73%, while TECK down by 0.06% was the sole losing index on BSE.

The top gainers on the Sensex were Bajaj Finance up by 7.08%, Bajaj Finserv up by 4.40%, NTPC up by 1.69%, Tata Steel up by 1.49% and ICICI Bank up by 1.05%. On the flip side, Bharti Airtel down by 0.92%, Larsen & Toubro down by 0.46%, Maruti Suzuki down by 0.43%, Tech Mahindra down by 0.28% and Nestle down by 0.15% were the top losers.

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) in its latest Economic Outlook report has projected India’s Gross Domestic Product (GDP) to grow at 7.8 per cent in the just-concluded financial year 2023-24 and the forecast is for around 6.6 per cent in each of the following two fiscal years (FY25 and FY26). However, global near-term developments pose obstacles to higher growth. It has said India’s domestic demand will be driven by gross capital formation, particularly in the public sector, with private consumption growth remaining sluggish. OECD is a group of 37 member countries that discuss and develop economic and social policy.

In the report, OECD asserted that exports will continue to grow, especially of services such as information technology and consulting where India will continue to increase its global market share, supported by foreign investment. It added headline inflation will decline gradually, although uncertainty about food inflation remains elevated. In India, consumer price index (CPI) inflation was 4.9 per cent in March after averaging 5.1 per cent in the preceding two months, following the recent peak of 5.7 per cent in December 2023.

Retail inflation in India is in RBI’s two-six per cent comfort level but is above the ideal 4 per cent scenario. Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory quite well. The Indian central bank’s monetary policy, the OECD report said that the monetary policy easing is projected to start in the second half of the year once lower inflation is maintained. 

The report said ‘Assuming a normal monsoon season and no other supply shocks that may de-anchor inflation expectations, a first cut of the policy rate is projected in late 2024, with cumulative cuts of up to 125 basis points implemented before March 2026. The RBI will only switch the stance to neutral during 2025’. Further, the report suggested that India needs to achieve a higher level of real GDP growth to address the country’s multiple development challenges, especially job creation.

The CNX Nifty is currently trading at 22769.80, up by 121.60 points or 0.54% after trading in a range of 22754.00 and 22794.70. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 7.02%, Bajaj Finserv up by 4.47%, ONGC up by 2.76%, Shriram Finance up by 1.97% and NTPC up by 1.87%. On the flip side, Bharti Airtel down by 0.81%, Hero MotoCorp down by 0.77%, HDFC Life Insurance down by 0.60%, Maruti Suzuki down by 0.56% and Larsen & Toubro down by 0.49% were the top losers.

Asian markets are trading in green; Hang Seng jumped 199.89 points or 1.1% to 18,407.02, Taiwan Weighted surged 155.57 points or 0.77% to 20,378.01, Straits Times rose 14.01 points or 0.42% to 3,310.90, Jakarta Composite gained 10.76 points or 0.15% to 7,128.19 and KOSPI was up by 6.52 points or 0.24% to 2,690.17.