Sensex, Nifty trade in fine fettle on firm global cues

Indian equity benchmarks made optimistic start on Friday tracking overnight gains on Wall Street as well as firm trade in Asian counterparts, as concerns about the world's largest economy slipping into a recession eased after data released showed a bigger than expected drop in first-time claims for U.S. unemployment benefits last week. This also raised the prospects of a series of interest rate cuts in the upcoming months. Singapore market is closed for the National Day holiday. Closer home, Sensex and Nifty are trading in fine fettle with gains of over a percent in early deals with auto and IT stocks taking lead amid value buying. Some support came as the Reserve Bank of India said India's current account deficit (CAD)- excess of imports of goods and services over exports, would be manageable. 

On the sectoral front, logistic stocks are in focus as Union Minister Nitin Gadkari said India's logistics cost will come down to 9 per cent of GDP by April next year. Gadkari further said the country's exports will also increase when the logistics cost comes down to single digit. In stock specific development, Eicher Motors zoomed on strong Q1 numbers.

The BSE Sensex is currently trading at 79839.55, up by 953.33 points or 1.21% after trading in a range of 79549.09 and 79984.24. All the 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.22%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were Auto up by 1.95%, Realty up by 1.82%, IT up by 1.74%, Power up by 1.69% and TECK up by 1.65%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Tata Motors up by 3.76%, Mahindra & Mahindra up by 2.48%, Tech Mahindra up by 2.34%, HCL Tech. up by 2.25% and NTPC up by 2.01%.

Meanwhile, the Governor Shaktikanta Das has said the Reserve Bank of India (RBI) cannot ignore food inflation while formulating the monetary policy. His comments come amid suggestions for excluding food inflation while setting benchmark interest rates. He said that the weightage of food in the overall consumer price inflation, which stands at 46 per cent currently, was done in 2011-12, and needs to be revisited, and added that analysis work is going on by the National Statistical Office (NSO).

In his policy review statement, Das said ‘The MPC (monetary policy committee) may look through high food inflation if it is transitory; but in an environment of persisting high food inflation, as we are experiencing now, the MPC cannot afford to do so’. He added ‘It (MPC) has to remain vigilant to prevent spillovers or second round effects from persistent food inflation and preserve the gains made so far’.

He said the current CPI basket is based on 2011-12 data and the review could not be undertaken because of the Covid pandemic. He said the RBI is in regular touch with the government on the supply side response to inflation, and also discusses flood and heavy rainfall. He said while high rainfall in a district of Kerala and parts of Himachal Pradesh will lead to some impact on prices, overall the monsoon is 7 per cent higher than the long period average and will have a positive impact on the food inflation.

The CNX Nifty is currently trading at 24415.00, up by 298.00 points or 1.24% after trading in a range of 24315.90 and 24419.75. There were 46 stocks advancing against 3 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Eicher Motors up by 4.32%, Tata Motors up by 3.68%, ONGC up by 3.07%, LTIMindtree up by 2.50% and Mahindra & Mahindra up by 2.41%. On the flip side, BPCL down by 1.03%, Cipla down by 0.09% and HDFC Life Insurance down by 0.01% were the few losers.

Asian markets are trading in green; Taiwan Weighted jumped 687 points or 3.29% to 21,557.10, Hang Seng surged 299.6 points or 1.74% to 17,191.43, Nikkei 225 rose 272.13 points or 0.78% to 35,103.28, Jakarta Composite gained 52.8 points or 0.73% to 7,247.92, KOSPI increased 32.37 points or 1.27% to 2,589.10 and Shanghai Composite added 3.57 points or 0.12% to 2,873.47.