Dalal Street holds gaining momentum in early noon

The Dalal Street held gaining momentum in early afternoon deals, with both Sensex and Nifty garnering strong gains, aided by positive cues from other Asian markets, as investors continued to cheer the Federal Reserve's half-a-percentage point interest rate cut on Wednesday, and digesting the policy moves of the Bank of Japan, the Chinese central bank. Traders were positive, amid reports that John Chambers, who heads the India US Strategic Partnership Forum and is Chairman Emeritus of CISCO is highly optimistic about the future of the Indian economy, the current share market situation and the growth of innovation in the country. Further, Finance Minister Nirmala Sitharaman has said that the banking sector will have to play a crucial role in driving the agenda of making India a developed nation or Viksit Bharat by 2047. She also said banks will be required to give strong momentum to the infrastructure sector, ensure the availability of need-based funding to MSMEs, bring unbanked population under the ambit of formal banking channels, and help increase insurance penetration. 

On the global front, Asian markets were trading mostly in green, although China retained its benchmark lending rates on Friday even after the US Federal Reserve reduced its rate by a sharper-than-expected half a percentage point this week. The People's Bank of China kept its one-year loan prime rate unchanged at 3.35 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 3.85 percent. The bank had last reduced the LPR in July, by 10 basis points.

The BSE Sensex is currently trading at 84167.78, up by 982.98 points or 1.18% after trading in a range of 83187.64 and 84248.69. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.74%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were Metal up by 2.00%, Auto up by 1.91%, Capital Goods up by 1.51%, Industrials up by 1.44% and Consumer discretionary up by 1.38%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.70%, JSW Steel up by 3.34%, Maruti Suzuki up by 2.49%, Larsen & Toubro up by 2.10% and Adani Ports & SEZ up by 1.86%. On the flip side, TCS down by 0.59% and NTPC down by 0.47% were the only losers.

Meanwhile, credit rating agency Crisil in its latest report has said that a fall in the prices of crude oil, which is one of India's top export items, is impacting oil exports, leading to a contraction in the country's overall exports in August. The report further highlighted that imports have surged faster than exports, contributing to a broader trade deficit.  According to the report, while the fiscal year commenced positively with merchandise exports growing steadily in the first quarter, growth slowed by July and August, resulting in a contraction. Factors like container shortages have disrupted major trade routes, exacerbating the decline.

The rating agency further said that in addition to these challenges, the US has announced plans to increase tariffs on Chinese goods, further affecting global trade flows. The report said that the situation involving US tariffs on Chinese goods is a key concern, as it is expected to have a broader impact. The slowdown in China's economy may also be leading to an increase in Chinese exports being dumped in the Asian market, including India.

For example, the report noted a significant rise in the import of steel from China and Vietnam in recent months, which could further widen India's merchandise trade deficit. Despite these challenges, the report pointed out that there are positive factors that could help offset the growing trade deficit. India's services trade continues to show a surplus, and the country is experiencing strong inflows of remittances from overseas workers. These factors offer some comfort and are expected to help maintain India's current account in a stable position, even as the merchandise trade deficit increases.

The CNX Nifty is currently trading at 25703.60, up by 287.80 points or 1.13% after trading in a range of 25426.60 and 25726.65. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.68%, Eicher Motors up by 3.71%, JSW Steel up by 3.21%, Coal India up by 2.94% and Maruti Suzuki up by 2.42%. On the flip side, TCS down by 0.57%, Grasim Industries down by 0.51%, NTPC down by 0.50%, Cipla down by 0.45% and Bajaj Finance down by 0.15% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 197.62 points or 1.09% to 18,210.78, Shanghai Composite strengthened 2.62 points or 0.1% to 2,738.64, KOSPI increased 12.57 points or 0.48% to 2,593.37, Nikkei 225 surged 568.58 points or 1.51% to 37,723.91 and Taiwan Weighted added 116.73 points or 0.53% to 22,159.42, while Jakarta Composite plunged 113.21 points or 1.45% to 7,792.18 and Straits Times fell 11.98 points or 0.33% to 3,621.20.