Sensex, Nifty trade higher; RBI rate decision eyed

Indian equity benchmarks made positive start on Wednesday tracking overnight gains on Wall Street as well as sharp fall in crude oil prices. Crude oil futures fell more than 4 per cent on Tuesday as the rally spurred by heightened geopolitical risk slowed, with the market awaiting Israel's response to Iran. Sensex and Nifty are trading higher with decent gains in early deals as investors are looking ahead to the RBI monetary policy committee decision announcement scheduled for 10 AM by the Reserve Bank of India Governor Shaktikanta Das. The Indian central bank governor is likely to announce a hold on interest rates at current levels, but his commentary on inflation expectations and GDP growth estimates is what investors will be eyeing. Market participants react positively to the Assembly election results announced on Tuesday, where the Bharatiya Janata Party (BJP) successfully returned to power for a third consecutive term in Haryana, achieving its best-ever vote share and seat tally. 

On the global front, Asian markets are trading mixed, following the broadly positive cues from Wall Street overnight, as traders are cautious ahead of the release of key US inflation data and the Fed's latest meeting minutes later in the week for additional clues on the Fed's interest rate trajectory. They also look to pick up stocks at a bargain after the steep drop recently. The lack of concrete measures in China disappointed markets, given the numerous headwinds, from a prolonged housing crisis to sluggish consumption and local government debt. South Korea is closed for Hangul Day holiday.

Back home, stocks related to education sector remain in focus as a recent analysis by Crisil Ratings showed that schools and colleges in India are expected to report a 12 to 14 per cent rise in their revenue this financial year. This revenue growth is driven by higher enrolments, increased demand for new courses, and the opportunity for upward fee revisions. In stock specific development, SpiceJet traded with traction as the company plans to spend Rs 400 crore to bring back 36 grounded planes.

The BSE Sensex is currently trading at 81863.25, up by 228.44 points or 0.28% after trading in a range of 81692.46 and 81954.58. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 1.06%, while Small cap index was up by 1.35%.

The top gaining sectoral indices on the BSE were Realty up by 1.98%, Consumer discretionary up by 1.28%, Healthcare up by 1.26%, Power up by 1.07% and Industrials up by 1.05%, while FMCG down by 0.29% and Metal down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.35%, Tech Mahindra up by 1.88%, Bajaj Finance up by 1.80%, Maruti Suzuki up by 1.61% and SBI up by 1.53%. On the flip side, ITC down by 0.99%, Nestle down by 0.83%, HDFC Bank down by 0.61%, Kotak Mahindra Bank down by 0.50% and Hindustan Unilever down by 0.44% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has commended Indian financial sector regulators for doing a ‘world-class job’ and bringing greater transparency into the system. Underlining that she is not against questioning or critiquing regulators, Sitharaman said there is a need to be ‘extremely conscious’ about contributions made by them as well.

About competitive populism through freebie schemes, Sitharaman said there is a need to look at a state's financial ability to bear the burden of announcements for the welfare of the poor. She said that in some cases committed expenditure is going up to 80 per cent, whereas the development needs are being overlooked. She said that spending by the state governments on political promises should be based on the fiscal capacity of the concerned state. Making it clear that she was not against welfare measures, Sitharaman said ‘We cannot deny help to the poor for moving out of poverty’.

The minister thanked the digital investment platforms for doing a ‘great service’ for the country, which has helped ensure that middle-class Indians can take the risk by entering markets rather than comfortably sit by deploying the resources in low paying accounts. She also gave out a slew of data supporting the argument, including the surge in the number of demat accounts to 17.1 crore as of September 2024 from 2.31 crore in 2014. Sitharaman also exhorted banks to ensure that they do not practice either overlending, which can lead to asset quality stress or underlending, which can impact their profitability, underlining that the health of the banks actually determines the health of the economy and the financial health of households.

The CNX Nifty is currently trading at 25086.55, up by 73.40 points or 0.29% after trading in a range of 25041.15 and 25091.85. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 3.33%, Tata Motors up by 2.36%, Trent up by 2.16%, Bajaj Finance up by 1.88% and Tech Mahindra up by 1.84%. On the flip side, ONGC down by 1.70%, ITC down by 1.02%, Britannia Industries down by 0.93%, Nestle down by 0.88% and HDFC Bank down by 0.61% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 317.34 points or 0.81% to 39,254.88, Taiwan Weighted rose 208.61 points or 0.92% to 22,820.00 and Straits Times added 12.16 points or 0.34% to 3,587.85. On the other hand, Hang Seng declined 279.11 points or 1.33% to 20,647.68, Shanghai Composite weakened 184.94 points or 5.6% to 3,304.84 and Jakarta Composite was down by 10.85 points or 0.14% to 7,546.29.