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Key gauges rise for 3rd straight session; Nifty tops 17,800 mark
Aug-16-2022

Indian equity benchmarks continued winning run for the third straight session and settled with gains of over half percent each on Tuesday, led by gains in Auto, Realty and Oil & Gas stocks amid positive global cues. The benchmarks witnessed a gap up opening and continued to hover in the positive range throughout the session, as sentiments got boost on private report stating that during the April-July period, the central government achieved more than a third of the direct tax collection for this financial year as personal tax collection exceeded corporation tax mop-up amid tightened enforcement and compliance measures. Overall direct tax collections, net of refunds, including corporation and personal income tax, grew by 40 per cent in the first four months of FY23 to Rs 5 trillion, which is nearly 35 per cent of the target of Rs 14.2 trillion for the whole fiscal year. Sentiments remained positive as the Income Tax Department said tax collected on income of companies surged by 34 per cent in the first four months of the current fiscal that began in April, indicating that a simplified tax regime with low rates is yielding results.

Sentiments remained upbeat in late afternoon deals as India’s inflation based on wholesale price index (WPI) eased to 13.93% in the month of July 2022 as against 15.18% in June, as prices of food articles, nonfood articles and crude petroleum & natural gas declined. Sector wise, Oil & Gas industry remain in focused, as diesel demand in India fell for the second month in a row as the onset of monsoon chipped away consumption in key sectors like agriculture. Some support also came as the commerce ministry is proposing a host of direct and indirect incentives such as deferral of import duties and exemption from export taxes to revamp Special Economic Zones through a new legislation. Traders also took a note of Former RBI Governor D Subbarao’s statement that India may become a $5 trillion economy by 2028-29 only if the GDP grows at nine per cent per annum consistently for the next five years. He said there are eight key challenges for India to overcome to achieve the dream of $5 trillion economy.

On the global front, European markets were trading higher amid expectations that Chinese policymakers would roll out more stimulus measures to boost sagging economic growth. Investors shrugged off the latest ZEW survey results showing that economic sentiment continued to deteriorate in the euro area and in Germany. Asian markets settled mostly higher on Tuesday following the positive cues from global markets, amid recent soft inflation data that raised speculation the US Fed might slow down the pace of monetary tightening. Traders looked ahead to the Fed minutes, due out on Wednesday, for clues about the pace of rate hikes in the future.

Back home, aviation industry stocks were action as Civil Aviation Minister Jyotiraditya Scindia said that the dip in the air turbine fuel (ATF) price and the continuation of this trend will benefit the aviation sector. He said the fall in the ATF rates will have a good impact on airlines under pressure. There were some buzz in FMCG stocks on report that inflationary pressure on some raw material inputs for the FMCG industry is abating but the manufacturers expect its impact on price and margins to continue in the current quarter.

Finally, the BSE Sensex rose 379.43 points or 0.64% to 59,842.21 and the CNX Nifty was up by 127.10 points or 0.72% to 17,825.25.

The BSE Sensex touched high and low of 59,923.03 and 59,673.96, respectively. There were 25 stocks advancing against 5 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 1.03%, while Small cap index was up by 1.03%.

The top gaining sectoral indices on the BSE were Auto up by 2.57%, Realty up by 2.03%, Oil & Gas up by 1.76%, Consumer Discretionary up by 1.58% and Power up by 1.48%, while Telecom down by 0.19% and Metal down by 0.17% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.28%, Maruti Suzuki up by 2.19%, Asian Paints up by 2.09%, Hindustan Unilever up by 1.90% and Ultratech Cement up by 1.29%. On the flip side, SBI down by 0.90%, Bharti Airtel down by 0.85%, Bajaj Finance down by 0.26%, TCS down by 0.20% and NTPC down by 0.03% were the top losers.

Meanwhile, former RBI Governor D Subbarao has said India may become a USD five trillion economy by 2028-29 only if the GDP grows at nine per cent per annum consistently for the next five years. He said there are eight key challenges for India to overcome to achieve the dream of $5 trillion economy.

According to him, the challenges are increasing investment, improving productivity and education and health outcomes, creating jobs, raising agriculture productivity, maintaining macroeconomic stability, managing global mega trends and improving governance.

Further, Subba Rao said Modi government triggered a debate on State subsidies and all political parties are at fault for the situation. He cautioned that the States and union government must realise that, the country does not have surplus budgets and while some safety net is surely needed. They must be cautious and selective on what freebies to be given from borrowed money and the future generations should not be burdened with unnecessary debt burden.

The CNX Nifty traded in a range of 17,839.10 and 17,764.05. There were 42 stocks advancing against 8 stocks declining on the index. 

The top gainers on Nifty were HDFC Life Insurance up by 4.78%, Adani Ports &SEZ up by 4.65%, Eicher Motors up by 3.95%, BPCL up by 3.70% and Maruti Suzuki up by 3.37%. On the flip side, Grasim Industries down by 1.86%, Hindalco down by 1.80%, JSW Steel down by 0.84%, Bharti Airtel down by 0.80% and SBI down by 0.77% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 42.39 points or 0.56% to 7,551.54, France’s CAC increased 23.80 points or 0.36% to 6,593.75 and Germany’s DAX increased 85.09 points or 0.62% to 13,901.70.

Asian markets settled mostly higher on Tuesday, tracking Wall Street gains overnight with expectations that moderating inflation would help the US central bank to slow the pace of interest-rate hikes from next monetary policy meetings. Chinese shares gained marginally after the Chinese central-bank said China still needs more growth policies to stabilize its economy following the PBoC’s unexpected cut of key interest rates for the first time since January. Hong Kong shares declined as the audit watchdog widened investigation into China Evergrande Group's financial reporting. Meanwhile, weaker-than-expected Chinese economic data released yesterday too pressurized market sentiments. China’s Retail sales grew by 2.7% in July from a year ago, that’s well below an expected rise of 5.3% and down from 3.1% growth in June. While, Industrial production was up 3.8% year-on-year, but down from 3.9% in June and well below forecasts.

Asian Indices

Last Trade               

Change in Points

Change in %   

Shanghai Composite

3,277.881.790.05

Hang Seng

19,830.52-210.34-1.05

Jakarta Composite

7,133.4540.170.57

KLSE Composite

1,518.7814.770.98

Nikkei 225

28,868.91-2.87-0.01

Straits Times

3,253.79-3.03-0.09

KOSPI Composite

2,533.525.580.22

Taiwan Weighted

15,420.573.220.02
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