Sensex Today: Equity benchmark indices extended gains in Friday’s intra-day trade as investors hoped that the US debt limit deal will soon be reached. After slim opening gains, the BSE Sensex gained steam and surged 629 points to close at 62,502. The NSE Nifty edged 178 points higher to end at 18,499.
The foreign investors continued to buy in local equities with over $5.34 billion since the start of April. So far In May, both Sensex and Nifty rose 2.3 per cent each while BSE MidCap and SmallCap 4.5 per cent each.
Among stocks, index heavyweight RIL gained 2 per cent after Reliance Retail completed the acquisition of 51 per cent stake in Lotus Chocolate for Rs 74 crore.
Sectorally, IT, Metal and PSB indices gained most, while Pharma pocket underperformed.
Key Factors on Why the Market is Trading Higher:
GDP: Indian markets awaiting the GDP data for the March quarter on 31 May. India’s Gross Domestic Product (GDP) growth is expected to have grown by 5.1 percent in the final quarter of 2022-23, up from 4.4 percent in the previous quarter, according to estimates of 15 economists polled by Moneycontrol. Economists also see growth for the full year ended March matching the statistics ministry’s second advance estimate of 7 percent.
Normal Monsoon: India has reconfirmed its expectation of a normal monsoon this year, alleviating concerns regarding weather-related impacts on inflation. During the June-September season, the rainfall is projected to be approximately 96 percent of the long-term average, as stated by D.S. Pai, a senior scientist at the India Meteorological Department. This forecast aligns with the previous prediction made in April. The monsoon holds immense significance for India’s economy, as it irrigates half of the nation’s farmlands and greatly influences the prices of essential food items, as well as the livelihoods of millions of farmers. While inflation has recently decreased to an 18-month low, analysts have expressed worries that adverse weather conditions could reintroduce inflationary risks.
Debt ceiling deal: Investors are closely monitoring the possibility of a debt-ceiling deal, which is anticipated to occur over the weekend. US lawmaker to announce a deal to tackle debt limit by late Friday or Saturday (May 27), according to Goldman Sach Group Inc.
Monthly data: Investors will also eye monthly data on eight core, fiscal deficit, GST numbers, monthly auto and PMI services and manufacturing data due next week.
Global Cues
Globally, the US markets traded mixed overnight as investors awaited signs for debt ceiling deal.
That said, better-than-expected earnings from software company Nvidia helped NASDAQ Composite index gain over 1 per cent, while Dow Jones declined 0.1 per cent, and the S&P 500 was up 0.8 per cent.
In Asia-Pacific, markets largely edged higher this morning after Japanese headline inflation eased to 3.2 per cent in May from 3.5 per cent in April. Nikkei 225, Topix, and Kospi indices rose up to 0.4 per cent, whereas Hong Kong markets were closed for a holiday.
From the commodity market, prices of Brent Crude declined marginally to $76 per barrel, while WTI Crude gained 0.1 per cent to $71 per barrel.
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