Sensex Open On A High, Back Above 60,000 Mark Ahead Of Inflation Data

Stock Market India: Indian equity benchmarks soared early on Monday to a three-week high, extending gains for the third straight session after logging their first weekly climb in three on Friday, ahead of key inflation data later in the day. Assets considered risky bets rose as the market’s improved sentiment extended to the beginning of the week, which was reflected in broad gains in Asian bourses, global stock futures, and a softening dollar. The BSE Sensex index climbed 260.

66 points, or 0. 44 per cent, to 60,053. 80 in early trade, and the broader NSE Nifty index advanced 80.

85 points, or 0. 45 per cent, to 17. 914.

20. Tech Mahindra, Infosys, Bajaj Finserv, Mahindra & Mahindra, Tata Steel, and ICICI Bank were at the top of the gainers’ table from the 30-share Sensex group. However, the laggards included Kotak Bank, Dr.

Reddy’s, L&T, Asian Paints, and HDFC. “The most important bullish factor that has caused and is sustaining India’s market outperformance is the strong growth recovery underway in India now. RBI’s report which puts bank credit growth now running at 15.

5 per cent is an endorsement of this fact,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told PTI. “While financials will continue to be resilient, some sector rotation can be expected at this juncture. The beaten down IT segment may participate in a pullback rally,” he added.

What has helped domestic stocks is the capital inflows. Indeed, Foreign Institutional Investors (FIIs) were net buyers to the tune of Rs 2,132. 42 crore on Friday, as per the latest exchange data.

Prior to retail inflation and industrial output data, which will be released after market hours, trading trend was favourable. But that may be at risk as India’s retail inflation data for August, due at 5. 30 pm, is predicted to show a surge back to near 7 per cent, snapping a three-month downtrend, according to a Reuters survey of economists.

Those expectations were largely driven by a rise in food costs as prices of essential crops like wheat, rice and pulses were driven higher by a record heatwave, squeezing already stretched household budgets further. “Investors will be looking ahead to the macro-economic data- Index of Industrial Production (IIP) and Consumer Price Index (CPI) to be out later in the day. However, there may be some cautiousness as another data from RBI showed that its headline foreign exchange reserves declined by $7.

9 billion to $553. 11 billion in the week ended September 2,” said Mohit Nigam, Head of Portfolio Management Services at Hem Securities. India’s import cover fell to the lowest since October 9, 2020, driven by large scale intervention by the RBI to shore up the rupee and stabilise it from wild swings.

But the broader global narrative shows expectations for a more subdued US inflation data, due later in the week, which drove Asian equities and global stocks futures higher and restrained the dollar. But trading volumes were weak due to holidays in China and South Korea, and investors were uncertain of the potential repercussions of Ukraine’s unexpected victory over Russian soldiers. After mildly recovering from a two-year low struck last week, MSCI’s broadest index of Asia-Pacific equities outside of Japan rose 0.

2 per cent. After rising 2 per cent last week, the Nikkei in Japan gained an additional 0. 9 per cent on Monday.

S&P 500 futures nudged up 0. 1 per cent on Wall Street as investors attempted to build on Friday’s rebound, while Nasdaq futures rose 0. 2 per cent.

As declining fuel prices are expected to drag down the headline index by 0. 1 per cent, bulls are anticipating that Tuesday’s estimate on US consumer prices would indicate the beginning of an inflationary peak. “Arguably, with the economy having contracted through the first half, and household discretionary spending capacity under significant pressure, we are due a modest downside surprise,” economists at Westpac told Reuters.

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