Our Business Correspondent
Domestic equity benchmarks extended their winning run for a fourth consecutive session on Monday, supported by broad-based buying across sectors as encouraging first-quarter business updates from corporates, easing crude oil prices, favourable monsoon progress and receding geopolitical tensions boosted investor confidence.
The benchmark indices ended firmly higher, with the Nifty closing above the psychologically significant 24,400 mark. Buying was led by automobile, consumer durables, oil & gas and metal stocks, while information technology and PSU banking shares witnessed profit booking. The broader market also remained resilient, reflecting sustained investor interest despite some weakness in market breadth.
The BSE Sensex climbed 521.16 points, or 0.67 per cent, to close at 78,285.07, while the NSE Nifty 50 gained 159.50 points, or 0.66 per cent, to settle at 24,430.35. Over the past four trading sessions, both benchmark indices have advanced 2.36 per cent, underscoring the strength of the current market rally.
Heavyweight financial stocks remained key contributors to the day’s gains. HDFC Bank emerged as the biggest support to the Nifty after rising 3.36 per cent following its quarterly business update. Reliance Industries added 1.36 per cent, while ICICI Bank advanced 1.07 per cent, providing further momentum to the benchmark.
Although frontline indices outperformed, the broader market continued to post gains. The BSE MidCap index rose 0.47 per cent, while the SmallCap index added 0.37 per cent. However, market breadth remained slightly negative, with 2,286 stocks declining against 2,055 advances on the BSE, while 210 shares remained unchanged.
Investor sentiment remained largely positive despite a marginal uptick in volatility. India VIX, the market’s volatility gauge, edged up 0.16 per cent to 11.82, indicating that traders continue to expect relatively stable market conditions in the near term.
In the debt market, India’s benchmark 10-year government bond yield eased to 6.679 per cent from 6.707 per cent in the previous session, reflecting steady demand for sovereign securities.
The rupee weakened marginally against the US dollar, trading at 95.40 compared with its previous close of 95.19. In the commodities market, MCX Gold futures for August delivery slipped 0.32 per cent to ₹1,46,901 per 10 grams.
The US Dollar Index strengthened 0.21 per cent to 100.83, while the yield on the benchmark US 10-year Treasury note eased to 4.46 per cent.
Crude oil prices remained relatively subdued after OPEC+ agreed to increase production by another 188,000 barrels per day from August, following similar supply hikes in June and July. Brent crude futures were marginally higher at $71.91 per barrel. The expectation of increased supply has helped ease concerns over energy-driven inflation, providing support to equity markets globally.
Global markets presented a mixed picture. Most European equities traded lower as investors turned cautious after last week’s rally and shifted focus to a busy week of central bank commentary and key macroeconomic data releases.
Economic indicators from the Eurozone painted a mixed outlook. Producer prices rose 0.2 per cent month-on-month in May, while annual producer inflation accelerated to 5.9 per cent despite lower energy prices. Retail sales also showed modest improvement, rising 0.2 per cent during the month after a decline in April.
Asian markets ended mixed as softer crude oil prices improved the inflation outlook across the region. Investors also took comfort from the absence of fresh geopolitical developments involving the United States and Iran, while shipping through the strategically important Strait of Hormuz remained largely unaffected.
Expectations surrounding US monetary policy also remained supportive for global risk assets. A softer-than-expected US payrolls report reinforced market expectations that the Federal Reserve is likely to leave interest rates unchanged at its July policy meeting. Futures currently imply a 78 per cent probability that rates will remain on hold. Investors will closely monitor the minutes of the Fed’s latest policy meeting later this week for further guidance on the interest rate trajectory.
US markets remained closed on Friday on account of the Independence Day holiday. In the previous session, the Dow Jones Industrial Average had touched a record closing high, while technology-heavy indices witnessed some pressure amid continued weakness in semiconductor stocks.
Among individual stocks, HDFC Bank rallied after reporting healthy growth in its June quarter business update. The bank said average advances under management increased 10.8 per cent year-on-year to ₹30.39 lakh crore during the quarter ended June 30.
Private sector lenders also remained in focus. IndusInd Bank gained 3.76 per cent after reporting a 4.5 per cent rise in deposits to ₹4.15 lakh crore. Karur Vysya Bank climbed 4.87 per cent after posting nearly 16 per cent growth in total business, while Bandhan Bank advanced 4.06 per cent following a 6.6 per cent increase in deposits. In contrast, Bank of Maharashtra declined 2.29 per cent despite reporting a 19 per cent rise in total business, indicating some profit booking after recent gains.
Among technology-related counters, Dixon Technologies surged nearly 7 per cent after a foreign brokerage reaffirmed its ‘Buy’ recommendation and raised the target price to ₹16,200.
Fermenta Biotech rallied 13.78 per cent after receiving FSSAI approval for its plant-based Vitamin D3 product, enabling its use in fortified foods and nutraceuticals in India.
Faalcon Concepts hit the 20 per cent upper circuit after securing a ₹101.93 crore work order from Splendor Information Technology. The order value exceeds three times the company’s current market capitalisation, underlining its significance for future revenue visibility.
On the downside, Supriya Lifescience tumbled 11.34 per cent after the company disclosed that judicial proceedings had been initiated against one of its senior employees by the Customs Department’s Special Investigation and Intelligence branch.
In the primary market, Aastha Spintex made a subdued debut. The stock listed at ₹130, a discount of 4.41 per cent to its issue price of ₹136, before recovering to close at ₹136.45, representing a marginal premium of 0.33 per cent over the issue price.
Global Cues and Macro Economic Indicators
Global market setups presented a mixed bag. European shares traded lower as investors maintained a cautious stance ahead of a busy week featuring crucial economic data and central bank speeches. In the Eurozone, May producer prices matched expectations with a 0.2% MoM increase, pushing annual producer inflation to a multi-month high of 5.9%. Eurozone retail sales rebounded by 0.2% MoM in May, registering a 1.6% YoY growth.
Asian bourses ended mixed, supported primarily by the softening inflation outlook linked to lower crude oil prices. Geopolitical anxieties around the U.S.-Iran friction cooled down as shipping through the strategic Strait of Hormuz remained uninterrupted, with approximately 160 vessels transiting smoothly over the past week.
In the US, weaker-than-expected June payroll data from late last week has bolstered expectations that the Federal Reserve will hold interest rates steady at its upcoming July 29 meeting. Futures are currently pricing in a 78% probability of a pause
Disclaimer: This report is intended for informational and journalistic purposes only and should not be construed as investment advice, a recommendation to buy or sell securities, or a forecast of future market performance. Investors should consult certified financial advisers before making investment decisions.