Finance

Nifty and Sensex open Friday slightly in the green

3 months ago
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  • India’s Nifty and Sensex opened with cautious optimism on  Friday, having settled higher on Thursday.
  • On Thursday, Nifty and Sensex rebounded firmly in tandem with the IT and auto sector stocks.
  • India’s and US PMIs came in mixed, RBI Minutes read hawkish, dismiss premature policy pivot.

The Sensex 30 and Nifty 50, India’s key benchmark indices, opened with cautious optimism on Friday, marginally higher after a solid comeback seen on Thursday. The mixed trading in the Asian stock markets amid negative Chinese indices, keeps the upside in the Indian indices capped.  

Thursday’s turnaround in Indian indices was led by the impressive rebound in the IT and automobile sector stocks.

The risk rally in the Asian and European stock markets on tech-boost also aided the late rebound in the Indian indices. Encouraging earnings report from the US chipmaker Nvidia lifted the overall market sentiment, sending global equities firmly higher.

Mixed Indian and US preliminary business PMI data combined with a hawkish Reserve Bank of India (RBI) meeting Minutes are likely to keep Nifty and Sensex traders on edge.

The National Stock Exchange (NSE) Nifty 50 is printing 0.08% gains on the day to trade at 22,236.75 while the Bombay Stock Exchange (BSE) Sensex 30 is almost unchanged at 73,186.71.

Stock market news

  • On Thursday, the top gainers on Nifty were Coal India, Eicher Motors, HCL Tech, Bajaj Auto and ITC. Meanwhile, the top losers were IndusInd Bank, HDFC Bank, BPCL, Kotak Mahindra Bank and Hindustan Unilever.
  • Data published by HSBC Bank showed on Thursday that India’s Manufacturing Purchasing Managers’ (PMI) Index dropped from 56.9 in January to 56.7 in February. Meanwhile, the Services PMI rose to 62.0 in the same period vs. 61.8 previous. The Composite PMI stood at 61.5, as against the previous reading of 61.2.
  • In the RBI Minutes, Governor Shaktikanta Das stated that ‘’at this juncture, monetary policy must remain vigilant and not assume that our job on the inflation front is over. We must remain committed to successfully navigating the ‘last mile’ of disinflation which can be sticky.”
  • S&P Global Manufacturing PMI improved to 51.5 from 50.7 in February, while S&P Global Services PMI edged lower to 51.3 from 52.5.
  • Speeches from Federal Reserve (Fed) policymakers continue to push back against expectations of early interest rate cuts.
  • Jefferies expects the Indian stock market to hit $10 trillion by 2030.
  • Among the corporate news, Grasim Industries Limited, a flagship company of the Aditya Birla Group, unveiled Birla Opus, its new decorative paints brand, targeting ₹10,000 crore revenue within 3 years.
  • Bharti Airtel introduced in-flight roaming plans for customers that will allow them to stay connected while on board a flight. 
  • SpiceJet raised ₹316 crore, bringing the total funds raised to ₹1,060.
  • The US stock markets rallied hard on Thursday, riding the AI optimism wave. US stock futures are trading 0.05% higher so far, at the press time.
  • Nvidia released Q4 earnings after the close on Wednesday. Nvidia posted $5.16 earnings per share (EPS) vs. $4.64 expected while revenue stood at $22.10 billion vs. $20.62 billion expected. The AI pioneer said that it expected $24.0 billion in sales in the current quarter.
  • The Fed Minutes stated on Wednesday, “most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent.” 
  • Markets are currently pricing in just about a 30% chance that the Fed could begin easing rates in May, much lower than an over 80% chance a month ago, according to the CME FedWatch Tool. For the June meeting, the probability for a rate cut now stands at 70%, down from 77% seen a day ago.
  • People’s Bank of China (PBoC) cut the five-year Loan Prime Rate (LPR) by a record 25 bps from 4.20% to 3.95%. The PBOC rate cut failed to excite traders on Tuesday.
  • All eyes now remain on the Fed’s Monetary Policy Report and Fedspeak in the day ahead.

Nifty 50 FAQs

The Nifty 50, or simply Nifty, is the most commonly followed stock index in India. It was launched in 1996 by the National Stock Exchange of India (NSE). It plots the weighted average share price of 50 of the largest Indian corporations, offering investors comprehensive exposure to 13 sectors of the economy. Each corporation’s weighting is based on its “free-float capitalization”, or the value of all its shares readily available for trading.

The Nifty is a composite so its value is dependent on the performance of the companies that make up the index, as revealed in their quarterly and annual results. Another factor is government policies, such as when in 2016 the government decided to demonetize 500 and 1000 Rupee banknotes. This led to a temporary cash shortage which negatively impacted the Nifty. The level of interest rates set by the Reserve Bank of India is a further factor as it determines the cost of borrowing. Climate change, pandemics and natural disasters are also drivers.

The Nifty 50 was launched on April 22, 1996 at a base level of 1,000. Its highest recorded level to date is 22,097 achieved on January 15, 2024 (this is being written in Feb 2024). The index first closed above the 10,000 level on October 17, 2017. The Nifty recorded its biggest daily decline on March 23, 2020 during the Covid pandemic, when it fell 1,125 points or 12.37%. The Nifty’s biggest gain in a single day occurred on May 18, 2009, when it rose 651 points after the results of the Indian elections.

Major corporations in the Nifty 50 include HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd and Kotak Mahendra Bank.

Source: https://www.fxstreet.com/news/stock-market-today-nifty-and-sensex-set-for-a-cautious-start-to-friday-202402230225