Benchmarks trade with decent gains; private banks advance

The key equity indices continued to trade in a narrow range with modest gains in early afternoon trade. The Nifty hovered above the 18,600 level. Auto stocks saw buying demand for the second consecutive trading session.

At 12:30 IST, the barometer index, the S&P BSE Sensex, was up 308.28 points or 0.49% to 62,855.39. The Nifty 50 index gained 78.70 points or 0.42% to 18,612.35.

In the broader market, the S&P BSE Mid-Cap index added 0.48% while the S&P BSE Small-Cap index rose 0.55%.

The market breadth was strong. On the BSE, 2,289 shares rose and 1,266 shares fell. A total of 167 shares were unchanged.

The Reserve Bank of India (RBI)`s six-member Monetary Policy Committee is scheduled to meet this week during 6-8 June 2023. RBI Governor Shaktikanta Das will announce the MPC decision on Thursday, 8 June 2023, the last date of the meeting.

Economy:

Posting 61.2 in May, the seasonally adjusted S&P Global India Services PMI Business Activity Index highlighted a further expansion in output across the sector. Despite falling from 62.0 in April, the latest reading indicated the second strongest rate of growth in just under 13 years. Favorable demand conditions, new client wins and positive market dynamics reportedly supported output.

Meanwhile, India`s foreign exchange reserves fell for a second consecutive week and stood at a one-month low of $589.14 billion as of May 26, the Reserve Bank of India`s (RBI) data showed on Friday. That was a decrease of $4.34 billion from the previous week. For the week ended May 26, the foreign currency assets, a major component of the reserves, declined by $4.014 billion to $520.931 billion, according to the Weekly Statistical Supplement released by the RBI.

Gold reserves dropped by $225 million to $44.902 billion, the RBI said. The Special Drawing Rights (SDRs) were down by $84 million to $18.192 billion, the apex bank said. The country`s reserve position with the IMF was down by $17 million to $5.113 billion in the reporting week, the apex bank data showed.

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, fell 0.33% to 11.09. The Nifty 29 June 2023 futures were trading at 18,714, at a premium of 101.5 points as compared with the spot at 18,612.35.

The Nifty option chain for the 29 June 2023 expiry showed maximum Call OI of 39.5 lakh contracts at the 19,000 strike price. Maximum Put OI of 54.1 lakh contracts were seen at 18,000 strike price.

Buzzing Index:

The Nifty Private Bank index rose 0.82% to 22,539.95. The index added 1.03% in two sessions.

Axis Bank (up 2.21%), City Union Bank (up 1.62%), ICICI Bank (up 1.23%), Federal Bank (up 1.19%), IDFC First Bank (up 1.17%), RBL Bank (up 0.92%), IndusInd Bank (up 0.55%), HDFC Bank (up 0.25%), Kotak Mahindra Bank (up 0.12%) advanced.

Stocks in Spotlight:

Patel Engineering rallied 4.97% after the company received letter of acceptance (LOA) from City and Industrial Development Corporation (CIDCO) for the design & construction of water tunnel and aliied works in Raigad, Maharashtra.

Mahindra Lifespace Developers rallied 1.55%. The real estate developer on Friday announced that OMRON Healthcare will start operations in March 2025 by manufacturing the blood pressure monitors in India at Mahindra`s Origins in Chennai. The OMRON Healthcare factory will be built over 6.02 acres and will be manufacturing blood pressure monitors and supplying them mainly to the domestic market.

Sangam (India) advanced 2.58%. India Ratings and Research affirmed the company`s long-term issuer rating at `IND A` with `stable` outlook.

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