MARKET OPENS ON FIRM NOTE; BREADTH STRONG

The key equity indices traded with modest gains in early trade. The Nifty traded above the 24,900 level. IT, oil & gas and consumer durables shares advanced while healthcare and FMCG shares declined.

At 09:30 IST, the barometer index, the S&P BSE Sensex, rose 330.58 points or 0.42% to 81,427.54. The Nifty 50 index added 94.90 points or 0.38% to 24,918.05.

In the broader market, the S&P BSE Mid-Cap index added 0.44% and the S&P BSE Small-Cap index gained 0.55%.

The market breadth was strong. On the BSE, 2,125 shares rose and 1,043 shares fell. A total of 158 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,944.48 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 2,896.02 crore in the Indian equity market on 23 August 2024, provisional data showed.

Stocks in Spotlight:

Shyam Metalics and Energy advanced 2.40% after the company�s wholly-owned subsidiary, Shyam Sel and Power (SSPL) has acquired a 100% stake in SMEL Steel Structural, a promoter group company, for total consideration of Rs 1 lakh.

Zydus Lifesciences dropped 4.52% after the company�s wholly owned subsidiary, Zydus Animal Health and Investments has entered into share purchase and share subscription agreement (SPSSA) with Perfect Day to acquire 50% stake in Sterling biotech.

Ashoka Buildcon rallied 3.25% after the company emerged as the lowest bidder (L-1) for a project worth Rs 478 crore awarded by Mumbai Metropolitan Region Development Authority (MMRDA).

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose 1.56% to 6.966 as compared with previous close of 6.859.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.8150, compared with its close of 83.9000 during the previous trading session.

MCX Gold futures for 5 September 2024 settlement shed 0.01% to Rs 71,290.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.10% to 100.67.

The United States 10-year bond yield fell 0.50% to 3.790.

In the commodities market, Brent crude for October 2024 settlement gained 52 cents or 0.66% to $79.54 a barrel.

Global Markets:

Asian markets traded mixed on Monday, with some finding support from the anticipation of lower U.S. interest rates. However, Japanese markets retreated amidst pressure from the yen and speculation about potential rate hikes by the Bank of Japan. The upcoming Tokyo inflation data is expected to provide more clarity on the trajectory of Japanese interest rates.

Sentiment was also influenced by the People`s Bank of China`s withdrawal of approximately 101 billion yuan ($14.2 billion) from the open market. While this move aimed to strengthen the yuan, it also raised concerns about the extent of Beijing`s support for the Chinese economy.

Regional markets drew initial strength from the positive performance of Wall Street, where the S&P 500 and Dow Jones Industrial Average approached record highs on Friday. Federal Reserve Chair Jerome Powell`s comments reinforced expectations for a rate cut in September, with Powell stating that "the time has come" for a monetary policy adjustment.

In his speech at the Jackson Hole Economic Symposium on Friday, Powell highlighted the factors contributing to recent inflation, including increased demand for goods, supply chain disruptions, tight labor markets, and rising commodity prices. He also clarified that the recent rise in the unemployment rate is primarily due to increased labor supply and slower hiring, rather than widespread layoffs.

The S&P 500 gained 1.2%, the Dow Jones Industrial Average rose 1.1%, and the NASDAQ Composite surged 1.5%.

However, caution prevailed ahead of a series of crucial events this week. The most anticipated is the earnings report from NVIDIA Corporation, a market darling, which is due after the market closes on Wednesday. Additionally, the PCE price index data, the Fed`s preferred inflation gauge, is scheduled for later in the week.

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