Nifty above 15,600 level, banks in demand

The benchmark indices extended gains and hit a fresh intraday high in the mid-morning trade. The Nifty traded above the 15,600 level. All the sectoral indices on the NSE were in the green with auto, realty and bank stocks recording big gains.

At 11:26 IST, the barometer index, the S&P BSE Sensex, was up 629.8 points or 1.22% to 52,452.33. The Nifty 50 index gained 204.80 points or 1.33% to 15,618.10.

In the broader market, the S&P BSE Mid-Cap index gained 1.53% while the S&P BSE Small-Cap index rose 1.33%.

The market breadth was strong. On the BSE, 2,269 shares rose and 776 shares fell. A total of 132 shares were unchanged.

Investors digested U.S. Federal Reserve Chair Jerome Powell`s comments on central bank`s aim to slow down the inflation. Powell, in testimony to the U.S. Senate Banking Committee, stated that higher rates are painful but are the means the U.S. central bank has to slow inflation. Investors are continuing to assess how worried they need to be about central banks potentially pushing the world economy into recession as they attempt to curb inflation with interest rate increases.

Economy:

India`s current account deficit (CAD) decreased to $13.4 billion (1.5 per cent of GDP) in Q4 2021-22 from $22.2 billion (2.6% of GDP) in Q3 2021-22. The sequential decline in CAD in Q4 2021-22 was mainly on account of a moderation in trade deficit and lower net outgo of primary income. Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to $23.7 billion, up by 13.4% from their level a year ago. Net outgo from the primary income account, largely reflecting net income payments on foreign investment, decreased sequentially as well as on a YoY basis.

In the financial account, net foreign direct investment (FDI) at $13.8 billion was higher than $2.7 billion in Q4 2020-21. Net foreign portfolio investment (FPI) recorded an outflow of $15.2 billion - mainly from the equity market. Net external commercial borrowings (ECBs) to India were lower at $3.3 billion in Q4 2021-22 as compared with $6.1 billion a year ago. There was a drawdown of $16.0 billion in the foreign exchange reserves (on a BoP basis) as against an accretion of $3.4 billion in Q4 2020-21

Buzzing Index:

The Nifty Bank index rose 1.62% to 33,377.55. The index declined 1.04% in the past trading session.

IDFC First Bank (up 5.49%), AU Small Finance Bank (up 3.56%), ICICI Bank (up 2.38%), State Bank of India (up 1.74%), Bank of Baroda (up 1.73%), Axis Bank (up 1.47%), IndusInd Bank (up 1.27%), Kotak Mahindra Bank (up 1.18%), HDFC Bank (up 0.96%) and Punjab National Bank (up 0.85%) advanced.

Global Markets:

Asian stocks were mixed on Thursday as investors continued to monitor recession concerns.

Chinese President Xi Jinping chaired a top-level meeting on Wednesday that approved a plan for the healthy development of China`s large payment firms and fintech sector.

US stocks fell slightly Wednesday in choppy trading as markets struggled to sustain a rebound from earlier in the day. Traders also weighed comments from Federal Reserve Chair Jerome Powell, who reiterated the central bank`s stance to fight inflation.

The Federal Reserve is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn, U.S. central bank chief Jerome Powell said on Wednesday. Powell said at a hearing before the U.S. Senate Banking Committee that a recession was "certainly a possibility" and events in the last few months around the world had made it more difficult to reduce inflation without causing one.

On Wednesday, Powell reiterated that ongoing increases in the Fed`s policy rate would be appropriate, with the exact pace dependent on the economic outlook.

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