NIFTY SCALES ABOVE 22,700; BANK SHARES RALLY

The headline equity benchmarks traded with substantial gains in mid-morning trade. The Nifty traded above the 22,700 level after hitting day�s low of 22,577.45 in early trade. Bank shares advanced after declining in the past two trading sessions. Trading could be a volatile due to the expiry of weekly index options on the NSE.

At 11:30 IST, the barometer index, the S&P BSE Sensex, was up 394.6 points or 0.53% to 74,613.11. The Nifty 50 index gained 108.70 points or 0.48% to 22,706.50.

In the broader market, the S&P BSE Mid-Cap index added 0.34% and the S&P BSE Small-Cap index rose 0.22%.

The market breadth was positive. On the BSE, 1,857 shares rose and 1,758 shares fell. A total of 147 shares were unchanged.

Economy:

The Reserve Bank of India (RBI) announced a transfer of Rs 2.11 lakh crore to the government for the financial year 2023-24. This represents the highest surplus transfer on record by the central bank. This surplus will be reflected in the government`s accounts for the financial year 2024-25, providing a significant boost to their fiscal position.

HSBC Flash India Composite Output Index rise from a final reading of 61.5 in April to 61.7, which indicated the third-strongest rate of expansion in close to 14 years. Services firms recorded a sharp increase in business activity, the steepest in four months, while factory production rose at the slowest pace since February. Nevertheless, manufacturing continued to record a stronger rate of growth than services.

HSBC Flash India Manufacturing PMI slipped from 58.8 in April to 58.4 in May, showing the weakest improvement in the health of the sector for three months but one that remained strong by historical standards.

HSBC Flash India Services PMI Business Activity Index stood at 61.4 in May as against 60.8 in April.

Latest data highlighted further signs of strength in new export orders across both the manufacturing and service sectors.

Pranjul Bhandari, Chief India Economist at HSBC, said: �The composite PMI ticked up further in May supported by a sharp acceleration in the service sector. Although manufacturing sector growth slowed slightly in May, driven by a slowdown in new orders and production, the rise in output in the manufacturing industry continued to surpass that in the service economy.

Additionally, the latest data showed strength in new export orders for both sectors, which rose at the fastest pace since the series started in September 2014. The level of optimism about the year-ahead increased to its highest in over 11 years, resulting in firms increasing their staffing levels. However, higher input costs in both sectors led to further margin squeezes, particularly for service providers."

IPO Update:

The initial public offer (IPO) of Awfis Space Solutions received 2,40,28,485 bids for shares as against 86,29,670 shares on offer, according to stock exchange data at 11:30 IST on Thursday (23 May 2024). The issue was subscribed 2.78 times.

The issue opened for bidding on Wednesday (22 May 2024) and it will close on Monday (27 May 2024). The price band of the IPO is fixed between Rs 364 to Rs 383 per share. An investor can bid for a minimum of 39 equity shares and in multiples thereof.

Buzzing Index:

The Nifty Bank index gained 1.18% to 47,899.35. The index shed 0.59% in the past two consecutive trading sessions.

Bank of Baroda (up 2.45%), Axis Bank (up 2.25%), AU Small Finance Bank (up 1.66%), State Bank of India (up 1.54%), ICICI Bank (up 1.25%), IndusInd Bank (up 1.12%), Punjab National Bank (up 1.07%), IDFC First Bank (up 0.65%), HDFC Bank (up 0.58%) and Bandhan Bank (up 0.41%) advanced.

Stocks in Spotlight:

New India Assurance Company rose 1.18% after the company�s consolidated net profit surged 146.50% to Rs 310.88 crore in the quarter ended March 2024 as against Rs 126.12 crore during the previous quarter ended March 2023. Total income rose 14.7% to Rs 11,721.43 crore in the quarter ended March 2024 as against Rs 10,223.09 crore during the previous quarter ended March 2023.

Pennar Industries shed 0.56%. The company�s consolidated net profit jumped 22.58% to Rs 28.61 crore in the quarter ended March 2024 as against Rs 23.34 crore during the previous quarter ended March 2023. The company�s sales increased by 23.09% to Rs 822.80 in Q4 FY24 as against Rs 668.43 crore recorded during the previous quarter ended March 2023.

Sundram Fasteners declined 1.67%. The company�s consolidated net profit of rose 5.69% to Rs 133.55 crore in the quarter ended March 2024 as against Rs 126.36 crore during the previous quarter ended March 2023. Sales rose 1.28% to Rs 1,466.48 crore in the quarter ended March 2024 as against Rs 1,447.95 crore during the previous quarter ended March 2023.

Global Markets:

Most of the Asian stocks advanced on Thursday despite central banks` cautious stance on easing interest rates due to persistent inflation. Investor anxiety was heightened with China conducting military drills near Taiwan. Japan`s manufacturing sector showed a positive surprise, expanding to 50.5 in May.

Meanwhile, US stocks dipped after the Fed minutes revealed a gradual approach to curbing inflation, though Nvidia`s upbeat revenue forecast lifted its share price.

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