Sensex rises 240 pts, Nifty ends near 18,600; M&M jumps over 4%

Domestic equity benchmarks closed higher for the second consecutive session on Monday, with the Nifty 50 index settling near the 18,600 level. Auto, media, and private banks were among the gainers, while FMCG, public sector banks, and IT stocks were under pressure.

The resolution of the US debt ceiling uncertainty and the anticipation of a pause in US Fed rate hikes contributed to the positive sentiment in the domestic market. Investors are expecting a more lenient approach from the Federal Reserve during its upcoming FOMC meeting on June 13-14. Additionally, investors are eagerly awaiting the outcome of the RBI`s meeting on June 8.

The barometer index, the S&P BSE Sensex advanced 240.36 points or 0.38% to 62,787.47. The Nifty 50 index gained 59.75 points or 0.32% to 18,593.85.

M&M (up 4.01%), Reliance Industries (up 0.89%) and ICICI Bank (up 1.09%) boosted the indices.

In the broader market, the S&P BSE Mid-Cap index added 0.29% while the S&P BSE Small-Cap index rose 0.51%.

The market breadth was positive. On the BSE, 2,160 shares rose and 1,498 shares fell. A total of 182 shares were unchanged.

The six-member Monetary Policy Committee of the Reserve Bank of India (RBI) is set to meet from 6-8 June 2023. The MPC decision will be announced by RBI Governor Shaktikanta Das on the last day of the meeting, which is Thursday, 8 June 2023.

Economy:

India`s services sector expanded at the second-fastest pace in nearly 13 years in May, as indicated by the S&P Global India Services PMI Business Activity Index. The index fell from 62.0 in April to 61.2 in May, but still indicated strong growth.

Meanwhile, India`s foreign exchange reserves fell for a second consecutive week to a one-month low of $589.14 billion as of May 26th. Foreign currency assets fell by $4.014 billion to $520.931 billion. Gold reserves also fell by $225 million to $44.902 billion, while the Special Drawing Rights (SDRs) and the country`s reserve position with the IMF fell by $84 million and $17 million, respectively, in the reporting week.

Numbers to track:

The yield on India`s 10-year benchmark federal paper added 0.23% to 7 from previous close of 6.984.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.6850, compared with its close of 82.39 during the previous trading session.

MCX Gold futures for 4 August 2023 settlement declined 0.12% to Rs 59,535.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.29% to 104.32.

The United States 10-year bond yield rose 1.67% to 3.749.

In the commodities market, Brent crude for August 2023 settlement gained $1.31 or 1.72% to $77.44 a barrel as Saudi Arabia pledged to cut production by an additional one million barrels per day. However, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, made no changes to its planned oil production cuts for this year and will limit combined oil production to 40.463 million barrels per day over January-December 2024.

Global Markets:

Shares in Europe and Asia advanced on Monday, as investors bet that the Federal Reserve would pause its rate hikes this month after a mixed U.S. jobs report.

China`s services sector picked up in May, with the Caixin/S&P Global services purchasing managers` index rising to 57.1 from 56.4 in April.

Japan`s service sector saw a record rate of expansion in May, with the au Jibun bank services purchasing managers` index coming in at 55.9, surpassing the previous record of 55.4 set last month.

On Friday, U.S. stocks closed higher after a report showed that wage growth in May was not as strong as expected. This suggests that the Federal Reserve may not raise interest rates at its next meeting, which is scheduled for two weeks from now. Investors were also relieved by a deal reached in Washington that will prevent the U.S. from defaulting on its debt.

U.S. President Joe Biden signed into law a debt ceiling bill over the weekend, which allowed the U.S. to avert defaulting on its financial obligations.

Stocks in Spotlight:

Wipro ended almost flat at Rs 404.50. The IT major has fixed 16 June 2023 as the record date for the proposed buyback of shares.

Tata Power Company rose 1.55% after the company said that its subsidiary, Tata Power Renewable Energy (TPREL) has commissioned a 110 megawatt (MW) solar power project in Bikaner, Rajasthan. The project will supply 110 MW of green power to the Kerala State Electricity Board and it is expected to generate approximately 211 million units (MUs) and reduce a 2,58,257 MT (metric tonne) carbon footprint annually.

Vedanta declined 0.66%. The diversified minerals company announced that its subsidiary, Bharat Aluminium Company (BALCO), has entered into a power delivery agreement (PDA) through special purpose vehicle (SPV), Serentica Renewables India (SRIPL).

SBI Life Insurance Company gained 1%. The company will take over the policy liabilities of around two lakh policies of Sahara India Life Insurance Company (SILIC), backed by the policyholders` assets, with immediate effect.

Nava jumped 5.74% after the company said its Zambian subsidiary, Maamba Collieries (MCL), had fully discharged all overdue loan installments. MCL had paid off all overdue loan installments and reduced its overall liabilities from $483 million (Rs 3,999 crore) to $206 million (Rs 1,707 crore) due to improved operational cash flows and receipts from an arbitral award against Zambia Electricity Supply Corporation (ZESCO).

Greaves Cotton rose 3.40%. Greaves Finance, a non-banking financial company (NBFC) and a wholly owned subsidiary of Greaves Cotton, has introduced a financial platform called "evfin". This platform aims to provide accessible and cost-effective financing options for electric vehicles.

Wonderla Holidays advanced 4.04% after the company said that Government of Tamil Nadu has granted waiver of Local Body Tax (LBT) of 10% for a period of 10 years from the commencement of commercial operations.

Som Distilleries & Breweries jumped 9.50% after the company announced that it had achieved a market share of 42% in May 2023 in the beer industry of Madhya Pradesh (MP).

One 97 Communication (Paytm) skid 0.49%. The company witnessed continued scale in its loan distribution business with disbursements of Rs 9,618 crore ($1.2 billion, YoY growth of 169%) and 85 lakh loans (YoY growth of 54%) distributed in the quarter to date (for April & May 2023).

Indian Overseas Bank (IOB) fell 1.26%. The bank informed that the Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.20 crore for non-compliance with certain directions issued by RBI. IOB failed to make minimum mandatory transfer of a sum equivalent to 25% of its disclosed profit for the year 2020-21 to its reserve fund and there was significant divergence between the NPAs, as reported by it and as assessed by the inspection.

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