Sensex spurts 659 pts, Nifty ends near 17,800; NSE VIX drops over 5%

The domestic equity benchmarks ended with strong gains on Thursday. The Nifty closed near the 17,800 mark. Positive global shares, cooling oil prices and consistent FII inflows supported buying in domestic equities. Banks stocks were in demand. On the other hand, metals, media and consumer durables stocks were under pressure.

The barometer index, the S&P BSE Sensex, gained 659.31 points or 1.12% to 59,688.22. The Nifty 50 index added 174.35 points or 0.99% to 17,798.75.

Shree Cement (up 4.84%), BPCL (up 3.98%), Axis Bank (up 3.47%), Tech Mahindra (up 3.24%) and ICICI Bank (up 2.67%) were top Nifty gainers.

In the broader market, the S&P BSE Mid-Cap index rose 0.29% while the S&P BSE Small-Cap index advanced 0.60%.

The market breadth was strong. On the BSE, 2042 shares rose and 1437 shares fell. A total of 110 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, tumbled 5.48% to 18.31.

Economy:

The Union Cabinet has approved policy on long term leasing of railway land for implementing PM Gati Shakti framework. The plan will not incure any additional expenditure. However, liberalizing the land leasing policy will open avenues for all stakeholders/service providers/operators to establish more cargo related facilities. Besides bringing more revenue to railways, the plan will attract more cargo to railways, increase railways` modal share in freight transportation thereby reducing logistics cost of the industry.

It will simplify approvals for utilities as envisaged in PM Gati Shakti Programme. It will also help in development of public utilities like electricity, gas, water supply, telecom cable, sewage disposal, drains, optical fibre cables (OFC), pipelines, roads, flyovers, but terminals, regional rail transport, urban transport etc. in an integrated manner. This policy amendment will enable employment generation potential of about 1.2 lakh employment.

Retail vehicle sales in August:

Total vehicle retail for the month of August 2022 saw a year-on-year (YoY) growth of 8%, the Federation of Automobile Dealers Associations (FADA) said in a statement today, 8 September 2022. Except tractors retail, which decreased 32% YoY, all the other categories grew last month. Two-wheelers (2W), three wheelers (3W), passenger vehicles (PV) and commercial vehicles (CV) were up by 8.5%, 83%, 6.5% and 24%, respectively.

When compared with August 2019, a pre-covid month, total vehicle retails continued to fall by 7%. While PV showed a double-digit healthy growth of 41%, growth in CV also turned positive by 6%. All the other categories were in red with 2W, 3W and tractors falling by 16%, 1% and 7%, respectively.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper declined to 7.137 as compared with 7.185 at close in the previous trading session.

In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 79.69, compared with its close of 79.9550 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement gained 0.22% to Rs 50,615.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, shed 0.27% to 109.54.

In the commodities market, Brent crude for November 2022 settlement rose 2 cents or 0.02% at $88.02 a barrel. The contract slumped $4.83 or 5.20% to settle at $88 a barrel in the previous session.

Oil prices settled sharply lower on Wednesday, slumping below levels seen prior to Russia`s invasion of Ukraine as downbeat Chinese trade data fed investor worries about recession risks.

The slide in global crude oil prices will help India in containing its current account deficit and fuel price inflation. India imports majority of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.

Global Markets:

Most shares in Europe and Asia advanced on Thursday, following Wall Street`s solid rebound rally overnight.

Japan`s economy grew more than initially reported in the second quarter, as the lifting of local Covid-19 restrictions boosted consumer and business spending. Gross domestic product (GDP) in the world`s third-largest economy expanded an annualised 3.5% in the second quarter, stronger than the preliminary estimate of annualised 2.2% growth, data showed Thursday.

US stock indexes climbed the most in roughly a month as bond yields eased, with investors shrugging off hawkish remarks made by Federal Reserve officials on Wednesday. Fed Vice Chair Lael Brainard reaffirmed that the central bank would do what it takes to stifle inflation, while also noting the risks of going too far.

On Wednesday, the Federal Reserve gave its summary on current economic conditions, known as the Beige Book. The report showed that economic activity was little changed in many regions across the U.S., and that growth outlooks remain weak.

Investors will also be closely watching Federal Reserve Chair Jerome Powell`s speech Thursday as markets brace for another 75 basis-point hike later this month.

Meanwhile, the European Central Bank is expected to make its next move on interest rates on Thursday. The ECB is expected to deliver its first-ever 75 basis point interest rate increase, as per reports.

Stocks in Spotlight:

Websol Energy Systems hit an upper circuit limit of 10% at Rs 108.50 after the company said it has entered into a term sheet for establishment of a joint venture with AMP to manufacture and produce solar cells in West Bengal.

Sonata Software jumped 6.46%. The IT service provider traded ex-bonus today, 8 September 2022. The software and consulting firm has fixed Saturday, 10 September 2022, as the record date to determine the eligibility for the issuance of one bonus share for every three equity shares held (1:3).

Interglobe Aviation fell 2.18%. Rakesh Gangwal, co-founder of IndiGo will reportedly sell upto a 2.8% stake in Interglobe Aviation through a block deal that will fetch him at least $250 million.

Schneider Electric Infrastructure zoomed 10%. The company`s board approved enhancing the production capacity of vacuum interrupters & vacuum circuit breakers by setting up a manufacturing unit in Kolkata.

Indian Railway Catering and Tourism Corporation (IRCTC) advanced 1.17%. IRCTC has emerged as a successful bidder in the e-auction held on 6 September 2022 for the sale of commercial built-up space in New Delhi.

Ramkrishna Forgings advanced 2.59%. The company said its board will meet on 12 September 2022 to consider fund raising by way of issue of equity shares/ preference shares/warrants/ any other securities, including through preferential issue on a private placement basis or any other methods or combination thereof.

Dr. Reddy`s Laboratories added 0.45%. The drug major on Wednesday announced the launch of Lenalidomide capsules in the US market with an approval from the US Food and Drug Administration (US FDA). The said drug is the therapeutic equivalent generic version of Revlimid (lenalidomide) capsules. The pharmaceutical company said with this volume-limited launch, the company is eligible for first-to-market, 180 days of generic drug exclusivity for Lenalidomide Capsules in 2.5 mg and 20 mg strengths.

Sona BLW Precision Forgings shed 0.27%. Sona Comstar said that it has achieved the 100,000 EV traction motor production milestone. The company started production of these indigenous traction motors at its Chennai plant in November 2020. While it took 17 months to reach cumulative production of 50,000, the company doubled it in four months.

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