STOCKS CLIMB CAUTIOUSLY AS FED STAYS PUT, VIX COOLS BELOW 14

Domestic shares notched another win today, closing slightly higher for a two-day winning streak. The Nifty 50 ended near 23,400, buoyed by the US Fed`s decision to maintain interest rates and a slight dip in US inflation. Back home, some relief came from moderating retail inflation and a pick-up in industrial production. Despite the good news, weekly options expiry on the NSE kept things jittery. Investors favored sectors like real estate, consumer durables, and IT, suggesting a cautiously optimistic mood.

The S&P BSE Sensex rose 204.33 points or 0.27% to 76,810.90. The Nifty 50 index rose 75.95 points or 0.33% to 23,398.90.

The Sensex and Nifty clocked an all-time high of 77,145.46 and 23,481.05, respectively, in early trade.

Mahindra & Mahindra (up 2.73%), Titan Company (up 2.68%) and Larsen & Toubro (up 2.06%) boosted the indices.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.79% and the S&P BSE Small-Cap index added 0.89%. Both the indices hit their all-time highs today.

The market breadth was strong. On the BSE, 2,345 shares rose and 1,539 shares fell. A total of 100 shares were unchanged.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, tumbled 6.25% to 13.49.

Economy:

India`s annual inflation rate based on the Consumer Price Index (CPI) fell to 4.75% for the month of May 2024, according to government data. This is lower compared to 4.83% in April 2024 and 4.31% in May 2023. Inflation in the food basket remained high at 8.69% in May 2024, showing a slight decrease from 8.70% in April 2024.

India`s industrial production showed strong growth of 5% in April 2024 compared to 4.6% in April 2023. The growth rates of the three sectors, Mining, Manufacturing and Electricity for the month of April 2024 over April 2023 are 6.7%, 3.9% and 10.2% respectively.

Numbers to Track:

The yield on India`s 10-year benchmark federal shed 0.34% to 6.988 as compared with previous close 7.014.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.5500, compared with its close of 83.4800 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement fell 0.53% to Rs 71,585.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.17% to 104.82.

The United States 10-year bond yield gained 0.45% to 4.312.

In the commodities market, Brent crude for August 2024 settlement lost 56 cents or 0.68% to $82.04 a barrel.

Global Markets:

The Dow Jones index futures were down 112 points, indicating a weak opening in the US stocks today.

European stocks declined while most Asian stocks advanced after the Federal Reserve`s cautious stance on interest rates didn`t deter investors` expectations for cuts.

The Bank of Japan`s two-day policy meeting starts today, with a decision expected on Friday. While holding rates is likely, a reduction in bond purchases is a possibility.

U.S. stocks rose on Wednesday after inflation data showed a slowdown. The core consumer price index reached its lowest level in over three years, with year-over-year prices rising 3.3% for essentials and other goods.

The Federal Reserve maintained interest rates after its policy meeting, revising its forecast to one rate cut this year and four in 2025. This shift from the previous projection of three cuts in 2024 reflects a more cautious outlook.

The S&P 500 extended its record high by 0.9%, while the Nasdaq composite climbed 1.5%, further surpassing its own record. The Dow Jones Industrial Average saw a modest decline of 0.1%.

Stocks in Spotlight:

HDFC Life Insurance Company surged 3.28% after the company expressed its support for the progressive reforms outlined by the insurance regulator in its master circular on life insurance products. While HDFC Life anticipates a 100 basis point (bps) impact on its New Business Margin (NBM) due to the higher surrender values, the company remains confident in its ability to mitigate this impact and deliver long-term value to its customers.

Sobha soared 5.09% as its board approved Rs 2,000 crore rights issue. It will offer upto 1,21,07,981 partly paid-up equity shares at Rs 1,651 each.

Dr Reddy�s Laboratories rose 0.40%. The Pharmaceuticals company said that its wholly owned subsidiary, Dr. Reddy�s USA and Ingenus Pharmaceuticals has entered into license agreement to commercialise Cyclophosphamide Injection RTD in United States (US).

Larsen & Toubro (L&T) gained 2.06% after the company announced that its Hydrocarbon vertical, L&T Energy has secured a large offshore order from Oil & Natural Gas Corporation (ONGC).

Bondada Engineering hit an upper limit of 5% after the company received a letter of award (LoA) from NLC India worth Rs 939.39 crore.

Venus Remedies jumped 5.91% after the company announced that it has secured a contract for supplying its antibiotic product Ceftriaxone from UNICEF in the Beta Lactam tender.

One 97 Communications (Paytm) rallied 6.42% as Samsung partnered with Paytm to bring travel & entertainment services to Samsung Wallet in India. Samsung Wallet users will now have seamless access to Paytm`s flight, bus, movie and events booking service.

Meanwhile, IRDAI accepted registration withdrawal application of Paytm General Insurance. Paytm will focus on distributing products from other insurers.

Gensol Engineering hit an upper limit of 5% after it emerged as a successful bidder for the for 250 MW/500 MWh battery energy storage system (BESS) awarded by Gujarat Urja Vikas Nigam (GUVNL).

Saksoft zoomed 12.05% after the company announced the acquisition of Bangalore-based Augmento Labs, a digital engineering company, in a strategic move to enhance its capabilities and presence in the product engineering space.

KIOCL surged 11.45% after the Union steel and and heavy industries minister, H D Kumaraswamy approved the commencement of operations in Devadari iron ore mine in Sandur taluk of Ballari district in Karnataka.

Aurionpro Solutions advanced 4.21% after the company announced the receipt of final authorization from the Reserve Bank of India to operate as an �online payment aggregator�.

Exide Industries rose 0.27%. The company said that it has invested Rs 74 crore in its wholly owned subsidiary, Exide Energy Solutions (EESL) by way of subscription to share capital on right basis.

Mahindra & Mahindra Financial Services added 0.84%. The company entered into partnership with Kotak Mahindra Life Insurance Company to offer life insurance to the company�s customers.

Torrent Pharmaceuticals shed 0.67%. The company said that the company�s Gujarat-based manufacturing facility received Form 483 with five observations from the United States Food and Drug Administration (US FDA).

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