Stock Market Today: Nifty and Sensex rebound in sync with IT stocks

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  • India’s Nifty and Sensex turn positive after a subdued start on Tuesday. IT stocks rebound.
  • Nifty and Sensex suffered on Monday to close in the red amid risk-averse global markets.
  • Tuesday’s US Durable Goods data eyed ahead of US PCE inflation, India’s Q3 GDP and monthly derivatives expiry later this week.

The Sensex 30 and Nifty 50, India’s key benchmark indices, swing back higher after a negative start to Tuesday, reversing Monday’s nearly 0.50% decline.

Asian markets recover after opening lower, tracking the negative close on Wall Street overnight.

Indian traders, however, remain jittery ahead of India’s third-quarter Gross Domestic Product (GDP) data and the expiry of monthly derivatives contracts due later this week. Also, of note remains the top-tier US economic news, including the Durable Goods Orders data due later on Tuesday.

At the time of writing, the National Stock Exchange (NSE) Nifty 50 and the Bombay Stock Exchange (BSE) Sensex 30 rise 0.15% on the day to trade at 22,152.50 and 72,909.54 respectively.

Stock market news

  • The top performers on Nifty, so far, are TCS, HCL Tech, Powergrid, Titan and HDFC Life Insurance. Meanwhile, the main losers include ONGC, UPL, Adani Ports, Bajaj Finance and Heromoto Corp.
  • Key corporate news: The National Company Law Tribunal approves Hinduja Group firm’s resolution plan for Reliance Capital.
  • Paytm’s founder and chief executive officer Vijay Shekhar Sharma quit payments bank board in a major shakeup. Paytm share price dips after rallying 5%.
  • Union Bank of India raised 30 billion rupees, under QIP, at an issue price of 135.65 rupees.
  • Wipro Company announced a joint 5G private wireless solution with Nokia to help enterprises scale their digital transformation.
  • On Monday, Nifty and Sensex bore the brunt of the sharp declines in the metal and pharma sector stocks.
  • The US stock markets in the red on Monday. US stock futures are trading 0.06% lower on the day, at the press time.
  • Last week, Nifty and Sensex traders took account of the mixed Indian and US preliminary business PMI data and a hawkish Minutes of the Reserve Bank of India (RBI) February meeting.
  • Data published by HSBC Bank showed on Thursday that India’s Manufacturing Purchasing Managers’ (PMI) Index dropped from 56.9 in January to 56.7 in February. Meanwhile, the Services PMI rose to 62.0 in the same period vs. 61.8 previous. The Composite PMI stood at 61.5, as against the previous reading of 61.2.
  • In the RBI Minutes, Governor Shaktikanta Das stated that ‘’at this juncture, monetary policy must remain vigilant and not assume that our job on the inflation front is over. We must remain committed to successfully navigating the ‘last mile’ of disinflation which can be sticky.”
  • S&P Global Manufacturing PMI improved to 51.5 from 50.7 in February, while S&P Global Services PMI edged lower to 51.3 from 52.5.
  • Attention now turns toward the US Durable Goods Orders, PCE inflation data and India’s Gross Domestic Product (GDP) data.
  • Markets are currently pricing in just about a 20% chance that the US Federal Reserve (Fed) could begin easing rates in May, much lower than an over 90% chance a month ago, according to the CME FedWatch Tool. For the June meeting, the probability for a rate cut now stands at about 60%, down from 70% seen a few days ago.

Indian economy FAQs

The Indian economy has averaged a growth rate of 6.13% between 2006 and 2023, which makes it one of the fastest growing in the world. India’s high growth has attracted a lot of foreign investment. This includes Foreign Direct Investment (FDI) into physical projects and Foreign Indirect Investment (FII) by foreign funds into Indian financial markets. The greater the level of investment, the higher the demand for the Rupee (INR). Fluctuations in Dollar-demand from Indian importers also impact INR.

India has to import a great deal of its Oil and gasoline so the price of Oil can have a direct impact on the Rupee. Oil is mostly traded in US Dollars (USD) on international markets so if the price of Oil rises, aggregate demand for USD increases and Indian importers have to sell more Rupees to meet that demand, which is depreciative for the Rupee.

Inflation has a complex effect on the Rupee. Ultimately it indicates an increase in money supply which reduces the Rupee’s overall value. Yet if it rises above the Reserve Bank of India’s (RBI) 4% target, the RBI will raise interest rates to bring it down by reducing credit. Higher interest rates, especially real rates (the difference between interest rates and inflation) strengthen the Rupee. They make India a more profitable place for international investors to park their money. A fall in inflation can be supportive of the Rupee. At the same time lower interest rates can have a depreciatory effect on the Rupee.

India has run a trade deficit for most of its recent history, indicating its imports outweigh its exports. Since the majority of international trade takes place in US Dollars, there are times – due to seasonal demand or order glut – where the high volume of imports leads to significant US Dollar- demand. During these periods the Rupee can weaken as it is heavily sold to meet the demand for Dollars. When markets experience increased volatility, the demand for US Dollars can also shoot up with a similarly negative effect on the Rupee.