Equity benchmark indices opened with a positive note on January 23, led by robust buying in healthcare and IT sector stocks. The 30-share BSE Sensex rose 561.13 points or 0.79 per cent to 71,984.78 points in early trade. The Nifty climbed 160.45 points or 0.74 per cent to 21,732.25 points.
Among the Sensex firms, Bharti Airtel, Sun Pharma, ICICI Bank, PowerGrid and TCS were the major gainers, while Asian Paints, HDFC Bank, Hindustan Unilever, and Maruti were among the losers.
BSE midcap index was down 0.68 per cent while small cap lost 0.83 per cent in the morning hours.
As many as 20 stocks of the 30-share benchmark were trading in green, while 28 constituents of the broader Nifty were trading with gains.
According to V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services, “Now, sentiments are positive globally as well as in India. The sentimental support from the mother market is strong since the S&P 500 is at a record high at 4850.”
In Asia, Japan’s Nikkei 225 and Hong Kong’s Hang Seng were trading in green and China’s Shanghai Composite was in the negative.
On Jan. 19, the Dow and the S&P 500 set new record closing highs, while the tech-heavy Nasdaq reached its best closing level in two years. European markets closed largely higher on Jan. 19 with Germany’s DAX gaining 0.77 per cent and CAC 40 of France rising 0.56 per cent. London’s FTSE 100 also advanced 0.35 per cent.
Mr. Vijayakumar said that the tensions in West Asia and the Red Sea are areas of serious concern. “If something goes wrong, the market will be impacted since valuations are high. Therefore, even when optimistic, investors should be cautious.” NSE and BSE held normal trading sessions on Jan. 20, while the domestic equity market was closed on January 22, due to the consecration ceremony in Ayodhya.
On Jan. 20, the 30-share BSE Sensex fell 259.58 points or 0.36 per cent to settle at 71,423.65. The Nifty declined 50.60 points or 0.23 per cent to close at 21,571.80. Global oil benchmark Brent crude slipped 0.03 per cent to USD 80.04 a barrel. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 545.58 crore on Jan. 20, according to exchange data.
Rupee slides
The Indian rupee weakened on Jan 23, tracking a fall in its Asian peers amid persistent moderation in bets on aggressive rate cuts by the U.S. Federal Reserve.
The rupee was at 83.1225 against the U.S. dollar as of 10:00 a.m., down 0.07% compared to its close at 83.0650 on Jan. 19. Indian markets were shut on Jan. 22 due to a local public holiday.
The dollar index was last quoted lower at 103.21. While most Asian currencies edged lower, the offshore Chinese yuan was up nearly 0.3% on a report that China is weighing a rescue package for its plunging stock markets. The Japanese yen was little changed after the Bank of Japan maintained its ultra-loose monetary policy in a closely watched decision on Jan. 23.
The rupee is likely to hover between 83.05 and 83.20 on Tuesday, with routine dollar demand driving much of the price action, a foreign exchange trader at a state-run bank said. A reassessment of rate cut expectations in the United States is also likely to limit near-term gains for Asian currencies. Strong U.S. economic data and pushback from Fed officials prompted investors to pare bets on aggressive rate cuts. Investors are currently pricing in a 56.5% chance that the Fed will leave rates unchanged in March, up from only 19% as of Jan. 12.
Meanwhile, rupee forward premiums edged lower with the 1-year implied yield falling 1 basis point to 1.86%.
Over the medium term, “once 82.80 is taken out convincingly,” then the rupee may stand to witness further appreciation, Amit Pabari, managing director at FX advisory firm CR Forex said.
Investors will also be keeping an eye on the European Central Bank’s monetary policy decision due on Jan. 23 and the closely watched U.S. personal consumption expenditure inflation data due on Jan. 26.