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The domestic equity barometers traded with strong gains in early afternoon trade. The Nifty traded above the 19,500 level. Realty stocks extended gains for the second consecutive trading session. Trading could be volatile due to expiry of weekly index options on the NSE.
The barometer index, the S&P BSE Sensex, was up 537.08 points or 0.82% to 65,930.98. The Nifty 50 index added 144.80 points or 0.75% to 19,529.10.
In the broader market, the S&P BSE Mid-Cap index rose 0.24% while the S&P BSE Small-Cap index gained 0.52%.
The market breadth was positive. On the BSE, 1,794 shares rose and 1,519 shares fell. A total of 136 shares were unchanged.
Investor sentiment was upbeat after weaker-than-expected U.S. inflation data fueled expectations that the Federal Reserve was close to hitting peak interest rates.
While June's consumer price index (CPI) inflation reading pointed to easing overall inflation in the country, core CPI, which ignores volatile food and fuel prices, still remained relatively sticky. This saw investors pricing in an at least 25 basis point rate hike by the Fed in a late-July meeting, with several Fed officials also warning that rates will need to rise further in order to curb sticky inflation.
Back home, the National Stock Exchange of India (NSE) on Wednesday announced a revision on the expiry day of Bank Nifty (BANKNIFTY) index options. Effective from 4 September 2023, the expiry day of Bank Nifty weekly contracts will shift from Thursday to Wednesday. The first Wednesday weekly expiry will be on 6 September 2023.
Economy:
India's retail inflation snapped a four-month decline and grew 4.81% in June as food prices surged, showed government data on Wednesday. CPI inflation was 4.31% in May. Inflation based on the Consumer Price Index (CPI) stood at 4.31% (revised upward from 4.25%) in May and 7% in June 2022.
India's industrial production rose to 5.2% in May from 4.5% in April 2023, mainly due to good performance by the manufacturing and mining sectors, according to the official data released on Wednesday. The factory output growth measured in terms of the Index of Industrial Production (IIP) stood at 19.7% in May 2022.
Derivatives:
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.49% to 11.07. The Nifty 27 July 2023 futures were trading at 19,601.30, at a premium of 72.2 points as compared with the spot at 19,529.10.
The Nifty option chain for the 27 July 2023 expiry showed maximum Call OI of 31.5 lakh contracts at the 19,500 strike price. Maximum Put OI of 53.3 lakh contracts were seen at 19,000 strike price.
Buzzing Index:
The Nifty Realty index rose 1.99% to 538.70. The index advanced 2.25% in two trading sessions.
Macrotech Developers (up 5.55%), Phoenix Mills (up 3.46%), Godrej Properties (up 1.95%), Sobha (up 1.67%) and Oberoi Realty (up 1.37%), Mahindra Lifespace Developers (up 0.93%), DLF (up 0.84%), Brigade Enterprises (up 0.71%) and Indiabulls Real Estate (up 0.32%) edged higher.
Godrej Properties rose 1.95% after the firm emerged as the highest bidder and secured letter of intent (LoI) to develop two group housing plots through e-auction conducted by the Haryana Shehri Vikas Pradhikaran (HSVP).
Stocks in Spotlight:
Hindalco Industries gained 2.80% to Rs 436.55 after the company said that its board has approved a proposal to sell a land at Kalwa, Maharashtra, for Rs 595 crore. The land will be sold to Birla Estates, a subsidiary of Century Textiles and Industries for a total sum of Rs 595 crore, which is to be received in multiple tranches over a period of time.
Dreamfolks Services rallied 5.29% to Rs 687.70 after the company said that it has announced strategic collaboration with Plaza Premium group to expand global lounge network, enhance travel experience for Indian passengers.
Global Markets:
Asian stocks rose across the board Thursday after the U.S. inflation rate for June came in lower than expected.
South Korea's central bank held its benchmark interest rate unchanged at 3.5%, the fourth straight meeting the Bank of Korea has done so after last hiking rates in January. The BOK also forecasted that inflation will rise to around 3% after August, and added the need for an additional hike will be judged ?while assessing the changes in domestic and external policy conditions.?
Wall Street stocks advanced Wednesday following a surprisingly benign US inflation report that raised hopes the Federal Reserve will soon end its monetary tightening campaign.
Headline and core inflation in the U.S. rose at a slower-than-expected pace in June. The Bureau of Labor Statistics' closely watched consumer price index increased by 3.0% annually, down from 4.0% in May. Meanwhile, core CPI, which strips out more volatile items like food and energy, cooled to 4.8% yearly and 0.2% monthly.
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