Equity benchmarks open higher, extend winning run to 7 days in a row
Indian equity benchmarks start Thursday on the front foot, extending their gains for the seventh straight session, taking cues from a strong rally on Wall Street after robust economic data and upbeat corporate guidance boosted investor appetite.
The BSE Sensex index was 264.56 points higher at 58,615.09 early on Thursday, and the NSE Nifty was up 0.45 per cent at 17,465.65. While both the indexes eked out only marginal gains in the previous two sessions, they have extended their winning to seven days in a row.
The Nifty IT index was the best-performing sub-index, extending gains from the prior day to jump by more than 1 per cent. With a 2 per cent increase, Infosys Ltd. gave the benchmark Nifty 50 the highest lift.
Britannia Industries, a manufacturer of biscuits, was down 0.4 per cent before the release of its quarterly financial reports later in the day.
Crude oil prices recovered in early Asian trade on Thursday, bouncing off multi-month lows in the previous session caused by data signalling weak US fuel demand.
“Giving the markets a leg-up is a 3 per cent fall in WTI crude prices, return of foreign investors in Indian equities, decent Q1 with mostly positive management commentaries, and hopes of normal monsoon,” Prashanth Tapse, Senior Vice President for Research at Mehta Equities.
“However, the biggest negative catalyst at the moment is that the US yield curve has steepened, which is indicative of a recession warning. On the technical front, Nifty will aim to inch towards the 17,500 mark, and is likely to be in the trading range of 16,500-18,000 zone,” he added.
What has helped domestic stocks is the return of foreign investors.
Indeed, foreign investors have turned net buyers of Indian equities in recent days, providing relief for the rupee. Over the last four sessions through Tuesday, foreign investors have bought about $1.9 billion worth of Indian equities.
Asian stocks rose on Thursday, with MSCI’s broadest index of Asia-Pacific shares up 0.65 per cent as strong financial results from PayPal lifted the mood. At the same time, data showed new orders for US-manufactured goods increased solidly.
US S&P 500 futures were about flat, after the underlying index jumped 1.56 per cent overnight and the tech-heavy Nasdaq surged 2.73 per cent to a three-month peak.
The focus shifts to the RBI meeting on Friday.
The Reserve Bank of India has raised rates twice since May and is expected to hike again on Friday to tame persistently high inflation in Asia’s third-largest economy.
