Market near day's high; metal shares rally for 3rd day

The key equity indices traded near the day's high with moderate gains in early afternoon trade. The Nifty traded above the 24,100 level. Metal shares extended gains for the third consecutive trading session.

At 12:30 IST, the barometer index, the S&P BSE Sensex was up 385.74 points or 0.47% to 79,399.46. The Nifty 50 index added 113.10 points or 0.47% to 24,123.70.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index gained 0.93% and the S&P BSE Small-Cap index advanced 1.38%.

The S&P BSE Mid-Cap and S&P BSE Small-Cap index hit an all-time high at 46,610.29 and 52,868.91 respectively.

The market breadth was strong. On the BSE, 2,631 shares rose and 1,263 shares fell. A total of 151 shares were unchanged.

Economy:

The seasonally adjusted HSBC India Manufacturing Purchasing Managers Index (PMI) increased to 58.3 from 57.5 in May, thus indicating a sharper improvement in business conditions. June data showed that buoyant demand conditions spurred the expansions in new orders, output and buying levels. As a consequence of ongoing increases in new order intakes, firms stepped up recruitment.

Manufacturing output increased at a sharp pace that was faster than in May, as underlying demand remained favourable and new business continued to flow in. June saw a stronger expansion in sales at manufacturers in India. Buoyant underlying demand, higher export volumes and successful advertising all fuelled growth, anecdotal evidence showed.

Further, the combined Index of Eight Core Industries (ICI) increased by 6.3% (provisional) in May, 2024 as compared to the Index in May, 2023. The production of Electricity, Coal, Steel, Natural Gas and Refinery Products recorded positive growth in May 2024.

The ICI measures the combined and individual performance of production of eight core industries viz. Cement, Coal, Crude Oil, Electricity, Fertilizers, Natural Gas, Refinery Products and Steel. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Furthermore, the India's fiscal deficit between April-May stood at around 3% of the overall target for FY25, at Rs 50,615 crore, down from 11.8% of the budget estimate in the corresponding period last year, according to the data released by the Controller General of Accounts.

The fiscal deficit stood at Rs 16.54 trillion in FY24, against the budgetary target of Rs 17.86 trillion. Aided by higher-than-expected tax receipts, the Union government contained the fiscal deficit at 5.6% of the gross domestic product (GDP) in 2023-24 (FY24), compared with the Revised Estimates of 5.8%.

The Centre has set an FY25 fiscal deficit target of 5.1%, or Rs 16.85 trillion, in order to achieve a fiscal deficit of 4.5% of GDP by FY26.

Meanwhile, the Indias foreign exchange reserves (forex reserves) increased by $816 million to $653.711 billion during the week ended June 21, according to the latest RBI data. In the preceding week, the overall reserves had dropped by $2.922 billion to $652.895 billion.

According to the latest RBI data released on June 28, Indias gold reserves rose $988 million to $56.956 billion during the week ended June 21, while the special drawing rights (SDRs) fell $57 million to $18.049 billion.

Derivatives:

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, added 1.32% to 13.99. The Nifty 25 July 2024 futures were trading at 24,180.40, at a premium of 56.7 points as compared with the spot at 24,123.70.

The Nifty option chain for the 25 July 2024 expiry showed maximum Call OI of 31.5 lakh contracts at the 24,000 strike price. Maximum Put OI of 38 lakh contracts were seen at 23,500 strike price.

Buzzing Index:

The Nifty Metal index rose 0.67% to 9,880.10. The index added 1.70% in the three consecutive trading sessions.

APL Apollo Tubes (up 4.48%), National Aluminium Company (up 2.61%), Ratnamani Metals & Tubes (up 2.03%), Vedanta (up 1.85%), NMDC (up 1.77%), Welspun Corp (up 1.18%), JSW Steel (up 1.1%), Hindustan Copper (up 1.08%), Jindal Steel & Power (up 0.81%) and Steel Authority of India (up 0.54%).

On the other hand, Hindustan Zinc (down 2.49%), Jindal Stainless (down 0.97%) and Adani Enterprises (down 0.38%) turned lower.

Stocks in Spotlight :

Alembic Pharmaceuticals rallied 4.04% after the pharma major said that it has received a tentative approval from US Food & Drug Administration (US FDA) for its abbreviated new drug application (ANDA) for Bosutinib tablets.

Indian Renewable Energy Development Agency (IREDA) advanced 3.08% after the companys loan sanctions stood Rs 9,136 crore in the June quarter, steeply higher than Rs 1,893 crore in the June quarter of last year.

Asian Paints rose 0.25%. The company announced that the installed capacity of the Mysuru plant has been doubled to 6,00,000 KL per annum in order to meet the medium-term capacity requirements of the company with an investment of Rs 1,305 crore.

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