NIFTY BELOW 19,500 LEVEL; FINANCIAL SERVICES ADVANCE

The domestic indices sharply pared gains in the mid-afternoon trade. The Nifty traded below the 19,500 level after hitting day`s high of 19,567 in morning trade. Financial Services shares witnessed buying demand after declining for the five trading session. Trading was volatile due to expiry of weekly index options on the NSE.

At 14:27 IST, the barometer index, the S&P BSE Sensex, was up 354.53 points or 0.54% to 65,748.43. The Nifty 50 index added 86.50 points or 0.45% to 19,470.80.

The Nifty and the Sensex hit all-time highs in afternoon trade at 19,567 and 66,064.21, respectively.

The broader market underperformed the headline indices. The S&P BSE Mid-Cap index shed 0.57% while the S&P BSE Small-Cap index lost 0.35%.

The market breadth turned weak. On the BSE, 1316 shares rose and 2073 shares fell. A total of 148 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.

Buzzing Index:

The Nifty Financial Services index rose 0.70% to 20,063.10. The index declined 1.71% in the past four trading sessions.

TruCap Finance (up 9.95%), Anand Rathi Wealth (up 7.93%), PB Fintech (up 3.31%), GIC Housing Finance (up 2.44%), Abans Holdings (up 2.38%), 5Paisa Capital (up 2.07%), Angel One (up 1.79%), Fino Payments Bank (up 1.76%), Motilal Oswal Financial Services (up 1.74%) and Fusion Micro Finance (up 1.55%) advanced.

On the other hand, Spandana Sphoorty Financial (down 5.51%), Bank of Maharashtra (down 5%) and Punjab & Sind Bank (down 4.92%) declined.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper fell 0.62% to 7.074 from its previous close of 7.118.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.07, compared with its close of 82.1800 during the previous trading session.

MCX Gold futures for 4 August 2023 settlement advanced 0.10% to Rs 59,248.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.21% to 100.31

The United States 10-year bond yield declined 1.14% to 3.819.

In the commodities market, Brent crude for September 2023 settlement gained 26 cents or 0.32% to $80.37 a barrel.

Stocks in Spotlight:

Granules India declined 2.06%. The company informed that the US drug regulator issued an establishment inspection report (EIR) for Gagillapur facility of the company located in Hyderabad.

Mangalore Refinery & Petrochemicals (MRPL) tumbled 2.43%. The company said that it has appointed Vivek Chandrakant Tongaonkar as chief financial officer (CFO) for term of 5 years in place of Yogish Nayak S with effect from May 24, 2023.

G R Infraprojects rose 0.47% after the company received letter of award (LoA) from Ministry of Road Transport and Highways (MRTH) to construct highway in Uttar Pradesh.

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