Market Commentary     12-Jun-24
Mid-Session
Indices trade with moderate gains; PSU bank stocks rally for 6th day
The headline equity indices traded with decent gains in mid-morning trade. The Nifty traded above the 23,350 mark. PSU Bank shares surged for the sixth consecutive trading session.

At 11:30 IST, the barometer index, the S&P BSE Sensex, was up 339.24 points or 0.44% to 76,781.18. The Nifty 50 index added 109.85 points or 0.47% to 23,374.70.

The Nifty 50 hit an all-time high at 23,441.95 in mid-morning trade.

In the broader market, the S&P BSE Mid-Cap index added 0.97 % and the S&P BSE Small-Cap index gained 0.97%.

The market breadth was strong. On the BSE, 2,612 shares rose and 1,075 shares fell. A total of 140 shares were unchanged.

Economy:

India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate, the World Bank said in its latest biannual Global Economic Prospects. After a high growth rate in FY2023/24, steady growth of 6.7% per year, on average, is projected for the three fiscal years beginning in FY2024/25. Growth is estimated to have picked up to 8.2% in fiscal year (FY) 2023/24 (April 2023 to March 2024)—1.9% points higher than estimated in January.

Growth in industrial activity, including manufacturing and construction, was stronger than expected, alongside resilient services activity, which helped offset a slowdown in agricultural production partly caused by monsoons. Growth of domestic demand remained robust, with a surge in investment, including in infrastructure, offsetting a moderation of consumption growth as postpandemic pent-up demand eased.

Meanwhile, the moderation is mainly due to a slowdown in investment from a high base, the Bank stated. However, investment growth is still expected to be stronger than previously envisaged and remain robust over the forecast period, with strong public investment accompanied by private investment. Private consumption growth is expected to benefit from a recovery of agricultural production and declining inflation. Government consumption is projected to grow only slowly, in line with the government’s aim of reducing current expenditure relative to GDP.

IPO Update:

The initial public offer (IPO) of Le Travenues Technology (Ixigo) received 15,71,67,234 bids for shares as against 4,37,69,494 shares on offer, according to stock exchange data at 11.30 IST on Wednesday (12 June 2024). The issue was subscribed 3.59 times.

The issue opened for bidding on Monday (10 June 2024) and it will close on Wednesday (12 June 2024). The price band of the IPO is fixed at Rs 88 to 93 per share. An investor can bid for a minimum of 161 equity shares and in multiples thereof.

Buzzing Index:

The Nifty PSU Bank index added 1.44% to 7,450.20. The index rallied 9.65% in the six consecutive trading sessions.

Central Bank of India (up 3.94%), Indian Overseas Bank (up 2.96%), UCO Bank (up 2.65%), Bank of Baroda (up 1.97%), Bank of Maharashtra (up 1.82%) Punjab & Sind Bank (up 1.73%), Canara Bank (up 1.44%), Bank of India (up 1.21%), Union Bank of India (up 1.16%) and Punjab National Bank (up 0.96%) edged higher.

On the other hand, Indian Bank (down 0.59%), edged lower.

Stocks in Spotlight:

B L Kashyap and Sons rose 0.78%. The company received letter of intent (LoI) for two orders aggregating up to Rs 1,021 crore.

Glenmark Pharmaceuticals (Glenmark) rose 0.50%. The company announced that it has received a final approval from the United States Food and Drug Administration (USFDA) for Esomeprazole Magnesium delayed-release capsules.

Global Markets:

Asian stocks traded mixed on Wednesday as jitters from US inflation data and the upcoming Federal Reserve decision weighed on markets. The Fed's monetary policy remains a key concern for Asian investors, even with Southeast Asian currencies facing important support levels.

Despite US indices closing at record highs on Tuesday, fueled by Apple's surge, investor focus shifted to today's events. The release of May's Consumer Price Index (CPI) and the Federal Reserve interest rate decision are crucial factors shaping market sentiment. The two-day Fed meeting is expected to maintain current interest rates, which are at a two-decade high.

The S&P 500 gained 0.3% and the Nasdaq jumped 0.9% on Tuesday, with Apple reaching an all-time high. The Dow Jones, however, shed 0.3%.

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