After a substantial slump in the previous session, domestic equity benchmark indices opened on Thursday on a positive note. Sensex slumped 709 points the previous session, dragged by a selloff in heavyweight Reliance Industries shares.
“Today, markets are likely to make cautious start amid weak global cues. Traders will be concerned as the Reserve Bank said India witnessed a current account deficit of 1.2 per cent of GDP in 2021-22 against a surplus of 0.9 percent in FY2020-21 due to a wider trade deficit,” said Mohit Nigam, Head – PMS at Hem Securities. There will be some cautiousness as the Minutes of the central bank’s meeting showed that the RBI Governor Shaktikanta Das has cautioned that continued high inflation is a major concern for the economy, even as economic activities are gaining traction while voting for a 50 basis points hike in the key interest rate or repo rate to check price rise.
At 9.24 a.m, Sensex was at 51,970.16 points, up 147.63 points or 0.28 per cent, whereas nifty was at15,492.40 points, up 79.10 points or 0.51 per cent. Among the individual stocks, Apollo Hospitals, ONGC, UPL, Titan, and Power Grid Corporation of India were the top five losers in the morning session, while Hero Motocorp, Bajaj Auto, Bharti Airtel, Tata Motors, and Wipro were the top five gainers, National Stock Exchange data showed.
Notably, domestic indices had declined during the majority of the sessions in June so far. The depreciation in rupee also seemed to have weighed on the equity indices. “The sentiments have taken a hit amid deteriorating global growth prospects and as the central banks look to act aggressively in their battle against inflationary forces,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research at Religare Broking.
“Meanwhile, market participants are looking forward to Fed Chair Powell’s two-day testimony to the Congress for further clues as to whether the US central bank is poised to deliver another large rate hike at its July meeting,” said Sachdeva, adding that it will provide further cues for the Indian rupee going forward. Indian currency rupee on Wednesday touched a fresh low of 78.29 per US dollar, primarily due to growing concerns about rising inflation.