- India’s Nifty and Sensex bounces at open on Thursday after Wednesday’s negative close.
- On Wednesday, Nifty corrected from all-time high above 22,200, Sensex failed to sustain above 73,000.
- All eyes now remain on India and US PMI data and RBI Minutes after the hawkish Fed Minutes.
The Sensex 30 and Nifty 50, India’s key benchmark indices, opened marginally higher on Thursday, having settled in the negative territory on Wednesday.
Optimism on global stocks, thanks to the encouraging earnings report from the American tech-giant Nvidia, helped Indian indices stay afloat. The upbeat mood helped overshadow the market’s nervousness due to the hawkish US Federal Reserve (Fed) Minutes of the January meeting.
A modest uptick in the Gift Nifty futures indicated a positive start for the Indian indices on Thursday.
At the time of writing, the National Stock Exchange (NSE) Nifty 50 is edging 0.07% lower on the day to 22,038.40 in early trades while the Bombay Stock Exchange (BSE) Sensex 30 is down 72,554.56.
Stock market news
- Early Thursday, top gainers on Nifty were Eicher Motors, Grasim, HCL Tech, Axis Bank and Apollo Hospitals. Meanwhile, Powergrid, Bharti Airtel, Asian Paints, UPI Limited and BPCL are seen as the main losers.
- India’s benchmark indices snapped their six-day winning momentum on Wednesday, as sellers returned in the late trading amid a sharp decline in the IT, pharma and financial sector shares.
- Among the corporate news, shares of Zee Entertainment eroded nearly 15% after a Bloomberg report revealed an accounting issue of over INR20 billion ($241.36 million) in the company’s accounts.
- Maruti Suzuki India got an inquiry from the Directorate of Revenue Intelligence.
- Paytm shares continued to hit the upper circuit after falling at record lows.
- World Bank and others issued offshore India rupee bonds as demand soars.
- The US stock markets saw a mixed close on Wednesday.
- Nvidia released Q4 earnings after the close on Wednesday. Nvidia posted $5.16 earnings per share (EPS) vs. $4.64 expected while revenue stood at $22.10 billion vs. $20.62 billion expected. The AI pioneer said that it expected $24.0 billion in sales in the current quarter.
- The Fed Minutes stated, “Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent.”
- Markets are currently pricing in just about a 30% chance that the Fed could begin easing rates in May, much lower than an over 80% chance a month ago, according to the CME FedWatch Tool. For the June meeting, the probability for a rate cut now stands at 70%, down from 77% seen a day ago.
- People’s Bank of China (PBoC) cut the five-year Loan Prime Rate (LPR) by a record 25 bps from 4.20% to 3.95%. The PBOC rate cut failed to excite traders on Tuesday.
- India’s trade data for January showed last week a shrinking Trade Deficit of $17.49 billion.
- Attention now turns toward the Minutes of the RBI meeting, preliminary PMI data from India and the United States due later on Thursday.
Nifty 50 FAQs
The Nifty 50, or simply Nifty, is the most commonly followed stock index in India. It was launched in 1996 by the National Stock Exchange of India (NSE). It plots the weighted average share price of 50 of the largest Indian corporations, offering investors comprehensive exposure to 13 sectors of the economy. Each corporation’s weighting is based on its “free-float capitalization”, or the value of all its shares readily available for trading.
The Nifty is a composite so its value is dependent on the performance of the companies that make up the index, as revealed in their quarterly and annual results. Another factor is government policies, such as when in 2016 the government decided to demonetize 500 and 1000 Rupee banknotes. This led to a temporary cash shortage which negatively impacted the Nifty. The level of interest rates set by the Reserve Bank of India is a further factor as it determines the cost of borrowing. Climate change, pandemics and natural disasters are also drivers.
The Nifty 50 was launched on April 22, 1996 at a base level of 1,000. Its highest recorded level to date is 22,097 achieved on January 15, 2024 (this is being written in Feb 2024). The index first closed above the 10,000 level on October 17, 2017. The Nifty recorded its biggest daily decline on March 23, 2020 during the Covid pandemic, when it fell 1,125 points or 12.37%. The Nifty’s biggest gain in a single day occurred on May 18, 2009, when it rose 651 points after the results of the Indian elections.
Major corporations in the Nifty 50 include HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd and Kotak Mahendra Bank.
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