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- Sensex closed Thursday with moderate gains after Wednesday’s bloodbath.
- India’s Sensex rebounded on RBI easing expectations, IT stocks rally.
- The focus now remains on the key US Retail Sales and PPI inflation data.
The Sensex 30, one of India’s key benchmark indices, held onto its recovery and ended higher on Thursday, having lost over one percent on Wednesday.
Cooling Wholesale Price Index (WPI) inflation in India fanned bets of early interest rate cuts by the Reserve Bank of India (RBI), offering a fresh boost to the Indian index.
The Bombay Stock Exchange (BSE) Sensex 30 closed 0.46% higher on the day at 73,097.28, bouncing off support near 72,500.
Stock market news
- Thursday’s top performers on Sensex were Wipro, Infosys, HCL Tech, Bharti Airtel and Mahindra & Mahindra. Meanwhile, the top losers included Axis Bank, IndusInd Bank, JSW Steel, SBI Bank and Bajaj Finance.
- Data on Thursday showed that India’s February WPI inflation eased to 0.20% versus 0.27% in January, hitting a four-month low.
- Bharti Airtel expanded its network footprint in the Alappuzha district.
- Larsen & Toubro bagged a major gas pipeline project in the Middle East.
- India’s rising valuations prompted investors and foreign companies to sell their holdings on Wednesday.
- According to a risk disclosure format that the Association of Mutual Funds in India (Amfi) has shared with fund houses, Mutual Funds (MFs) will have to disclose the total investment of the top 10 investors in two active schemes.
- In adherence to the Amfi regulation, MFs are poised to release their inaugural stress test reports later this week but this will necessitate additional disclosures.
- Shares of Powergrid and NTPC tanked nearly 7.0% on Wednesday.
- Shares of ITC rebounded amid an expected 3.50% stake sale by British American Tobacco (BAT) in the company on Wednesday.
- Indian government allowed the Reserve Bank of India (RBI) to import gold without paying import levies.
- The US stock markets failed to sustain the previous rebound and closed mixed on Wednesday, as investors now look for more US economic data after the US Consumer Price Index (CPI) report failed to have any impact on the June Fed rate cut expectations.
- The US CPI rose 3.2% in February from a year ago, beating the market forecast of 3.1%. The monthly CPI increased 0.4% in the same period. Core CPI, which excludes food and energy prices, increased 0.4% from the last month and 3.8% over the year.
- Markets continue to price in about a 70% chance that the Fed could begin easing rates in June, according to the CME FedWatch Tool.
- Attention now turns toward the US Retail Sales and Producer Price Index (PPI) data due later on Thursday.
Sensex FAQs
The Sensex is a name for one of India’s most closely monitored stock indexes. The term was coined in the 1980s by analyst Deepak Mohoni by mashing the words sensitive and index together. The index plots a weighted average of the share price of 30 of the most established stocks on the Bombay Stock Exchange. Each corporation’s weighting is based on its “free-float capitalization”, or the value of all its shares readily available for trading.
Given it is a composite, the value of the Sensex is first and foremost dependent on the performance of its constituent companies as revealed in their quarterly and annual results. Government policies are another factor. In 2016 the government decided to phase out high value currency notes, for example, and certain companies saw their share price fall as a result. When the government decided to cut corporation tax in 2019, meanwhile, the Sensex gained a boost. Other factors include the level of interest rates set by the Reserve Bank of India, since that dictates the cost of borrowing, climate change, pandemics and natural disasters
The Sensex started life on April 1 1979 at a base level of 100. It reached its highest recorded level so far, at 73,328, on Monday, January 15, 2024 (this is being written in Feb 2024). The Index closed above the 10,000 mark for the first time on February 7, 2006. On March 13, 2014 the Sensex closed higher than Hong Kong’s Hang Seng index to become the major Asian stock index with the highest value. The index’s biggest gain in a single day occurred on April 7, 2020, when it rose 2,476 points; its deepest single-day loss occurred on January 21, 2008, when it plunged 1,408 points due the US subprime crisis.
Major companies within the Sensex include Reliance Industries Ltd, HDFC Bank, Axis Bank, ITC Ltd, Bharti Airtel Ltd, Tata Steel, HCL Technologies, Infosys, State Bank of India, Sun Pharma, Tata Consultancy Services and Tech Mahindra.
