Mid-day Mood | Market extends early gains, strong Q1 GDP growth aids sentiment

Stock Market Today

The benchmark indices shrugged early jitters to extend gains to the afternoon trade after a positive start on September 1 as encouraging GDP numbers for the first quarter of the current financial year aided sentiment.

Around noon, the Sensex was up 234.42 points, or 0.36 percent, at 65,065.83  and the Nifty was up 87.20 points, or 0.45 percent, at 19,341.00. About 1,856 shares advanced, 1,149 declined and 110 were unchanged.

India posted a GDP growth rate of 7.8 percent for the June quarter following which foreign firms Nomura and Deutsche Bank raised their FY24 growth forecast by 40 and 20 basis points. Nomura's new FY24 growth projection for India is 5.9 percent, while Deutsche Bank's is at 6.2 percent.

"This is India’s fastest growth in a year which was driven by services sectors. The expansion in GDP can be linked to the Centre and states’ upping their kitty on capital projects, heightened consumption demand and increased impetus within the services sector,” Dhawal Ghanshyam Dhanani, Fund Manager, SAMCO Mutual Fund, said.

“Resilient growth would attract stability in overseas flows along with cheer from domestic institutional investors and this would act as a breather to Indian equity markets for the time being," Dhanani said.

Nonetheless, some caution also persisted ahead of the release of the US non-farm payrolls data for August, due later in the day, which capped the gains.

Most sectors were trading in the green, cementing the upmove in the market. Automobiles, energy and metals were the top sectoral gainers.

Auto stocks reacted to the monthly sales data, with Bajaj Auto, Maruti Suzuki, Tata Motors and TVS Motor jumping 1-2 percent, which triggered an over a percent rise in the Nifty auto index.

Shares of Oil and Natural Gas Corp were the top gainers on the Nifty 50 list after it zoomed 5 percent to hit a 52-week high. It came after Fitch Ratings affirmed a BBB rating (stable outlook) for the PSU. Gains in ONGC lifted the Nifty Energy index nearly 2 percent higher.

Among laggards, investors booked partial profits off pharma names such as Divi's Labs and Dr Reddy's, which dragged the Nifty pharma into the red.

Broader market indices also traded with gains. The Nifty smallcap 100 surged 1 percent, while the midcap 100 index rose 0.6 percent, outperforming the headline Nifty50.

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