Sensex, Nifty hit day's high; metal shares advance

The domestic equity barometers extended gains and hit the day's high in mid-morning trade. The Nifty hovered near the 15,850 mark. Value buying emerged after the Nifty slumped 4.27% in the past two sessions. Metal shares witnessed bargain hunting after declining in the past three sessions.

At 11:24 IST, the barometer index, the S&P BSE Sensex, was up 196.3 points or 0.37% to 53,043. The Nifty 50 index added 69.40 points or 0.44% to 15,843.80.

In the broader market, the S&P BSE Mid-Cap index rose 0.90% while the S&P BSE Small-Cap index added 0.79%.

The market breadth was weak. On the BSE, 2082 shares rose and 1036 shares fell. A total of 124 shares were unchanged.

While easing domestic inflation in May gave some hope to investors, recession fears in the US continued to loom large ahead of the US Fed's policy outcome due on Wednesday.

A major foreign brokerage has reported forecasted a 75-basis point (bp) interest rate hike from the Fed's June policy meeting on Wednesday. A 75-bp hike would reportedly be the biggest since 1994.

Economy:

India retail inflation eased to 7.04% in May, mainly on account of softening food prices, though it remained above the RBI's upper tolerance level for the fifth consecutive month, government data showed on Monday. The Consumer Price Index (CPI) based inflation was 7.79% in April. In May 2021, the retail inflation stood at 6.3%.

Buzzing Index:

The Nifty Metal index rose 1.75% to 5,087.35. The index had declined 6.51% in three sessions.

Ratnamani Metals & Tubes (up 1.84%), Steel Authority of India (up 1.82%), Hindustan Copper (up 1.81%) and Vedanta (up 1.69%) were the top gainers.

Among the other gainers were Jindal Steel & Power (up 1.53%), JSW Steel (up 1.48%), Tata Steel (up 1.33%), NMDC (up 1.14%) and Welspun Corp (up 0.98%).

On the other hand, Jindal Stainless (down 1.86%), APL Apollo Tubes (down 0.86%) and National Aluminium Company (down 0.41%) turned lower.

Adani Enterprises (AEL) rose 1.79%. AEL and TotalEnergies have entered into a new partnership to jointly create the world's largest green hydrogen ecosystem. In this strategic alliance, TotalEnergies will acquire 25% minority interest in Adani New Industries (ANIL) from AEL.

ANIL's ambition is to invest over USD 50 billion over the next 10 years in green hydrogen and associated ecosystem. In the initial phase, ANIL will develop green hydrogen production capacity of 1 million ton per annum before 2030.

Global markets:

The US Dow Jones futures were currently trading with a gain of 297 points, indicating a positive start to equities on Wall Street today.

Asian stocks traded lower on Tuesday after Wall Street hit a confirmed bear market milestone and bond yields struck a two-decade high on fears aggressive U.S. interest rate hikes would push the world's largest economy into recession.

US equities tumbled on Monday, with the S&P 500 confirming it is in a bear market, as fears grow that the expected aggressive interest rate hikes by the Federal Reserve would push the economy into a recession.

Investors are looking ahead to Wednesday when the Fed is expected to announce at least a half-point rate hike. The central bank has already raised rates twice this year, including a 50-basis-point increase in May in an effort to stave off the recent inflation surge. The Fed could even raise rates by 0.75% this week following Friday's CPI report, as per reports.

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