Sensex closes higher on Tuesday, focus remains on India/ US CPI data

India’s Sensex pared recovery gains to close in the green below 74,000 on Tuesday.
Sensex corrected further on Monday amid profit-taking before Tuesday’s key event risks.
All eyes remain on the US and Indian CPI inflation data slated for release later on Tuesday.

The Sensex 30, one of India’s key benchmark indices, struggled to hold on to recovery gains but settled in positive territory on Tuesday.

The upswing in the Gift Nifty futures suggested a positive start to Tuesday’s trading for Sensex. Positive European equities, firm US S&P 500 futures and strong gains in the technology sector stocks underpinned the rebound in the Indian index.

But traders turned cautious, closing into the release of the critical Consumer Price Index (CPI) inflation data from India and the US.

The Bombay Stock Exchange (BSE) Sensex 30 is up 0.22% on the day at 73,667.96.

Stock market news

The top gainers on Sensex on Tuesday were HDFC Bank, TCS, Reliance Industries, Maruti Suzuki and Infosys. Meanwhile, the top losers include ITC, JSW Steel, NTPC, Nestle and SBI Bank.
FMCG and metals sectors stocks were a drag on Sensex but the rally in the technology stocks came to the rescue of buyers.
Shares of Zomato rose as much as 2.0% on a strong ad revenue forecast.
Shares of steel-related companies in Asia dropped, following iron ore’s biggest slide since 2022. Dalian iron ore hits five-month low on weak sentiment amid subdued demand in top consumer China.
British American Tobacco (BAT) is reportedly gearing up for a much-anticipated sale of its stake in ITC within the next fortnight, according to two individuals familiar with the development. ITC shares slide over 2.0%.
China’s state-backed developer Vanke Co. declined after Moody’s Ratings stripped the company’s investment-grade credit rating and warned of potential further cuts.
Wipro expanded its partnership with Nutanix to launch a new Nutanix-focused business unit.
The US stock markets closed mixed on Monday, as investors resorted to profit-taking amid high valuations and gearing up for the critical US inflation report.
On Friday, the headline NFP rose by 275K in February, compared to market forecasts of 200K while the January figure of 353K was revised down to 229K, a difference of 124K.
Markets are currently pricing in about a 70% chance that the Fed could begin easing rates in June, a tad lower than a 75% probability seen Monday, according to the CME FedWatch Tool.
The main event risks for markets this week will be the inflation data releases from India and the US.

Sensex FAQs

What is the Sensex?

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.

What factors drive the Sensex?

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

What are the key milestones for the Sensex?

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.

What major corporations are in the Sensex?

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.

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