Benchmarks trade in green terrain in morning deals

Swinging between gains and losses, Indian equity benchmarks were now trading in green terrain in morning deals, led by gains in Metal, PSU and Oil & Gas stocks. Traders took some support with data showing that India's fiscal deficit stood at 6.7 percent of GDP in 2021-22 on higher tax receipts and prudent expenditure, lower than 6.9 percent estimated in the national budget tabled in February. The improved fiscal performance will reduce the extent of fiscal roll back required in the current fiscal year compared to the last. Some support also came with India Meteorological Department Director General Mrutyunjay Mohapatra’s statement that the average rainfall this monsoon season is expected to be 103% of the long period average. India can expect more rainfall this monsoon season than predicted earlier. In April, the IMD had said the country would receive normal rainfall -- 99% of the long period average.

On the global front, Asian markets are trading mixed amid signs that China's economic pain may be gradually abating amid easing COVID-19 curbs overshadowed broader investor concerns about a global inflation shock. Besides, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to expand in May, albeit at a slower pace, with a manufacturing PMI score of 53.3. That's down from 53.5 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex is currently trading at 55659.15, up by 92.74 points or 0.17% after trading in a range of 55407.47 and 55791.49. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.47%, while Small cap index was up by 1.08%.

The top gaining sectoral indices on the BSE were Metal up by 1.37%, PSU up by 1.10%, Oil & Gas up by 1.08%, Energy up by 1.06% and Capital Goods up by 0.89%, while Power down by 0.70%, Utilities down by 0.69%, Auto down by 0.36%, Realty down by 0.26% and TECK down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.31%, Asian Paints up by 1.74%, Tata Steel up by 1.74%, ITC up by 0.87% and Maruti Suzuki up by 0.65%. On the flip side, Sun Pharma down by 1.10%, Hindustan Unilever down by 1.05%, Nestle down by 1.00%, Tech Mahindra down by 0.94% and Ultratech Cement down by 0.93% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) V Anantha Nageswaran has ruled out the risk of stagflation for India, saying the economy is better placed than other nations. Stagflation is the phase when an economy faces moderation in GDP growth as well as high inflation. He stated that ‘Compared to the experience of many developed and developing countries, India is somewhat better placed and more importantly both central bank and the government are seized of the problem under addressing them. I would at this stage say that stagflationary risks for India are quite low compared to the rest of the world.’

The Indian economy grew at its slowest pace in a year during January-March at 4.1 per cent, pulling down the GDP growth in the full fiscal 2021-22 to 8.7 per cent. On the sequential low growth, Nageswaran said it is because of the Omicron wave that the nation experienced in January. He pointed out considering the fears and concerns expressed by many, the year-on-year growth rate at 4.1 per cent indicating that the momentum is intact and if you look at April numbers on GST, etc, there is considerable momentum in economic activity.

Besides, he ruled out recession hitting India, given its macroeconomic fundamentals. Stressing that the domestic financial sector is in better shape to support growth, he said as recovery gathers momentum, private sector investment would also pick up. India is better placed than others to weather the storm and consolidate the growth story that has built in quite nicely over 2021-22, he said, adding comfortable foreign exchange reserves also act as a cushion again external shocks.

The CNX Nifty is currently trading at 16608.35, up by 23.80 points or 0.14% after trading in a range of 16537.90 and 16649.20. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 3.62%, NTPC up by 2.40%, Tata Steel up by 1.80%, Asian Paints up by 1.76% and Tata Consumer Product up by 1.61%. On the flip side, Bajaj Auto down by 2.98%, Hindustan Unilever down by 1.20%, Sun Pharma down by 1.13%, Hindalco down by 1.03% and Britannia Inds down by 0.98% were the top losers.

Asian markets are trading mixed; Shanghai Composite declined 4.32 points or 0.14% to 3,182.11, Taiwan Weighted dropped 91.89 points or 0.55% to 16,715.88 and Hang Seng decreased 147.45 points or 0.69% to 21,267.75. On the flip side, Nikkei 225 surged 190.28 points or 0.7% to 27,470.08 and Straits Times advanced 17.63 points or 0.55% to 3,250.12.