Bulls hold grip over Dalal Street

Bulls were holding a tight grip over the Dalal street in late morning session, with both Sensex and Nifty trading on a strong note, tracking positive cues from other Asian markets. Domestic sentiments remained optimistic, after the Reserve Bank of India said in its latest monthly bulletin that the Indian economy remains resilient despite formidable global headwinds and amidst fears of a recession. The bulletin said that in spite of geopolitical spillovers, 'There are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession'. Some support also came after Agriculture Minister Narendra Singh Tomar expressed hope that monsoon rains, which are crucial for Kharif sowing, will progress in the coming days and said it is too early to comment on the paddy acreage.

On the global front, Asian markets were trading in green, as Indonesia's trade surplus rose in June, as exports strongly increased, and much faster than imports. The figures from Statistics Indonesia showed that the trade surplus increased $5.09 billion in June from $1.33 billion in the same month last year. In May, the trade surplus was $2.90 billion.

The BSE Sensex is currently trading at 54286.62, up by 525.84 points or 0.98% after trading in a range of 54034.97 and 54323.40. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.10%, while Small cap index was up by 1.21%.

The top gaining sectoral indices on the BSE were IT up by 3.10%, TECK up by 2.83%, Metal up by 2.34%, Capital Goods up by 2.11% and Basic Materials up by 1.69%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.98%, Infosys up by 3.94%, Indusind Bank up by 2.83%, Larsen & Toubro up by 2.69% and TCS up by 2.63%. On the flip side, HDFC Bank down by 1.39%, HDFC down by 1.00%, Dr. Reddy's Lab down by 0.75% and Mahindra & Mahindra down by 0.72% were the top losers.

Meanwhile, Credit Rating Agency ICRA in its latest report has said that states have budgeted 36 per cent higher capital expenditure during this financial year (FY23), which may lead to a sharp rise in their fiscal deficit to Rs 8.4 lakh crore. It noted that registering an increase of 34.1 per cent from the pre-pandemic (FY20) levels, 26 large states, excluding Assam, have spent Rs 5 lakh crore in capital expenditure, or Rs 1.3 lakh crore more than they had spent in FY20.

According to the report, these 26 states are on course to spend Rs 6.8 lakh crore or 35.8 per cent more this fiscal in capital expenditure (capex) over FY22 when it stood at Rs 5 lakh crore. As much as 72 per cent of the incremental Rs 1.8 lakh crore capital push is led by UP, Maharashtra, Bengal, Odisha, Andhra and Haryana. In the previous fiscal, the capex push was led by Bihar, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Telangana, Tamil Nadu and Uttar Pradesh.

The report further said the combined capex of these 26 states is budgeted to expand by an impressive 35.8 per cent to Rs 6.8 lakh crore in FY23, on top of the 34.1 per cent or Rs 5 lakh crore they spent in FY22. In FY20, they spent Rs 3.7 lakh crore in capex, while FY21 was a washout due to the pandemic. The report also noted that with this aggressive capex push, these states will also see their fiscal deficits widening sharply to Rs 8.4 lakh crore in FY23, from Rs 6.3 lakh crore in FY22, and much higher than Rs 4.8 lakh crore in FY20. However, it said deficit was higher in FY21 at Rs 7.9 lakh crore due the higher pandemic expenses and lower revenue.

The CNX Nifty is currently trading at 16211.95, up by 162.75 points or 1.01% after trading in a range of 16142.20 and 16220.40. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Infosys up by 4.04%, Hindalco up by 3.95%, Tech Mahindra up by 3.85%, Indusind Bank up by 2.86% and ONGC up by 2.73%. On the flip side, Britannia down by 1.43%, HDFC Bank down by 1.29%, HDFC down by 0.97%, Dr. Reddy's Lab down by 0.89% and Mahindra & Mahindra down by 0.67% were the top losers.

Asian markets were trading in green; Taiwan Weighted strengthened 114.44 points or 0.79% to 14,665.06, Jakarta Composite soared 0.12 points to 6,652.03, Straits Times advanced 17.36 points or 0.56% to 3,116.51, KOSPI rose 41.61 points or 1.79% to 2,372.59, Shanghai Composite gained 48.11 points or 1.49% to 3,276.17 and Hang Seng increased 523.15 points or 2.58% to 20,820.87.