Markets trade in fine-fettle in early deals; Nifty at 17,700 mark

Indian equity benchmarks made optimistic start on Thursday tracking firm global cues. Markets are trading in fine-fettle with over half a percent gains in early deals on account of buying in all the sector indices led by Realty, PSU and Power. Broader indices are outperforming larger peers with gains of around 0.80%. Traders took note of Reserve Bank of India (RBI) Monetary Policy Committee (MPC) member Jayanth R Varma’s statement that inflation must be brought down to the medium-term target of 4 percent as quickly as possible while ensuring rate increases do not hurt the economy drastically. Besides, Commerce and industry minister Piyush Goyal said that India should aim at $20 billion of marine export in the next five years. Though, traders overlooked Crisil's report that States' revenue growth will slide to 7-9 per cent in FY23 even as handsome GST collections will help in the accretion. It said the revenue growth had galloped 25 per cent in FY22 courtesy a lower base in the pandemic-affected FY21.

Most of the Asian markets are trading higher following the broadly positive cues from Wall Street overnight, as traders indulged in picking up stocks at a bargain after stocks in the region mostly fell for an eighth straight session. China's pledge of more steps to shore up its economy is also aiding market sentiment. Trading in Hong Kong is delayed due to a typhoon warning. Trading in securities market will resume in the afternoon after the threat from typhoon Ma-on to the city was downgraded.

Back home, banking stocks were in focus as the former chairman of the statistical commission said India's banking sector is faced with the predicament of a massive asset-liability mismatch that could explode anytime, and there is a need to reassess laws governing the industry. In stock specific developments, IDBI Bank rallied on reports that the government is mulling selling at least 51 percent stake in the bank. NHPC gained after its subsidiary signed MoU with the government of Rajasthan.

The BSE Sensex is currently trading at 59416.84, up by 331.41 points or 0.56% after trading in a range of 59290.94 and 59450.20. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index soared 0.88%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Realty up by 1.37%, PSU up by 1.13%, Power up by 0.99%, Consumer Durables up by 0.96%, Utilities up by 0.96%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Indusind Bank up by 1.17%, Hindustan Unilever up by 1.17%, Bajaj Finserv up by 1.11%, SBI up by 1.09% and Maruti Suzuki up by 0.97%. On the flip side, HCL Technologies down by 0.35% was the sole loser.

Meanwhile, rating agency Crisil in its latest report has said that States’ revenue growth will slide to 7-9 per cent in FY23 even as handsome Goods and Services Tax (GST) collections will help in the accretion. It said that the revenue growth had galloped 25 per cent in FY22 courtesy a lower base in the pandemic-affected FY21. In FY23, it said healthy tax buoyancy will be supporting the revenue growth, with GST collections and devolutions from the Centre - which together comprise up to 45 per cent of the states’ revenue - expected to show robust double-digit growth.  It said a flattish or low single-digit growth in sales tax collections from petroleum products (8-9 per cent of total revenue) and grants recommended by the Fifteenth Finance Commission (13-15 per cent) will be acting as the moderating factors.

The agency said the share of states in central taxes is expected to grow further this fiscal, and added that while the proportions are determined by the Finance Commission, the overall kitty is linked with the central government’s gross tax collections. It also said this pool, which expanded 40 per cent last fiscal, should further grow by 15 per cent this fiscal. Fuel tax collections are expected to be almost unchanged because gains from a 25 per cent increase in crude price and better sales volumes will be offset by the reduction in central excise on petrol and diesel in November 2021 and May 2022, and sales tax cuts by some states.

It further said Centre’s grants, including Centrally Sponsored Schemes, Finance Commission grants and revenue deficit, are likely to see only marginal growth this fiscal. Additionally, GST compensation payments, which were 7-9 per cent of revenue in past two fiscals, will also end, with the expiration of the compensation period on July 1, 2022. It said the outlook is based on an assumption of real GDP growth at 7.3 per cent and no lockdown-related impacts, and added that a slowdown in economic activity due to higher-than-expected inflationary pressures could negatively impact revenue.

The CNX Nifty is currently trading at 17700.25, up by 95.30 points or 0.54% after trading in a range of 17659.25 and 17709.55. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.10%, Divi's Lab up by 1.61%, SBI Life Insurance up by 1.37%, Indusind Bank up by 1.19% and Coal India up by 1.16%. On the flip side, Cipla down by 0.50%, HCL Technologies down by 0.38%, Adani Ports & SEZ down by 0.08% and Apollo Hospital down by 0.08% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 178.98 points or 0.63% to 28,492.45, Straits Times added 6.05 points or 0.19% to 3,239.53, Taiwan Weighted jumped 113.38 points or 0.75% to 15,182.57, KOSPI rose 23.16 points or 0.95% to 2,470.61 and Shanghai Composite was up by 13.06 points or 0.41% to 3,228.26, while Jakarta Composite was down by 39.33 points or 0.55% to 7,155.38.