Indian markets maintain upward momentum

Indian equity markets maintained their upward momentum in morning session helped by heavy buying in IT, TECK and Realty counters amid a rally in global markets after encouraging US inflation data. Broader indices, BSE Mid cap and Small cap were also showing positive trend. A strong rupee against major rivals and continuous buying by foreign funds added to the momentum. Traders took support with S&P Global Ratings stating that about half of the Indian companies that it rates are getting a boost in their core profitability from rupee depreciation. It said ‘much of our rated India corporate portfolio has sizable US-dollar linked revenue and, therefore, is not exposed to rupee depreciation. This encompasses entities in the IT, metals, and chemicals sectors. About half of the firms we rate are getting an EBITDA boost from currency weakening.’ Some strength also came as State Bank of India has pencilled in lower current account deficit at 3 per cent for this fiscal as against the minimum consensus of 3.5 per cent, citing rising software exports, remittances and a likely $5-billion jump in forex reserves via swap deals.

On the global front, Asian markets are trading in green after a smaller-than-expected increase in U.S. consumer prices fuelled hopes that the Federal Reserve could tone down its aggressive pace of interest rate hikes. Back home, FMCG industry stocks remained in focus with a private report that the country's FMCG industry continued to witness consumption slowdown in the September quarter, with rural markets registering a higher decline in volumes compared to the three months ended June.

The BSE Sensex is currently trading at 61509.81, up by 896.11 points or 1.48% after trading in a range of 61311.02 and 61685.51. All 30 stocks advancing on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.43%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were IT up by 3.58%, TECK up by 3.18%, Realty up by 1.53%, Metal up by 1.51% and Consumer Durables up by 1.30%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Infosys up by 4.24%, HCL Technologies up by 3.83%, TCS up by 3.74%, Tech Mahindra up by 3.37% and Wipro up by 3.12%.

Meanwhile, CRISIL in its latest report has said that the aggregate indebtedness of states - measured by debt to gross state domestic product (GSDP) - is expected to remain elevated at 30-31% this fiscal (FY23), almost similar to 31.5% seen in fiscal 2022. It stated sticky revenue expenditure and the need for higher capital outlays, along with modest revenue growth, will keep borrowings up this fiscal.

That said, the Centre’s announcement last budget to provide special assistance of Rs 1 lakh crore to all states for capital spending will provide some respite. CRISIL’s study of the top 18 states, which account for 90% of the aggregate GSDP, shows that states borrow mainly to fund deficits on the revenue account and incur capital outlays.

Indebtedness had risen to a decadal high of 34% in fiscal 2021 (after remaining rangebound between 25-30% during fiscal 2016-2020) before cooling a tad to 31.5% in fiscal 2022. In fact, states saw a small surplus on the revenue account in fiscal 2022, owing to a healthy revenue growth of 25% on-year supported by healthy GST collections, strong devolutions from the central government, recovery in sales tax collections from fuel and support from central government through GST compensation loans.

The CNX Nifty is currently trading at 18298.40, up by 270.20 points or 1.50% after trading in a range of 18259.35 and 18332.20. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Infosys up by 4.28%, Apollo Hospital up by 4.24%, HCL Technologies up by 3.87%, TCS up by 3.75% and Tech Mahindra up by 3.50%. On the flip side, Eicher Motors down by 3.28%, Hero MotoCorp down by 0.95%, Britannia Industries down by 0.03% and Mahindra & Mahindra down by 0.02% were the top losers.

Asian markets are trading in green; Taiwan Weighted strengthened 495.94 points or 3.67% to 13,999.70, KOSPI rose 72.75 points or 3.03% to 2,474.98, Jakarta Composite soared 84.39 points or 1.21% to 7,051.23, Straits Times advanced 48.45 points or 1.53% to 3,221.63, Shanghai Composite gained 45.72 points or 1.51% to 3,081.85, Nikkei 225 surged 797.92 points or 2.91% to 28,244.02 and Hang Seng increased 881.51 points or 5.48% to 16,962.55.