Markets trade higher with marginal gains in early deals

Indian equity benchmarks made positive start on Wednesday following strong global cues. Markets are trading higher in early deals with gains of around 0.20% each. Sensex and Nifty were trading above their physiological levels of 61,500 and 18,250, respectively. Sentiments got a boost as the Organisation for Economic Cooperation and Development (OECD), the Paris-based intergovernmental body that focuses on economic policy reports in its latest Economic Outlook said that India, with a growth rate of 6.6 per cent in this financial year, is set to be the second-fastest growing economy in the G20 in FY 2022-23 behind Saudi Arabia, despite decelerating global demand and the tightening of monetary policy to manage inflationary pressures. Adding more optimism, Moody's Investors Service said the trend of gradual fiscal consolidation remains intact for India and going forward the country will see strong revenue performance and debt stablisation. Besides, commerce and industry minister Piyush Goyal said the proposed free trade agreement (FTA) between India and the UK is a high priority for both the countries and the next round of negotiations for the pact is slated to happen next month.

Global cues remained supportive with most of the Asian markets trading higher, following the broadly positive cues from US markets overnight, as traders continued to express optimism about the US Fed slowing the pace of its interest rate hikes despite some hawkish comments from Fed officials. However, lingering concerns about inflation, geopolitical tensions, and a surge in COVID-19 cases in China remain. The Japanese stock market is closed on account of Worker's Day holiday. Back home, telecom stocks were in focus as telecom regulator's data showed that India's total mobile subscriber base fell by 3.6 million in September, with Vodafone Idea suffering subscriber count decline even as larger rivals Reliance Jio and Bharti Airtel added users month-on-month. In stock specific development, Roto Pumps gained after the company bagged Rs 1.8 crore order from Suez India. However, Siemens dropped as Q2 earnings miss estimates.

The BSE Sensex is currently trading at 61541.41, up by 122.45 points or 0.20% after trading in a range of 61529.77 and 61780.90. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.29%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were PSU up by 0.60%, Bankex up by 0.52%, Auto up by 0.35%, Consumer Durables up by 0.33%, Industrials up by 0.32%, while Power down by 0.08%, FMCG down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.24%, Titan Company up by 0.90%, Kotak Mahindra Bank up by 0.77%, Dr. Reddy's Lab up by 0.58% and HDFC up by 0.57%. On the flip side, ITC down by 0.46%, Ultratech Cement down by 0.39%, Asian Paints down by 0.24%, Power Grid down by 0.16% and Hindustan Unilever down by 0.13% were the top losers.

Meanwhile, expressing optimism over India’s situation, Moody's Investors Service has said the trend of gradual fiscal consolidation remains intact for India and going forward the country will see strong revenue performance and debt stablisation. Moody's Senior Vice President Christian de Guzman said India's 'Baa3' sovereign rating balances its strength of relatively high economic growth and weakness of one of the most highly indebted emerging market sovereigns. The country's healthy financial system is reflected in deleveraging by Indian corporates. He said ‘We expect that India is going to be the fastest growing G-20 economy next year... (but) high inflation pose a downside risk to India's growth as households and businesses have less purchasing power’.

Guzman said further improvement with regard to fiscal situation and a faster than expected pace of fiscal consolidation leading to substantial debt reduction would translate into a positive rating pressure on India. he also said ‘We have seen over the past couple of years that there is some revenue bouyancy ... Revenue performance has been relatively strong. We think the trend of gradual fiscal consolidation does remain intact... There is going to be a stabilisation of debt... We don't see debt creeping back significantly again’. Talking about weaker rupee would put a strain on India, Guzman said majority of India's debt is in local currency, and foreign currency debt is on near-concessional basis from multilateral or bilateral development partners and hence it is on relatively generous terms. He added ‘We don't think rupee depreciation is going to bring material deterioration in the government's ability to service foreign currency debts’.

Moody's had earlier this month cut India's growth projection for 2022 to 7 per cent, from 7.7 per cent projected earlier. It expects growth to decelerate to 4.8 per cent in 2023 and then to rise to around 6.4 per cent in 2024. The Indian economy grew 8.5 per cent in 2021. It projected GDP growth of the G-20 economies to decelerate to 1.3 per cent in 2023, significantly lower than its previous estimate of 2.1 per cent. Moody's had in October 2021 raised India's sovereign rating outlook to 'stable', from 'negative', while affirming the 'Baa3' rating -- which is the lowest investment grade, just a notch above junk status. Besides, the government has set a consolidation target under which it aims to reach a fiscal deficit level below 4.5 per cent by 2025-26.

The CNX Nifty is currently trading at 18277.40, up by 33.20 points or 0.18% after trading in a range of 18275.35 and 18325.40. There were 36 stocks advancing against 12 stocks declining, while 2 stocks remained unchanged on the index.

The top gainers on Nifty were SBI up by 1.19%, Titan Company up by 0.94%, Tata Motors up by 0.77%, Cipla up by 0.76% and Kotak Mahindra Bank up by 0.70%. On the flip side, Adani Enterprises down by 0.74%, ITC down by 0.43%, Adani Ports & SEZ down by 0.39%, Ultratech Cement down by 0.37% and Asian Paints down by 0.29% were the top losers.

Asian markets are trading mostly in green; Hang Seng surged 177.48 points or 1.02% to 17,601.89, Taiwan Weighted rose 87.53 points or 0.60% to 14,629.73, KOSPI added 14.12 points or 0.59% to 2,419.39 and Jakarta Composite was up by 42.13 points or 0.60% to 7,072.72. On the other hand, Straits Times fell 6.10 points or 0.19% to 3,253.46 and Shanghai Composite was down by 5.99 points or 0.19% to 3,082.95.