Post Session: Quick Review

The Indian equity benchmarks extended their gains for second straight day. Indices made optimistic start, as traders got encouragement after 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. Some additional support also came with commerce and industry minister Piyush Goyal’s statement that 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.

Markets cut some of their gains but managed to protect gains, as some comfort also came after 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. Traders took note of report that India has been ranked 8th on Climate Change Performance Index (CCPI, 2023) published by German Watch, New Climate Institute and Climate Action Network International based in Germany. The latest report of CCPI, released at COP 27 in November 2022, shows Denmark, Sweden, Chile and Morocco as the only four small countries that were ranked above India as 4th, 5th, 6th and 7th respectively.

Key gauges continued their firm trade in afternoon session amid reports that India is not only a bright spot amid looming uncertainty in the global economy with the forecast of a 6.1 per cent growth as compared to China's 4.4 per cent, European economies near 0.5 per cent and the US around 1 per cent next year. It is also fast emerging as one of the most important leaders of technological change, especially in the arena of digital technology and other frontier technologies. In late afternoon session, indices added more points to touch intraday high points amid investors were looking forward to the release of the Federal Reserve’s meeting minutes. However, in last leg of trade, markets gave up some gains and came off from intraday high points amid profit booking.

On the global front, European markets were trading mostly in green as investors assessed euro zone economic data and awaited the U.S. Federal Reserve’s latest meeting minutes. Asian markets ended mostly in green tracking an overnight recovery in Wall Street as markets awaited more cues on U.S. monetary policy, although rising COVID-19 cases in China kept gains limited as traders feared more disruptions. Back home, in scrip specific development, Inox Green Energy Services has debuted at Rs 60.50 on the BSE, down by 4.5 points or 6.92% from its issue price of Rs 65. 

The BSE Sensex ended at 61,510.58, up by 91.62 points or 0.15% after trading in a range of 61,442.69 and 61,780.90. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.20%, while Small cap index was up by 0.54%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 0.76%, Oil & Gas up by 0.68%, Bankex up by 0.67%, Metal up by 0.65% and Energy was up by 0.53%, while Capital Goods down by 0.28%, TECK down by 0.19%, Consumer Durables down by 0.19%, IT down by 0.08% and FMCG was down by 0.07% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Finance up by 1.43%, Dr. Reddy's Lab up by 1.31%, SBI up by 1.29%, Maruti Suzuki up by 0.90% and Kotak Mahindra Bank up by 0.85%. On the flip side, Power Grid down by 1.08%, Tech Mahindra down by 0.77%, Titan Company down by 0.56%, Bharti Airtel down by 0.54% and Bajaj Finserv down by 0.51% were the top losers. (Provisional)

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 ended at 18,267.25, up by 23.05 points or 0.13% after trading in a range of 18,246.00 and 18,325.40. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Apollo Hospital up by 3.03%, JSW Steel up by 1.74%, HDFC Life Insurance up by 1.43%, SBI up by 1.43% and Bajaj Finance up by 1.42%. On the flip side, Adani Enterprises down by 3.24%, Power Grid down by 1.22%, Adani Ports down by 1.00%, Hero MotoCorp down by 0.99% and Tech Mahindra down by 0.63% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 37.09 points or 0.5% to 7,489.93, France’s CAC was up by 1.60 points or 0.02% to 6,659.13. On the flip side, Germany’s DAX decreased 16.64 points or 0.12% to 14,405.71.

Asian markets settled mostly higher on Wednesday tracking overnight rally in US stocks ahead the release of the November Fed meeting minutes later in the day. Chinese shares rose even as Covid cases in mainland China surged toward record highs. Hong Kong shares gained even after Warren Buffet's investment Company Berkshire Hathaway further trimmed its stake in the electric vehicle maker BYD for HK$630.33 million ($80.67 million). Meanwhile, trading volumes were somewhat thin amid a national holiday in Japan. However, some gains were capped by lingering worries about the Chinese economy and a record interest rate hike in New Zealand.