Markets hit record highs in early deals

Indian equity benchmarks made cautious start on Tuesday amid weakness on Wall Street overnight, but indices managed to recover tacking support with mostly positive cues from Asian counterparts. Markets are trading higher with notable gains of around 0.30% each in early deals. Sensex and Nifty hit record highs. Foreign fund inflows aided the domestic sentiments. Foreign institutional investors (FIIs) have net bought shares worth Rs 935.88 crore on November 28, as per provisional data available on the NSE. Some support also came in as the RBI released quarterly statistics on deposits and credit highlighting bank credit growth to 17.2 per cent on an annual basis in September from 14.2 per cent a quarter ago. Traders took note of report that senior officials of India and the European Union (EU) on November 28 commenced the third round of talks on a proposed free trade agreement, which aims at boosting trade and investments between the two regions. Though, upside remained capped as SBI Research said India's economic growth for the July to September quarter may slow to 5.8 per cent, 30 basis points lower than average estimates, dragged down by weak manufacturing sector and steep corporate margin compression.

Most of the Asian markets are trading higher, despite the broadly negative cues from global markets overnight, boosted by Chinese property companies after the securities regulator in China lifted the ban on equity refinancing for listed property firms. Meanwhile, the supply chain concerns remain amid growing unrest in China due to widespread protests against the government's zero-Covid policy that led to lockdowns in several major cities. Back home, auto stocks were in focus as credit rating agency Icra said passenger vehicle makers are expected to spend Rs 65,000 crore between FY23 and FY25, as companies ramp up outlay towards capacity expansion and new product development. In stock specific development, NBCC gained on winning new work orders worth Rs 271.62 crore in projects of erstwhile realty firm Amrapali Group.

The BSE Sensex is currently trading at 62683.79, up by 178.99 points or 0.29% after trading in a range of 62362.08 and 62724.02. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.12%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Metal up by 0.91%, FMCG up by 0.86%, Utilities up by 0.76%, Healthcare up by 0.75%, Consumer Durables up by 0.67%, while Auto down by 0.32%, Telecom down by 0.28%, Capital Goods down by 0.28%, Realty down by 0.22%, Energy down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.90%, Tata Steel up by 1.76%, Dr. Reddy's Lab up by 1.56%, Titan Company up by 1.36% and ICICI Bank up by 1.11%. On the flip side, Maruti Suzuki down by 0.78%, Bajaj Finserv down by 0.73%, Power Grid down by 0.61%, Asian Paints down by 0.53% and Larsen & Toubro down by 0.44% were the top losers.

Meanwhile, ahead of the government’s official gross domestic product (GDP) number release on November 30, SBI Research in its latest report has expressed cautiousness over India’s economic situation and pencilled the country's GDP growth for the second quarter (Q2) at 5.8 per cent, down 30 basis points from average estimates citing a weak manufacturing sector coupled with the steep margin compression.

In a report, SBI Research headed by Soumya Kanti Ghosh said corporate results, operating profit of companies, excluding banking and financial sector, degrew by 14 per cent in Q2FY23 as against 35 per cent growth in Q2FY22, though the top line continued to grow at a healthier pace. Net sales grew by 28 per cent, while bottom line was down by around 23 per cent from the year ago period. Further, corporate margin seems to be under pressure, as reflected in results of around 3,000 listed entities, excluding banking and financial sector, due to higher input costs with declining operating margins, from 17.7 per cent in Q1FY22 to 10.9 per cent in Q2FY23.

Given this and the wide divergence in market consensus (6.1 per cent) regarding Q2 GDP numbers, SBI sees the economy printing in at 5.8 per cent, Ghosh said citing the lag of two months in the quarterly GDP data. It also pegs the full year growth at 6.8 per cent, 20 basis points lower than the RBI estimate. The SBI forecast, based on its composite leading index which is a basket of 41 leading indicators based on monthly data, shows declining economic activity between June and September but increased economic activity in October making Q3 growth more optimistic.

The CNX Nifty is currently trading at 18621.70, up by 58.95 points or 0.32% after trading in a range of 18552.15 and 18631.65. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.00%, Tata Steel up by 1.95%, Apollo Hospital up by 1.84%, Hindalco up by 1.81% and Cipla up by 1.74%. On the flip side, Tata Motors down by 0.68%, BPCL down by 0.65%, Bajaj Finserv down by 0.61%, Power Grid down by 0.56% and Maruti Suzuki down by 0.49% were the top losers.

Asian markets are trading mostly in green; Straits Times advanced 28.63 points or 0.88% to 3,268.69, Hang Seng surged 656.63 points or 3.80% to 17,954.57, Taiwan Weighted rose 88.04 points or 0.60% to 14,644.91, KOSPI added 15.19 points or 0.63% to 2,423.46 and Shanghai Composite was up by 67.96 points or 2.21% to 3,146.51. On the other hand, Nikkei 225 fell 152.09 points or 0.54% to 28,010.74 and Jakarta Composite was down by 9.26 points or 0.13% to 7,008.10.