Benchmarks continue to trade higher in morning deals

Indian equity benchmarks continued to trade higher in morning deals, led by gains in Power, Utilities and FMCG stocks. Sentiments remained up-beat with a private report that nearly six in 10 corporate heads in India (57 per cent) are optimistic about the country’s growth prospects in 2023 in the face of a global slowdown, as well as inflationary and geopolitical concerns. Some support also came with report that the ongoing negotiations of India for the proposed comprehensive free trade agreements with the UK and European Union (EU) are on track and the next round of talks with both the regions will happen soon. Meanwhile, the World Economic Forum in its Chief Economists Outlook survey said that a global recession is likely in 2023, but pressures on food, energy and inflation may be peaking. It added at the same time, some economies in the South Asia region, including Bangladesh and India, may bene?t from global trends such as a diversi?cation of manufacturing supply chains away from China.

On the global front, Asian markets are trading mostly in red as China’s GDP expanded at its slowest pace since the mid-1970s bar the Covid-hit 2020 year, as the world’s second-largest economy struggled under tight pandemic restrictions that were abruptly ditched late in 2022. Back home, insurance industry’s stocks remained in watch with report that the Insurance Regulatory and Development Authority of India has said insurers will be allowed to classify their sovereign green bond purchases as infrastructure investments.

The BSE Sensex is currently trading at 60533.46, up by 440.49 points or 0.73% after trading in a range of 60072.34 and 60578.70. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Power up by 1.48%, Utilities up by 1.47%, FMCG up by 1.19%, Capital Goods up by 1.16% and Industrials up by 0.72%, while Healthcare down by 0.20%, Metal down by 0.16% and Telecom down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.60%, Larsen & Toubro up by 2.22%, HCL Technologies up by 1.59%, Tata Motors up by 1.40% and HDFC up by 1.30%. On the flip side, Indusind Bank down by 0.98%, Bajaj Finance down by 0.69%, Sun Pharma down by 0.65%, Tata Steel down by 0.58% and ICICI Bank down by 0.24% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its report 'State Finances: A Study of Budgets of 2022-23' has said states’ gross fiscal deficit (GFD) is budgeted to decline from 4.1 per cent of gross domestic product (GDP) in Covid-hit 2020-21 to 3.4 per cent of GDP in 2022-23 showing improvement in their fiscal health. It also advised States to continue to focus on creating a congenial ecosystem for greater private investments. It stated the fiscal health of the states has improved from a sharp pandemic-induced deterioration in 2020-21 on the back of a broad-based economic recovery and resulting high revenue collections. In 2022-23 States have budgeted higher capital outlay than in 2019-20, 2020-21 and 2021-22.

It mentioned ‘Going forward, increased allocations for sectors like health, education, infrastructure and green energy transition can help expand productive capacities if States mainstream capital planning rather than treating them as residuals and first stops for cutbacks in order to meet budgetary targets.’ Moreover, report said said it is worthwhile to consider creating a capex buffer fund during good times when revenue flows are strong so as to smoothen and maintain expenditure quality and flows through the economic cycle.

Further, it said to crowd in private investment, the State governments may continue to focus on creating a congenial ecosystem for the private sector to thrive. States also need to encourage and facilitate higher inter-state trade and businesses to realise the full benefit of spillover effects of State capex across the country. Besides, it said that as a part of institutional reforms, State governments need to set up Finance Commissions (SFC) in a regular and timely manner to decide on the assignment of taxes, fees and other revenues to local governments.

The CNX Nifty is currently trading at 18020.85, up by 126.00 points or 0.70% after trading in a range of 17886.95 and 18029.95. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.65%, Larsen & Toubro up by 2.33%, HCL Tech. up by 1.70%, HDFC up by 1.40% and Tata Motors up by 1.39%. On the flip side, Indusind Bank down by 0.91%, Bajaj Finance down by 0.68%, Sun Pharma down by 0.61%, Tata Steel down by 0.58% and Hero MotoCorp down by 0.49% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 219.33 points or 1.02% to 21,527.39, Shanghai Composite weakened 7.91 points or 0.25% to 3,219.68, KOSPI dropped 18.56 points or 0.77% to 2,381.30 and Straits Times fell 3.22 points or 0.1% to 3,280.38.

On the flip side, Nikkei 225 surged 330.48 points or 1.28% to 26,152.80, Taiwan Weighted added 4.53 points or 0.03% to 14,931.54 and Jakarta Composite gained 85.38 points or 1.26% to 6,773.44.