Bargain hunting drives markets higher on Wednesday

Indian equity benchmarks made positive start on Wednesday as investors reacted to mixed domestic economic data. Bottom hunters gathered on Dalal Street after continued selling in the previous eight sessions. Markets are trading firm in early deals with gains of over 0.60% each. Traders took encouragement as Chief Economic Advisor V Anantha Nageswaran said high frequency data indicate buoyant economic growth momentum and the 7% GDP growth estimate for the current fiscal is very realistic. Some support also came as production of eight infrastructure industries - the core sector - expanded 7.8% year-on-year (YoY) in January, its fastest pace in four months, owing to a lower base and a near all-round showing. Though, gains remained capped as India's gross domestic product (GDP) growth rate fell for the second consecutive quarter in October-December, coming in at 4.4%, it is lower than the 6.3% growth in the second quarter of 2022-23. Meanwhile, Rupee opened higher at 82.48 from its previous close at 82.58 vs the US dollar amid steadiness in value of greenback against a basket of six peers.

On the global front, Asian markets are trading higher, despite the broadly negative cues from Wall Street overnight, as data showing China's manufacturing activity in February expanded at the fastest pace in more than a decade cheered investors, offsetting fears over rising interest rates. Market in South Korea is closed for Independence Day holiday. Back home, auto stocks are in limelight reacting to their monthly sales numbers. In stock specific development, Ambuja Cements is trading higher on bagging a coal mine in Maharashtra.

The BSE Sensex is currently trading at 59320.77, up by 358.65 points or 0.61% after trading in a range of 59109.54 and 59370.67. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.82%, while Small cap index was up by 0.91%.

The top gaining sectoral indices on the BSE were Metal up by 1.99%, Capital Goods up by 1.02%, Industrials up by 1.01%, Auto up by 0.89%, Utilities up by 0.84%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.35%, Tata Steel up by 1.97%, Axis Bank up by 1.94%, Bajaj Finserv up by 1.42% and TCS up by 1.38%. On the flip side, Power Grid down by 1.28% and Hindustan Unilever down by 0.11% were the only losers.

Meanwhile, Chief Economic Advisor V Anantha Nageswaran has said high frequency data indicate buoyant economic growth momentum and the 7 per cent GDP growth estimate for the current fiscal is very realistic. He also said that there are enough signs that manufacturing is in good health. According to him, the GDP growth forecast of 6.5 per cent for the next fiscal is well within the range of forecast by other agencies like OECD and ADB but there are downside risks.

He stated ‘Inflation is softening and the pass through from wholesale prices has run its course… we do have some uncertainty related to monsoon because of El Nino activity… we need to be ready with both supply side and monetary policy measures in the course of the next financial year.’ Further, he said ‘We need to be prepared for tighter financial conditions globally, weather-related uncertainties and geopolitical factors. 2023-24 may not see a big ticker shock as we saw in early months of 2022-23 as the war broke out in 2022 but nonetheless some of the underlying factors are still simmering and we need to be watchful.’

Besides, he said sales of passenger vehicles, two-wheelers and tractors are on an uptrend and real estate sector too is bouncing back strongly. Unemployment rate is coming down and jobs are being created at lower salary level. Moreover, he added said all these indicators point towards broad-based growth momentum in the economy.

The CNX Nifty is currently trading at 17418.40, up by 114.45 points or 0.66% after trading in a range of 17345.25 and 17421.95. There were 40 stocks advancing against 9 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Adani Enterprises up by 6.73%, Hindalco up by 2.89%, Mahindra & Mahindra up by 2.54%, Adani Ports & SEZ up by 1.97% and Axis Bank up by 1.92%. On the flip side, Britannia Industries down by 1.71%, Power Grid down by 1.42%, Tata Consumer Products down by 0.46%, SBI Life Insurance down by 0.36% and Hindustan Unilever down by 0.19% were the top losers.

All Asian markets are trading higher; Hang Seng jumped 657.09 points or 3.32% to 20,443.03, Taiwan Weighted surged 77.09 points or 0.5% to 15,580.88, Nikkei 225 rose 46.09 points or 0.17% to 27,491.65, Shanghai Composite strengthened 29.45 points or 0.89% to 3,309.06, Jakarta Composite gained 12.04 points or 0.18% to 6,855.28 and Straits Times was up by 3.2 points or 0.1% to 3,265.83.