Domestic indices trade firm in early deals

Domestic equity indices extended their previous session’s gains with optimistic start on Tuesday after a long weekend holiday tracking some gains in Asian counterparts and positive economic data from domestic front. Markets are trading firm in early deals with gains of over half a percent each as value buying in all most all the sectoral indices aided the sentiments. Traders took encouragement as manufacturing activities in India accelerated further and touched a four-month high in April, boosted by robust new business growth and improving supply-chain conditions. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) increased from 56.4 in March to 57.2 in April. More optimism came in as GST collection grew by 12 per cent in April to Rs 1.87 lakh crore, the highest monthly mop-up since the rollout of the indirect tax regime. 

Besides, the International Monetary Fund (IMF) projected that India would be the fastest-growing economy in the world, despite confronting considerable challenges such as financial sector turmoil, inflationary pressures, effects of the Russia-Ukraine war, and the persistent impact of the Covid-19 pandemic over the past three years. Meanwhile, Foreign institutional investors (FII) bought shares worth Rs 3,304.32 crore on April 28, according to provisional data from National Stock Exchange.

On the global front, Asian markets recovered from initial losses and are trading mostly higher following the takeover of fallen US lender First Republic Bank by JP Morgan Chase. China remains closed for Labor Day holiday. Back home, the output of India's eight core sectors grew by 3.6 percent in March 2023, the slowest in the last five months. investors are eyeing Q4 earnings from many companies including Ambuja Cement, Tata Steel and Uco Bank. On the sectoral front, auto stocks are trading in red reacting to their monthly sales numbers. In stock specific development, ONGC and Oil India rose after the government slashed windfall tax on petroleum crude.

The BSE Sensex is currently trading at 61432.45, up by 320.01 points or 0.52% after trading in a range of 61255.00 and 61478.38. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.87%, while Small cap index was up by 0.90%.

The gaining sectoral indices on the BSE were Power up by 1.75%, Utilities up by 1.74%, Capital Goods up by 1.30%, Oil & Gas up by 1.20%, Industrials up by 1.20%, while Auto down by 0.17% was the sole losing index on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.80%, Larsen & Toubro up by 1.79%, Axis Bank up by 1.51%, Nestle up by 1.30% and Power Grid up by 1.29%. On the flip side, Tata Motors down by 1.56%, Kotak Mahindra Bank down by 0.61%, Ultratech Cement down by 0.51%, Mahindra & Mahindra down by 0.46% and Sun Pharma down by 0.12% were the top losers.

Meanwhile, NITI Aayog member Arvind Virmani has said the Indian economy is likely to grow at around 6.5 per cent in the current fiscal (FY24), in spite of high oil prices and increased geopolitical tensions. He further said that he does not see any impact of the US and European banking crisis on the Indian financial sector. He said ‘So in the current fiscal year because of all the changes which have happened in the last year, I have reduced my India’s economic growth forecast by 0.5 per cent. So it is 6.5 per cent, again plus minus 0.5 per cent’.

Regarding Reserve Bank of India’s flexible inflation targeting, Virmani said ‘we should be more like the US Federal Reserve, which has an inflation target but also takes account of GDP’. The government has mandated the central bank to ensure that retail inflation based on the consumer price index (CPI) remains at 4 per cent with a margin of 2 per cent on either side.

Talking about India can replicate the economic success that has made China central to the world economy and global power, he said that he does not think any other country now will be allowed to follow unfair trade policies which China had followed. He said ‘and my estimate is that roughly 1/3 of China’s growth would not have happened, if it did not have these unfair trade policies’. He pointed out that India doesn’t follow an asymmetric policy and it can grow at 6.5-7 per cent without following unfair trade policies.

The CNX Nifty is currently trading at 18161.35, up by 96.35 points or 0.53% after trading in a range of 18101.75 and 18170.65. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.22%, ONGC up by 2.14%, Larsen & Toubro up by 2.14%, Tech Mahindra up by 1.84% and Adani Enterprises up by 1.50%. On the flip side, Hero MotoCorp down by 2.12%, Tata Motors down by 1.75%, Kotak Mahindra Bank down by 0.74%, Mahindra & Mahindra down by 0.63% and Ultratech Cement down by 0.53% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 78.46 points or 0.27% to 29,201.64, Taiwan Weighted added 35.64 points or 0.23% to 15,614.82, Hang Seng advanced 23.77 points or 0.12% to 19,918.34, KOSPI increased 15.52 points or 0.62% to 2,517.05 and Straits Times rose 11.78 points or 0.36% to 3,282.29, while Jakarta Composite was down by 76.19 points or 1.11% to 6,839.53.