Markets trade higher with modest gains in early deals

Indian equity benchmarks made slightly positive start on Tuesday amid mixed cues from global markets, as traders remain cautious and reluctant to make significant moves ahead of the release of reports on US consumer and producer price inflation, which are due in the next two days, and could have a significant impact on the outlook for interest rates. Domestic indices soon added some strength and are trading higher with around 0.30% gains in early deals as buying in Metal, Capital Goods and Telecom counters aided the markets. Sentiments got some support as Fitch Ratings affirmed India's sovereign rating with a stable outlook saying the country has a robust growth outlook and resilient external finances. Also, foreign fund inflows aided sentiments. Foreign institutional investors (FII) bought shares worth Rs 2,123.76 crore on May 8, provisional data from the National Stock Exchange showed. 

Besides, traders’ body CAIT made a case for lowering the GST rate on beverages from 28 per cent, which comes to 40 per cent after inclusion of cess, arguing that it blocks the working capital of small retailers. In stock specific development, Kansai Nerolac Paints surged on reporting a five-fold jump in Q4 profit to Rs 96 crore. The company's board also approved a bonus issue of 1:2.

The BSE Sensex is currently trading at 61940.54, up by 176.29 points or 0.29% after trading in a range of 61808.50 and 61946.71. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.41%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Metal up by 0.81%, Capital Goods up by 0.69%, Telecom up by 0.62%, Industrials up by 0.62% and Auto up by 0.61%, while PSU down by 0.16% was the sole losing index on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.80%, Indusind Bank up by 1.37%, Titan Company up by 1.29%, Tata Steel up by 1.19% and Larsen & Toubro up by 1.16%. On the flip side, HCL Technologies down by 0.79%, Sun Pharma down by 0.67%, Nestle down by 0.35%, Infosys down by 0.28% and Tech Mahindra down by 0.28% were the top losers.

Meanwhile, Fitch Ratings has affirmed India's sovereign rating with a stable outlook and said that the country has a robust growth outlook and resilient external finances. It has affirmed the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook and added that strong growth potential is a key supporting factor for the sovereign rating.

It also said ‘India's rating reflects strengths from a robust growth outlook compared with peers and resilient external finances, which have supported India in navigating the large external shocks over the past year’. However, it said these are offset by India's weak public finances, illustrated by high deficits and debt relative to peers, as well as lagging structural indicators, including World Bank governance indicators and GDP per capita. The agency has kept India's credit rating unchanged at 'BBB-' -- the lowest investment grade rating -- since August 2006.

The rating agency forecast India to be one of the fastest-growing rated sovereigns globally at 6 per cent in the current fiscal year ending March 2024 supported by resilient investment prospects. It further said ‘Still, headwinds from elevated inflation, high interest rates and subdued global demand, along with fading pandemic-induced pent-up demand, will slow growth from our FY23 estimate of 7 per cent before rebounding to 6.7 per cent by FY25’.

The CNX Nifty is currently trading at 18314.05, up by 49.65 points or 0.27% after trading in a range of 18276.90 and 18318.75. There were 34 stocks advancing against 14 stocks declining, while 2 stocks remained unchanged on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.09%, Tata Motors up by 1.96%, Coal India up by 1.44%, Adani Enterprises up by 1.41% and Tata Steel up by 1.10%. On the flip side, UPL down by 2.01%, Sun Pharma down by 0.89%, SBI down by 0.87%, Hindustan Unilever down by 0.41% and HCL Technologies down by 0.39% were the top losers.

Asian markets are trading mixed; Hang Seng declined 109.07 points or 0.54% to 20,187.96, Straits Times fell 8.46 points or 0.26% to 3,249.20, KOSPI dropped 6.40 points or 0.25% to 2,506.81 and Taiwan Weighted lost 0.81 points or 0.01% to 15,698.76. On the other hand, Nikkei 225 surged 272.89 points or 0.94% to 29,222.77, Shanghai Composite strengthened 13.14 points or 0.39% to 3,408.14 and Jakarta Composite was up by 3.1 points or 0.05% to 6,772.73.