Domestic indices trade firm in early deals

Indian equity benchmarks made optimistic start on Wednesday tracking overnight gains on Wall Street and expectations of a rate pause by the Reserve Bank of India's Monetary Policy Committee tomorrow. Domestic indices are trading firm in early deals with decent gains as investors continue to hunt for beaten down but fundamentally strong stocks. Foreign fund inflows aided domestic sentiments. Foreign institutional investors (FIIs) bought shares worth Rs 385.71 crore on June 6, provisional data from the National Stock Exchange shows. Though, upside remained capped as some cautiousness came in after the World Bank said growth in India is expected to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January. Meanwhile, the Indian rupee opened higher against the US dollar Wednesday led by a broader weakness in the greenback.

On the global front, Asian markets are trading mixed as China’s May trade data disappoints. China’s trade data missed market expectations as exports declined 7.5% year-on-year, sharply lower than the 0.4% fall expected, while imports fell slightly lower by 4.5% year-on-year, compared to an 8% fall that was forecast. Back home, the BSE has announced revision in circuit limit for total 477 stocks on June 6, including Adani Transmission, Adani Green Energy, Adani Wilmar and Adani Power. In stock specific development, Torrent Power soared after the company signed an MoU with the Government of Maharashtra to develop three pumped storage hydro projects of 5,700 MW capacity.

The BSE Sensex is currently trading at 62924.86, up by 131.98 points or 0.21% after trading in a range of 62883.54 and 63027.98. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 0.62%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Utilities up by 1.12%, Capital Goods up by 0.94%, Power up by 0.89%, Industrials up by 0.81% and Telecom up by 0.79%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Nestle up by 1.60%, Power Grid up by 1.34%, Larsen & Toubro up by 1.01%, Axis Bank up by 0.87% and Infosys up by 0.70%. On the flip side, HCL Technologies down by 0.82%, Tata Motors down by 0.44%, Mahindra & Mahindra down by 0.44%, Bajaj Finance down by 0.33% and Kotak Mahindra Bank down by 0.28% were the top losers.

Meanwhile, the World Bank in its latest edition of Global Economic Prospects has said that India’s growth is likely to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January. This slowdown is attributed to private consumption being constrained by high inflation and rising borrowing costs, while government consumption is impacted by fiscal consolidation. Though, it also said India will remain the fastest-growing economy (in terms of both aggregate and per capita GDP) of the largest EMDEs (Emerging market and developing economies). 

Beside, global growth is projected to decelerate from 3.1 per cent in 2022 to 2.1 per cent in 2023. In Emerging Markets and Developing Economies (EMDEs) other than China, growth is set to slow to 2.9 per cent this year from 4.1 per cent last year. These forecasts reflect broad-based downgrades. Ajay Banga, the newly-appointed World Bank Group President said ‘the surest way to reduce poverty and spread prosperity is through employment - and slower growth makes job creation a lot harder’. He said ‘it’s important to keep in mind that growth forecasts are not destiny. We have an opportunity to turn the tide but it will take us all working together’. 

It said ‘growth is projected to pick up slightly through FY 2025/26 as inflation moves back toward the midpoint of the tolerance range and reforms payoff. India will remain the fastest-growing economy (in terms of both aggregate and per capita GDP) of the largest EMDEs’. In India, which accounts for three-quarters of output in South Asia, growth in early 2023 remained below what it achieved in the decade before the pandemic as higher prices and rising borrowing costs weighed on private consumption.

However, it said manufacturing rebounded into 2023 after contracting in the second half of 2022, and investment growth remained buoyant as the government ramped up capital expenditure. Private investment was also likely boosted by increasing corporate profits. Unemployment, it said, declined to 6.8 per cent in the first quarter of 2023, the lowest since the onset of the COVID-19 pandemic, and labour force participation increased. It added India’s headline consumer price inflation has returned to within the central bank’s 2-6 per cent tolerance band.

The CNX Nifty is currently trading at 18660.80, up by 61.80 points or 0.33% after trading in a range of 18636.00 and 18676.05. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 3.06%, HDFC Life Insurance up by 2.05%, Nestle up by 1.73%, Apollo Hospital up by 1.67% and Tata Consumer Products up by 1.65%. On the flip side, HCL Technologies down by 0.74%, Tata Motors down by 0.47%, Grasim Industries down by 0.46%, Bajaj Finance down by 0.36% and Mahindra & Mahindra down by 0.34% were the top losers.

Asian markets are trading mixed; Hang Seng surged 178.59 points or 0.93% to 19,277.87, Taiwan Weighted advanced 122.36 points or 0.72% to 16,884.02, KOSPI rose 7.32 points or 0.28% to 2,622.73 and Shanghai Composite was up by 0.54 points or 0.02% to 3,195.88. On the other hand, Nikkei 225 slipped 223.11 points or 0.69% to 32,283.67, Jakarta Composite fell 27.61 points or 0.42% to 6,591.31 and Straits Times was down by 11.93 points or 0.38% to 3,178.18.