Benchmarks trade flat with positive bias ahead of retail inflation, IIP data

Indian equity benchmarks started the new week on positive note tracking Friday’s overnight gains on Wall Street. Now, domestic indices are trading flat with marginal gains in early deals as investors await the retail inflation print for May and April's Index of Industrial Production (IIP) data, slated to be released later in the day. There are expectations that May consumer price inflation to have cooled down as rise in food prices continued to slow. Some support came in as Chief Economic Adviser V Anantha Nageswaran said that the government is on the same page with the Reserve Bank of India on the GDP growth forecast for the current financial year which is 6.5 per cent. Also, Country’s largest commercial lender State Bank of India (SBI) revised GDP growth marginally upwards from 6.4 per cent to 6.5 per cent for the current financial year. However, gains remained capped amid foreign fund outflows. Foreign institutional investors (FII) net sold shares worth net Rs 308.97 crore on June 9, according to the provisional data available on the NSE.

On the global front, Asian markets are trading mixed, following the broadly positive cues from Wall Street on Friday, as traders are cautiously optimistic ahead of the monetary policy meetings of the US Fed, the European Central Bank and the Bank of Japan later in the week. A surge in initial jobless claims in the U.S. has bolstered hopes that the Fed will pause its rate hikes. Besides, the Bank of Japan said producer prices in Japan were down 0.7 percent on month in May. Back home, in stock specific development, Cochin Shipyard traded higher as the company secured a contract worth Rs 300 crore from Indian Navy for the MR/Mid Life Upgrade of an Indian naval ship.

The BSE Sensex is currently trading at 62675.56, up by 49.93 points or 0.08% after trading in a range of 62615.20 and 62783.65. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Realty up by 1.40%, IT up by 0.98%, TECK up by 0.92%, Telecom up by 0.56% and Metal up by 0.51%, while Consumer Durables down by 0.29%, Capital Goods down by 0.15%, FMCG down by 0.11% and Bankex down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.48%, HCL Technologies up by 1.23%, Bajaj Finance up by 0.83%, Tata Steel up by 0.69% and TCS up by 0.69%. On the flip side, Titan Company down by 1.04%, Larsen & Toubro down by 1.02%, Reliance Industries down by 0.50%, Axis Bank down by 0.43% and Ultratech Cement down by 0.38% were the top losers.

Meanwhile, expressing views on India’s economic condition, Moody’s Investors Service has said that the Indian economy is likely to clock a 6-6.3 per cent growth in June quarter, and flagged risks of fiscal slippage arising from weaker-than-expected government revenues in the current fiscal. Moody’s Associate Managing Director Gene Fang said India has a relatively high level of general government debt at around 81.8 per cent of GDP for 2022-23, and low debt affordability. He said India has a high growth potential and its credit strengths include a stable domestic financing base for government debt, as well as a sound external position.

He noted that ‘we expect India’s growth to come in around 6-6.3 per cent in the first quarter of the current fiscal year, which remains relatively flat from the 6.1 per cent recorded in the final quarter of fiscal 2022-23’. He added while household demand is likely to see an improvement given the moderation in both headline and core inflation readings, lagged effects of higher interest rates pose some risks on gross fixed capital formation, in particular. Gross Fixed Capital Formation (GFCF) is an indicator of investment in the economy.

Fang said as a ‘Baa3’ rated sovereign, India’s strengths lie in its large and diversified economy with a high growth potential, which is evident in the relatively strong growth forecast this year despite the weaker global economic outlook. He said the government has largely met its fiscal objectives over the past two years, assuaging concerns on fiscal policy. On a calendar year basis, Moody’s expects growth to be 5.5 per cent in 2023, which could improve to 6.5 per cent in 2024. In its monetary policy last week, the Reserve Bank of India (RBI) projected India’s GDP to expand by 6.5 per cent in the current fiscal, on the back of supportive domestic demand conditions.

The CNX Nifty is currently trading at 18584.45, up by 21.05 points or 0.11% after trading in a range of 18559.75 and 18633.60. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.48%, BPCL up by 1.32%, HCL Technologies up by 1.27%, Apollo Hospital up by 1.13% and HDFC Life Insurance up by 0.99%. On the flip side, Titan Company down by 1.31%, Larsen & Toubro down by 1.06%, Divi's Lab down by 0.98%, ONGC down by 0.62% and Reliance Industries down by 0.49% were the top losers.

Asian markets are trading mixed; Hang Seng declined 108.14 points or 0.56% to 19,281.81, KOSPI dropped 12.27 points or 0.46% to 2,628.89, Shanghai Composite weakened 9.06 points or 0.28% to 3,222.35 and Jakarta Composite plunged 6.78 points or 0.1% to 6,687.24. On the other hand, Taiwan Weighted rose 94.72 points or 0.56% to 16,981.12, Nikkei 225 surged 78.01 points or 0.24% to 32,343.18 and Straits Times was up by 1.96 points or 0.06% to 3,188.93.