Markets trade in fine-fettle in early deals on account of value buying

Indian equity benchmarks made optimistic start on Friday tracking frim global cues. Markets are trading in fine-fettle with gains of around half a percent each in early deals on account of value buying. Foreign fund inflows also aided domestic sentiments. Provisional data from the National Stock Exchange shows foreign institutional investors (FII) purchased shares worth Rs 3,085.51 crore on June 15. Some support came in as Moody's Investors Service said India's fast-growing gross domestic product (GDP) is going to be a key driver in bringing down the debt burden and debt affordability is going to be the key determinant of the country's credit profile and fiscal strength. Market participants largely overlooked the government data showing that India's merchandise trade deficit rose to its highest level since December 2022 to $22.12 billion in May. India's exports in the month of May declined 10.3 per cent to $34.98 billion while imports fell 6.6 per cent to $57.1 billion. 

On the global front, most of the Asian markets are trading higher, following the broadly positive cues from Wall Street overnight, as traders react to the improved outlook for interest rates after the US Fed paused its interest rate hikes following ten consecutive rate hikes. They also await the Bank of Japan's rate decision later in the day. Back home, Coal industry stocks were in focus as the Ministry of Coal said the overall coal stock position at mines, thermal power plants (TPPs) and in transit, reached a total of 110.58 million tonnes (MT) as compared to the stock of 76.67 MT last year. In stock specific development, Ramkrishna Forgings traded higher on bagging order from railways ministry in consortium with Titagarh Wagons.

The BSE Sensex is currently trading at 63,207.18, up by 289.55 points or 0.46% after trading in a range of 62,957.17 and 63,215.75. There were 25 stocks advancing against 05 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.57%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Commodities up by 0.73%, Industrials up by 0.65%, Bankex up by 0.64%, Financial Services up by 0.63% and Metal up by 0.60%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were ITC up by 0.95%, Bajaj Finserve up by 0.93% SBI up by 0.90%, ICICI Bank up by 0.80% and Ultratech Cement up by 0.74%. On the flip side, TCS down by 0.73%, Wipro down by 0.58%, Bharti Airtel down by 0.15%, Power Grid down by 0.12% and Asian Paints was down by 0.07% were the top losers.

Meanwhile, expressing optimism over India’s economy, Chief Economic Advisor (CEA) V Anantha Nageswaran has said that the average capital investment in many sectors is growing at more than 20 per cent, and there are multiple indicators pointing to a momentum in the economy. Also, he exuded confidence that the finance ministry's target of narrowing the fiscal deficit to 5.9 in the current financial year and to 4.5 percent in 2025-26 would be achieved. He said that last year many sectors saw average capital investment growing at more than 20 per cent. In fact, in the hotels and hospitality sector, there was an 80 per cent growth in CAPEX in FY 23 over FY 22.

He also said ‘The total employment in the hospitality sector which was 4 crore pre-pandemic declined to 2.9 crore during the pandemic years, and now it has increased to 4.5 crore exceeding the pre-pandemic data. The hospitality sector now employs 50 lakh people more than it employed pre-pandemic’. He said the construction sector is picking up quite strongly and foreign tourist arrival is now catching up with the pre-pandemic trends. While the growth rate of industry seemed to have slowed temporarily caused by the high oil prices, the growth of the service is quite robust and agriculture growth, as one would expect, is steady between 3-4 per cent.

He said ‘The export of goods and services together is 24 per cent of the Gross Domestic Product (GDP) and imports are slightly on the higher side given that India has a net trade deficit. Our overall trade exposure is more than 50 per cent of the GDP. So, India is not a closed economy. India is an open economy.’ On the concerns of El Nino, he said the country is ''well covered'' in handling the impact of the monsoon on output and prices. He further said ‘It's good to see the Southwest Monsoon being active. By and large, the monsoon does have an important sentiment effect on the economy. But in terms of handling its impact on output and prices, we are well covered’. 

On inflation, the CEA said it has been moderate and that it would not be a challenge for households and cost of living in 2024. Expressing optimism about India's growth potential, he said GDP growth for fiscal year 2023 was 7.2 per cent with expectations that the final figure might surpass that. India was the tenth largest economy in 2014 and it is expected that the country would emerge as third largest economy in 2027. India's contribution to the global GDP has increased six-fold since the turn of the millennium. He said ‘India is set to become the third-largest contributor to the global GDP this year’, and added that digital transformation of India will also play a crucial role.

The CNX Nifty is currently trading at 18768.30, up by 80.20 points or 0.43% after trading in a range of 18710.50 and 18770.90. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.68%, Hindalco up by 1.83%, Ultratech Cement up by 1.12%, UPL up by 1.04% and JSW Steel up by 0.95%. On the flip side, Bajaj Auto down by 0.92%, TCS down by 0.70%, Hero MotoCorp down by 0.52%, Tata Consumer Products down by 0.47% and BPCL down by 0.45% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 135.15 points or 0.68% to 19,964.07, Nikkei 225 surged 33.44 points or 0.1% to 33,518.93, Straits Times rose 15.58 points or 0.48% to 3,258.43, Shanghai Composite strengthened 12.06 points or 0.37% to 3,265.04 and KOSPI was up by 10.90 points or 0.42% to 2,619.44. on the other hand, Jakarta Composite fell 29.85 points or 0.44% to 6,683.95 and Taiwan Weighted was down by 11.36 points or 0.07% to 17,323.62.