Markets trade higher with marginal gains in early deals

Indian equity benchmarks made positive start, near their record highs, on Monday despite muted global cues. Markets are trading higher with marginal gains on account of value buying in counters such as Industrials, Consumer Durables, Healthcare, Metal and Capital Goods. Sentiments got a boost as foreign portfolio investors (FPIs) continued to invest in Indian equities for a fourth straight month as they injected Rs 16,405 crore in June so far on the country’s strong economic rebound and positive growth outlook. Some support also came in as the Finance Ministry said net direct tax collection till June 17 this fiscal rose by 11.18 per cent to Rs 3.80 lakh crore on higher advance tax mop up. Broader indices are outperforming larger peers with gains of over half a percent. Though, upside remained capped as some cautiousness crept in with the Reserve Bank of India’s statement that India’s forex reserves dropped by $1.318 billion to $593.749 billion for the week ended June 9. 

On the global front, all the Asian markets are trading lower following the broadly negative cues from Wall Street on Friday, as some traders looked to cash in and book profits after the recent strength in the markets. The weakness in major currencies in the region against the US dollar also hurt market sentiment. Back home, in stock specific developments, Tata Steel rose on reports it is planning a consolidated capital expenditure of Rs 16,000 crore. Natco Pharma gained on receiving approval from the U.S. health regulator for its abbreviated new drug application (ANDA) for Tipiracil Hydrochloride and Trifluridine Tablets (generic for Lonsurf).

The BSE Sensex is currently trading at 63445.27, up by 60.69 points or 0.10% after trading in a range of 63429.66 and 63574.69. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.61%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Industrials up by 0.75%, Consumer Durables up by 0.71%, Healthcare up by 0.67%, Metal up by 0.67% and Capital Goods up by 0.59%, while Telecom down by 0.42%, Energy down by 0.10%, Oil & Gas down by 0.07%, Bankex down by 0.07% and FMCG down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.76%, Titan Company up by 1.95%, Bajaj Finance up by 1.34%, Sun Pharma up by 0.88% and Larsen & Toubro up by 0.78%. On the flip side, Hindustan Unilever down by 0.72%, ICICI Bank down by 0.63%, NTPC down by 0.58%, Reliance Industries down by 0.43% and Indusind Bank down by 0.38% were the top losers.

Meanwhile, highlighting the government's assessment of the economy, India has made a strong pitch for a sovereign rating upgrade with Moody's. Ahead of its annual review of the sovereign rating, Moody's Investors Service representatives met Indian government officials. Moody's Investors Service has a 'Baa3' sovereign credit rating on India, with a stable outlook. 'Baa3' is the lowest investment grade rating. A higher rating for India would mean the nation is less risky, translating into lower interest rates on borrowings.

Moody's Investors Service representatives acknowledged the positives of the Indian economy, and said that they are hopeful for a rating upgrade from Moody's. Moody's representatives discussed the government's disinvestment roadmap and officials highlighted that disinvestment should be seen from the prism of reform and not just revenue generation exercise. The government officials highlighted India's ongoing economic reforms, government thrust on infrastructure development and forex reserves nearing $600 billion. India has long been questioning the methodology adopted by international agencies while according credit rating and has nudged them to become more transparent and less subjective. It has been pitching for amendment in sovereign credit ratings methodology saying it should reflect economies' ability and willingness to pay their debt obligations.

In June 2020, Moody's downgraded India's rating to 'Baa3' from 'Baa2' with a negative outlook, citing a weak reform push and slow growth. In October 2021, the outlook on the rating was revised to stable. The government had largely met its fiscal objectives over the past two years. The fiscal deficit, which is the difference between government expenditure and revenue, narrowed to 6.4 per cent of GDP in 2022-23 fiscal, from 6.7 per cent of GDP in the 2021-22 fiscal. In the current fiscal, the deficit is budgeted at 5.9 per cent of GDP. As per the fiscal consolidation roadmap, the government intends to bring down the fiscal deficit below 4.5 per cent of GDP by 2025-26.

The CNX Nifty is currently trading at 18843.90, up by 17.90 points or 0.10% after trading in a range of 18833.75 and 18881.45. There were 32 stocks advancing against 17 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.71%, Titan Company up by 1.92%, Bajaj Finance up by 1.30%, Sun Pharma up by 0.83% and Hindalco up by 0.81%. On the flip side, Hero MotoCorp down by 1.37%, Adani Enterprises down by 0.82%, Hindustan Unilever down by 0.75%, NTPC down by 0.66% and HDFC Life Insurance down by 0.62% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 422.14 points or 1.27% to 33,283.94, Hang Seng declined 314.22 points or 1.59% to 19,726.15, KOSPI dropped 23.45 points or 0.9% to 2,602.34, Straits Times fell 19.77 points or 0.61% to 3,240.26, Shanghai Composite weakened 17.64 points or 0.54% to 3,255.69, Jakarta Composite plunged 15.35 points or 0.23% to 6,683.20 and Taiwan Weighted was down by 1.23 points or 0.01% to 17,287.68.