Markets trade firm in early deals

Indian equity benchmarks made positive start on Wednesday tracking overnight gains on Wall Street and ahead of the US Fed's rate decision later tonight. Markets soon gained momentum and are trading firm with gains of around half a percent each in early deals. Buying in all the sector indices led by Capital Goods, Industrials and Utilities, aided the local bourses. Some support came in with foreign fund inflows. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) bought shares worth Rs 1,088.76 crore on July 25. Adding more optimism, the International Monetary Fund (IMF) raised the FY24 economic growth forecast for India by 20 basis points to 6.1 per cent, citing the country’s stronger-than-expected growth momentum in the March quarter of FY23. 

On the global front, Asian markets are trading mixed as traders remain cautious ahead of the US Fed's interest rate decision later in the day, where it is widely expected to raise interest rates by another 25 basis points. They are hopeful the rate hike will be the last following recent encouraging inflation data. Besides, the European Central Bank and the Bank of Japan are scheduled to make their monetary policy announcements on Thursday and Friday, respectively. Meanwhile, the Bank of Japan said producer prices in Japan were up 1.2 percent on year in June.

Back home, pharma stocks are buzzing as credit rating agency ICRA projected steady growth for the Indian pharmaceutical industry, despite headwinds and regulatory challenges. In stock specific developments, Larsen & Toubro (L&T) rallied to hit a new high on strong June quarter results and board's approval of Rs 10,000 crore share buyback. Tata Motors DVR soared on board's proposal to convert DVR shares into ordinary shares.

The BSE Sensex is currently trading at 66673.54, up by 317.83 points or 0.48% after trading in a range of 66431.34 and 66692.02. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.25%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.88%, Industrials up by 1.19%, Utilities up by 1.16%, Power up by 1.06% and Telecom up by 1.00%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Larsen & Toubro up by 3.89%, Tata Motors up by 2.20%, ITC up by 1.43%, Power Grid up by 1.29% and Sun Pharma up by 1.05%. On the flip side, HDFC Bank down by 0.37%, Tech Mahindra down by 0.18%, Mahindra & Mahindra down by 0.08%, TCS down by 0.07% and ICICI Bank down by 0.07% were the top losers.

Meanwhile, expressing optimism over the country’s growth prospects, the International Monetary Fund (IMF) in its latest update of the World Economic Outlook (WEO) has revised upward India’s growth rate projection by 0.2 percentage point to 6.1 per cent for 2023, from earlier projection in April. It said this is reflective of the momentum from strongerthanexpected growth in the fourth quarter of 2022 as a result of stronger domestic investment.

According to the report, global growth is projected to fall from an estimated 3.5 per cent in 2022 to 3 per cent in both 2023 and 2024.While the forecast for 2023 is modestly higher than predicted in the April 2023 WEO, it remains weak by historical standards. The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7 per cent in 2022 to 6.8 per cent in 2023 and 5.2 per cent in 2024, it said. Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.

The IMF said the recent resolution of the US debt ceiling standoff and, earlier this year, strong action by authorities to contain turbulence in the US and Swiss banking, reduced the immediate risks of financial sector turmoil. It said this moderated adverse risks to the outlook. However, the balance of risks to global growth remains tilted to the downside. Inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weatherrelated events, triggering more restrictive monetary policy.

It said financial sector turbulence could resume as markets adjust to further policy tightening by central banks. China’s recovery could slow, in part as a result of unresolved real estate problems, with negative crossborder spillovers. The report said ‘Sovereign debt distress could spread to a wider group of economies. On the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient’.

The CNX Nifty is currently trading at 19762.90, up by 82.30 points or 0.42% after trading in a range of 19716.70 and 19765.95. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.94%, Tata Motors up by 2.27%, Hero MotoCorp up by 1.42%, ITC up by 1.38% and UPL up by 1.36%. On the flip side, SBI Life Insurance down by 1.58%, Apollo Hospital down by 0.58%, Divi's Lab down by 0.56%, Hindalco down by 0.53% and Cipla down by 0.47% were the top losers.

Asian markets are trading mixed; Hang Seng declined 145.46 points or 0.75% to 19,288.94, Nikkei 225 slipped 19.24 points or 0.06% to 32,663.27, Shanghai Composite weakened 11.29 points or 0.35% to 3,220.23 and KOSPI was down by 8.76 points or 0.33% to 2,627.70. On the other hand, Straits Times rose 25.04 points or 0.76% to 3,311.20, Taiwan Weighted added 13.43 points or 0.08% to 17,212.32 and Jakarta Composite was up by 7.41 points or 0.11% to 6,925.12.