Domestic indices trade tad higher in early deals

Indian equity benchmarks started the new month on positive note tracking overnight gains on Wall Street. Markets are managing to trade above neutral lines in early deals on Tuesday. Marketmen are looking ahead to the manufacturing PMI data to be out later in the day for more cues. Some support came in with a private report that the pace of credit offtake continued to be robust in June 2023, with sectors clocking year-on year (YoY) growth of between 8.1 per cent and 26.7 per cent. Traders took note of report that India is expected to receive normal rainfall in the August-September period after excess precipitation in July. Though, upside remained capped amid foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 701.17 crore on July 31. 

Most of the Asian markets are trading higher amid China stimulus hopes and optimism that most global central banks may be either close to a peak or already done with interest-rate hiking. China’s top economic planning agency outlined details to stimulate consumer spending and reports suggested that Beijing and Shenzhen may ease curbs on the property sector. 

Back home, on the sectoral front, auto stocks are in focus reacting to their monthly sales numbers. Oil & gas sector stocks are in limelight as the Indian government hiked windfall tax on petroleum crude to Rs 4,250 ($51.68) per tonne from Rs 1,600 with effect from August 1. In stock specific developments, Petronet LNG rose on reporting 13 percent year-on-year growth in Q1 net profit. However, Power Grid Corp tumbled after its net profit declined nearly 6 per cent to Rs 3,542.7 crore, from Rs 3,801 crore in the year-ago period. 

The BSE Sensex is currently trading at 66588.48, up by 60.81 points or 0.09% after trading in a range of 66530.99 and 66645.80. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.14%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Telecom up by 0.77%, IT up by 0.57%, TECK up by 0.55%, Metal up by 0.51% and Industrials up by 0.28%, while Realty down by 0.85% and Power down by 0.05% were the only losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.20%, Tech Mahindra up by 1.30%, Tata Motors up by 0.90%, HCL Technologies up by 0.78% and Mahindra & Mahindra up by 0.76%. On the flip side, Power Grid down by 4.23%, Maruti Suzuki down by 0.91%, Bajaj Finserv down by 0.77%, Hindustan Unilever down by 0.42% and Reliance Industries down by 0.37% were the top losers.

Meanwhile, India Meteorological Department (IMD) has said that the country is likely to record normal rainfall during the second half of the monsoon season following excess precipitation in July, even as El Nino and other unfavourable conditions may suppress rain in August. Scientists at the IMD said August accounts for around 30 percent of the precipitation during the monsoon season. Although El Nino, the warming of waters in the Pacific Ocean near South America, has not impacted the monsoon performance so far, its influence is likely to be visible in the second phase (August-September period) of the monsoon.

El Nino is generally associated with weakening monsoon winds and dry weather in India. The IMD had earlier warned that El Nino might affect the second half of the southwest monsoon. IMD Director General Mrutyunjay Mohapatra said ‘Though the country is expected to experience normal rainfall in August and September, it is likely to be on the lower side (94 percent to 99 percent) of the normal (422.8 mm)’. The IMD said rainfall recorded between 94 percent and 106 percent of the long-period average (LPA), or 50-year average, is considered normal. It added rainfall in August is predicted to be below normal (less than 94 percent of LPA), but the situation is expected to improve comparatively in September.

Normal rainfall is critical for India's agricultural landscape, with 52 percent of the net cultivated area relying on it. Additionally, it plays a crucial role in replenishing reservoirs essential for drinking water and power generation throughout the country. Rainfed agriculture contributes to around 40 per cent of the country's total food production, making it a vital contributor to India's food security and economic stability. The IMD said normal to above-normal rainfall is very likely over east-central India, east and northeast regions, and most subdivisions along the Himalayas in August and September. The east and northeast regions have received 25 percent less rainfall this season so far. Below-normal rainfall is predicted in most parts of peninsular India and western parts of northwest and central India.

According to Mohapatra, India saw a turnaround in monsoon rains, shifting from a nine per cent deficit in June to 13 per cent excess rainfall in July. However, east and northeast parts of the country recorded the third-lowest precipitation (280.9 mm) in July since 1901. The region received an all-time low of 234.8 mm of precipitation in July last year and 249.5 mm in 1903. On the other hand, northwest India recorded the highest rainfall in July since 2001, at 258.6 mm. Mohapatra pointed out that the east and northeast regions have been witnessing a decreasing trend in monsoon rains and an increasing trend in mean temperature and minimum temperature. The IMD chief added that India recorded 1,113 heavy rainfall events and 205 extremely heavy rainfall events in July, the highest in five years.

The CNX Nifty is currently trading at 19770.50, up by 16.70 points or 0.08% after trading in a range of 19750.60 and 19795.60. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.08%, Tech Mahindra up by 1.30%, Hindalco up by 1.29%, Tata Motors up by 0.86% and Mahindra & Mahindra up by 0.81%. On the flip side, Power Grid down by 4.25%, Apollo Hospital down by 1.45%, UPL down by 1.14%, Maruti Suzuki down by 0.92% and ONGC down by 0.71% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 230.53 points or 0.69% to 33,402.75, Taiwan Weighted added 33.81 points or 0.2% to 17,179.24, KOSPI increased 30.64 points or 1.16% to 2,663.22, Shanghai Composite strengthened 3.94 points or 0.12% to 3,294.98 and Hang Seng was up by 2.34 points or 0.01% to 20,081.28. On the other hand, Jakarta Composite fell 17.16 points or 0.25% to 6,914.20 and Straits Times was down by 4.56 points or 0.14% to 3,369.42.