Domestic indices trade higher in early deals

Indian equity benchmarks have made positive start on Friday amid mixed Asian cues. Domestic indices are trading higher with decent gains in early deals on account of value buying at reduced levels after 3 days of continued digging. Sensex and Nifty are trading above their physiological levels of 65,400 and 19,400, respectively. Some support came in as the finance ministry in a report stated that growth momentum gathered in the January-March quarter will be sustained in the April-June quarter of the current financial year amid the strengthening of the current account balance. Adding more optimism, a S&P Global report said India can become a $6.7 trillion economy by 2031, from $3.4 trillion currently, if the country clocks an average growth of 6.7 per cent for 7 years. 

Though, upside remain capped ahead of the U.S. jobs report due later in the day that could offer more clues on the Federal Reserve's rate-hike path. Asian markets are trading mixed amid the broadly negative cues from global markets overnight. Some buying activity witnessed as traders took the opportunity to pick up stocks at relatively reduced levels following the recent sell-off. They are also reluctant to make significant moves while assessing the monetary policy moves of several central banks and the outlook for global economic growth.

Back home, in stock specific developments, Zomato soared to hit 52-week high after the food aggregator turned profitable for the first time ever in the first quarter (Q1) of 2023-24 (FY24). However, Vedanta dropped a day after S&P Global Ratings downgraded its parent firm Vedanta Resources' credit outlook from stable to negative.

The BSE Sensex is currently trading at 65465.85, up by 225.17 points or 0.35% after trading in a range of 65431.22 and 65588.53. 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 0.52%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were IT up by 1.13%, Consumer Durables up by 0.91%, TECK up by 0.85%, Metal up by 0.83% and Industrials up by 0.66%, while there are no losing indices on BSE sectoral front.

The top gainers on the Sensex were HCL Technologies up by 1.72%, Wipro up by 1.31%, Tech Mahindra up by 1.29%, TCS up by 1.04% and Indusind Bank up by 0.94%. On the flip side, Power Grid down by 0.54%, Tata Motors down by 0.36%, ICICI Bank down by 0.23%, NTPC down by 0.23% and Hindustan Unilever down by 0.21% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, S&P Global in its latest report has said that the country can become a $6.7 trillion economy by 2031, from $3.4 trillion currently, if the country clocks an average growth of 6.7 per cent for 7 years. India had clocked a 7.2 per cent GDP growth in 2022-23 fiscal. But, the report said a global slowdown and lagged effect of a policy rate hike by RBI could slow down growth to 6 per cent in the current fiscal.

The report jointly authored by S&P Global Ratings Global Chief Economist Paul Gruenwald, Crisil Chief Economist Dharmakirti Joshi and S&P Global Market Intelligence Chief Economist Asia Pacific Rajiv Biswas said ‘We expect India to grow 6.7 per cent (average) from fiscal 2024 to fiscal 2031, catapulting GDP to $6.7 trillion from $3.4 trillion in fiscal 2023. Per capital GDP will rise to about $4,500’. It said the macro challenge for India in the upcoming decade is to turn traditionally uneven growth into a high and stable trend. It added that capital accumulation will drive India’s economy toward this desirable path with the government and increasingly private sector investing in infrastructure and manufacturing.

The report also said that India will likely see gains from reforms such as Goods and Services Tax. Further, the implementation of the Insolvency and Bankruptcy Code would also help to drive a healthy credit culture. It said that even with India recalibrating toward manufacturing, services will maintain a strong role in the economy. The challenge over the next decade and beyond will be to create the conditions for sustained growth and achieving this will likely require structural reforms in 3 key areas - raise labour participation, especially among women, and boost skills, lift private investment in manufacturing and bolster external competitiveness through FDI. It noted a massive domestic market, along with gradually improving global competitiveness, is helping India draw foreign investment.

The CNX Nifty is currently trading at 19443.25, up by 61.60 points or 0.32% after trading in a range of 19441.55 and 19498.35. There were 33 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 5.17%, Hindalco up by 2.00%, HCL Technologies up by 1.72%, LTIMindtree up by 1.59% and SBI Life Insurance up by 1.58%. On the flip side, Adani Enterprises down by 0.98%, Bajaj Auto down by 0.78%, Power Grid down by 0.62%, Tata Motors down by 0.58% and BPCL down by 0.49% were the top losers.

Asian markets are trading mixed; Hang Seng jumped 193.43 points or 1% to 19,614.30, Nikkei 225 surged 27.3 points or 0.08% to 32,186.58, Shanghai Composite strengthened 15.45 points or 0.47% to 3,295.91 and KOSPI increased 2.19 points or 0.08% to 2,607.58. On the other hand, Taiwan Weighted lost 56.39 points or 0.33% to 16,837.34, Jakarta Composite fell 14.05 points or 0.2% to 6,884.03 and Straits Times was down by 6.33 points or 0.19% to 3,297.73.