Indian markets trade higher in early deals

Domestic equity indices made positive start on Tuesday tacking firm close on Wall Street as well as gains in all the indices of other Asian markets, as traders welcomed China's announcement of a slew of measures over the weekend to bolster the country's equity market as well as fuel an increase in spending and drive economic growth. Indian markets are trading higher in early deals with gains of around 0.25% each as buying in all the sector indices led by realty. Sentiments got some boost as India Ratings said with falling trade deficit, India's current account deficit is likely to narrow to around $10 billion or 1 per cent of GDP in the April-June quarter of the ongoing fiscal. The country's current account deficit (CAD) stood at $18 billion or 2.1 per cent in the corresponding period of the previous fiscal. However, upside remained capped as some cautiousness crept in with a private report that India is poised for its lowest monsoon rains in eight years, with the El Nino weather pattern seen crimping September precipitation after an August that is on track to be the driest in over a century. 

On the sectoral front, banking stocks are in focus with report that banking system liquidity has been gradually improving due to higher government spending. According to Reserve Bank of India (RBI) data, banks parked Rs 17,203 crore with the apex bank. In stock specific development, LTIMindtree rose after collaborating with SaaS company CAST AI.

The BSE Sensex is currently trading at 65138.94, up by 142.34 points or 0.22% after trading in a range of 65033.27 and 65229.03. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Realty up by 1.49%, Utilities up by 0.73%, IT up by 0.54%, Auto up by 0.53% and Power up by 0.52%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were JIO Financial up by 1.77%, Tech Mahindra up by 1.52%, Power Grid up by 1.03%, Bajaj Finserv up by 0.85% and Tata Motors up by 0.84%. On the flip side, Bharti Airtel down by 1.71%, Axis Bank down by 0.53%, Reliance Industries down by 0.37%, Indusind Bank down by 0.35% and Hindustan Unilever down by 0.24% were the top losers.

Meanwhile, expressing optimism over India’s current account deficit (CAD) situation, India Ratings has said that the country’s CAD is likely to narrow to around $10 billion or 1 per cent of Gross Domestic Product (GDP) in April-June quarter (Q1) of the current fiscal year (FY24), with falling trade deficit. The country's CAD stood at $18 billion or 2.1 per cent in the corresponding period of the previous fiscal. 

However, it expects CAD to rise in the second quarter of the current fiscal as it sees merchandise exports declining below $100 billion after a gap of eight quarters. Imports are expected to be around $163 billion during the period, up from a seven-quarter low of $160.3 billion witnessed in Q1 FY24, due to increase in crude prices since July. This will have the overall trade deficit printing in at a three-quarter high of $64 billion. 

Another reason is the moderation in services demand since June due to the slowdown in the global economy. Global services PMI stood at a five-month low of 52.7 in July. Thus, it said services trade surplus to remain around $36 billion in Q2. Merchandise exports contracted even in Q1 by coming in 14.1 per cent lower than the year-ago period. This was the biggest decline in the last 12 quarters. Goods exports stood at a seven-quarter low of $104 billion in Q1 FY24.

Merchandise imports came down to a seven-quarter low of $160.3 billion in Q1, while goods imports shrunk 12.7 per cent in the same period, which was the sharpest fall since Q2 FY21. Benign commodity prices helped in reducing the country's import bill as the inbound shipments of critical commodities such as crude (18.5 per cent) coal (32.4 per cent), organic chemicals (31.9 per cent) and vegetable oils (32.9 per cent) came down in value terms.

The CNX Nifty is currently trading at 19354.55, up by 48.50 points or 0.25% after trading in a range of 19320.40 and 19377.90. There were 41 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were JIO Financial up by 1.82%, Tech Mahindra up by 1.47%, UPL up by 1.24%, Cipla up by 1.15% and Power Grid up by 1.05%. On the flip side, Bharti Airtel down by 1.69%, Axis Bank down by 0.62%, Dr. Reddy's Lab down by 0.46%, Britannia Industries down by 0.40% and Apollo Hospital down by 0.36% were the top losers.

All Asian markets are trading higher; Hang Seng advanced 368.35 points or 1.99% to 18,499.09, Nikkei 225 surged 109.61 points or 0.34% to 32,279.60, Shanghai Composite strengthened 43.18 points or 1.37% to 3,141.82, Taiwan Weighted added 29.91 points or 0.18% to 16,539.17, Jakarta Composite gained 27.88 points or 0.4% to 6,949.61, Straits Times rose 12.22 points or 0.38% to 3,225.90 and KOSPI was up by 7.87 points or 0.31% to 2,551.28.