Markets trade in fine-fettle in early deals as India’s economy grew at fastest pace

Indian equity benchmarks made flat-to-positive start on Friday tracking positive cues from Asian counterparts. Soon, markets extend their gains and are trading in fine-fettle in early deals as India’s economy grew at the fastest pace in four quarters -- at 7.8 per cent -- in the April-June period of FY24, aided by a supportive base along with a robust increase in investment. Meanwhile, India’s gross tax revenue, comprising both direct and indirect taxes between April and July, reported a growth of merely 2.8 per cent to Rs 8.9 trillion compared to the same period a year ago. However, upside remained capped as data compiled by the India Meteorological Department (IMD) showed India witnessed the driest August in more than a century as the country received 36% less rainfall than normal in 2023. It added the country has received 10% lower rainfall than normal from June 1 to August 31. Moreover, investors are eyeing manufacturing PMI data to be out later in the day.

On the global front, Asian markets are trading higher on continued optimism the US Fed will leave interest rates unchanged amid data showing US consumer price growth accelerated in line with street estimates in July. However, upside remained caped as the manufacturing sector in Japan continued to contract in August, and at a steady pace, the latest survey from Jibun Bank revealed on Friday with a manufacturing PMI score of 49.6. Hong Kong trading is suspended due to super typhoon Saola. Singapore market is closed on account of Election day.

Back home, auto stocks are buzzing reacting to their monthly sales numbers. Textile stocks are in focus as the Textiles Ministry decided to extend the deadline for fresh applications under the Production Linked Incentive (PLI) scheme for textiles, covering MMF (manmade fibre) apparel, MMF fabrics and products of technical textiles, by another two months, till October 31 2023. In stock specific development, Genus Power rallied after its arm secured letter of award (LA) worth Rs 2,247.37 crore (net of taxes) for 24.18 lakh Smart Prepaid Meters.

The BSE Sensex is currently trading at 64994.22, up by 162.81 points or 0.25% after trading in a range of 64818.37 and 64995.01. 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 0.17%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Metal up by 2.58%, Telecom up by 1.11%, Oil & Gas up by 1.06%, Energy up by 0.97% and Auto up by 0.78%, while Healthcare down by 0.20% and Capital Goods down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.17%, JSW Steel up by 2.83%, Mahindra & Mahindra up by 1.43%, Tata Motors up by 1.01% and Power Grid up by 0.94%. On the flip side, NTPC down by 0.80%, Sun Pharma down by 0.39%, Larsen & Toubro down by 0.33%, Asian Paints down by 0.33% and HDFC Bank down by 0.19% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) V Anantha Nageswaran has said the India’s economy is expected to grow at 6.5 per cent in the current fiscal (FY24) notwithstanding deficient monsoon rains. Nageswaran also said that there is no real cause for concern that inflation would spike out of control as both the government and the Reserve Bank of India are taking adequate steps to maintain supply and keep prices under check.

He said food inflation is likely to subside with the arrival of fresh stock and government measures. However, the impact of deficient rains in August is to be watched. He mentioned ‘There is momentum in economic activity in general and it is not driven by price-related distortions. Therefore, our projections still are very comfortably placed at 6.5 per cent for the current financial year.’

Further, he said rising crude prices may warrant attention and prolonged geopolitical uncertainty and likely tighter financial conditions can pose risk to growth. India recorded economic growth of 7.8 per cent in the April-June quarter of 2023-24 against 13.1 per cent in the year-ago period. Besides, with regard to fiscal deficit, he said there is no threat to 5.9 per cent fiscal deficit announced in the Budget.

The CNX Nifty is currently trading at 19317.60, up by 63.80 points or 0.33% after trading in a range of 19255.70 and 19318.75. There were 39 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.37%, Tata Steel up by 3.34%, JIO Financial Services up by 2.91%, ONGC up by 2.76% and JSW Steel up by 2.46%. On the flip side, NTPC down by 0.93%, Divi's Lab down by 0.70%, Asian Paints down by 0.53%, Adani Ports & SEZ down by 0.47% and Sun Pharma Industries down by 0.27% were the top losers.

Asian markets are trading in green; Nikkei 225 surged 134.46 points or 0.41% to 32,753.80, Taiwan Weighted added 24 points or 0.14% to 16,658.51, Jakarta Composite gained 21.29 points or 0.31% to 6,974.55, Shanghai Composite strengthened 7.31 points or 0.23% to 3,127.19 and KOSPI was up by 4.09 points or 0.16% to 2,560.36.