Domestic indices trade flat in early deals; Bajaj Finance rises around 4%

Indian equity benchmarks started the new week flat with positive bias amid mixed cues from global markets. Soon, domestic indices turned volatile and are trading flat in early deals ahead of monthly F&O expiry later in the week. Continued foreign fund outflows dented domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 1,326.74 crore on September 22. Traders were concerned as the Reserve Bank said India’s foreign exchange reserves declined $867 million to $593.037 billion in the week ended September 15. However, downside remained capped as Chief Economic Advisor V Anantha Nageswaran said the inclusion of Indian government bonds in JP Morgan's emerging market debt index is expected to broaden India's investor base, potentially appreciate the rupee, and make it easier for Indian financial institutions to lend money. 

On the global front, Asian markets are trading mixed following the broadly negative cues from Wall Street on Friday, as worries about inflation, higher interest rates and economic slowdown weighed on the market after the US Fed forecast another rate hike before the end of the year and indicated they may leave rates higher for longer than previously anticipated through 2024. Back home, shipping minister Sarbananda Sonowal has said India expects to sign investment pacts worth Rs 10 lakh during the Global Maritime India Summit in New Delhi scheduled for October 17-19. In stock specific development, Delta Corp crashed as it has received a tax notice from the government, demanding Rs 11,140 crore in taxes, interest, and penalties for the period July 2017 to March 2022.

The BSE Sensex is currently trading at 66056.87, up by 47.72 points or 0.07% after trading in a range of 65872.54 and 66118.56. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.05%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.48%, Basic Materials up by 0.26%, Consumer Discretionary up by 0.25%, Auto up by 0.23% and Telecom up by 0.22%. while Capital Goods down by 0.51%, Power down by 0.43%, TECK down by 0.38%, IT down by 0.38% and Utilities down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 3.86%, Bajaj Finserv up by 3.01%, Asian Paints up by 1.34%, Maruti Suzuki up by 1.01% and Ultratech Cement up by 0.85%. On the flip side, Larsen & Toubro down by 0.82%, Infosys down by 0.79%, Power Grid down by 0.75%, HCL Technologies down by 0.51% and ITC down by 0.50% were the top losers.

Meanwhile, exuding confidence over India’s economic growth, the finance ministry in its August edition of Monthly Economic Review has said that the country will achieve 6.5 per cent growth in FY24 on the back of improved corporate profitability, private capital formation and bank credit growth, notwithstanding the risks of rising crude oil prices and monsoon deficit. It added the 7.8 per cent growth recorded in the first quarter (April-June) was on account of strong domestic demand, consumption and investment. The growth was also witnessed in various high-frequency indicators.

Flagging certain risks like steadily climbing crude oil prices in the global market, impact of monsoon deficit in August on Kharif and Rabi crops, the review said ‘that needs to be assessed’. At the same time, it observed, the rains in September have erased a portion of the rainfall deficit at the end of August. Furthermore, it said a stock market correction, in the wake of an overdue global stock market correction, is an ever present risk, and offsetting these risks are the bright spots of corporate profitability, private sector capital formation, bank credit growth and activity in the construction sector.

Observing that the strength of domestic investment is the result of the government’s continued emphasis on capital expenditure, the review said measures implemented by the central government have also incentivised states to increase their capex spending. The external demand has further complemented the domestic growth stimulus, it said, adding, the contribution of net exports to GDP growth has increased in Q1FY24, as services exports have performed well. It said high Frequency Indicators (HFIs) for July/August 2023 reflect sustenance of growth momentum in Q2FY24.

With regard to the banking sector, it said a variety of indicators suggest increasing resilience of the sector through declining Non-Performing Assets (NPA), improving Capital to Risk-weighted Asset Ratio (CRAR), rising Return on Assets (RoA) and Return on Equity (RoE) as of March 2023. Similarly, as of March 2023, data for Non-Banking Finance Companies (NBFCs) indicated improvements in their profitability and risk-taking behaviour. On retail inflation, the ministry said it decreased in August, with both core inflation and food inflation easing from the July figure.

The CNX Nifty is currently trading at 19673.00, down by 1.25 points or 0.01% after trading in a range of 19634.55 and 19713.65. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 3.76%, Bajaj Finserv up by 2.92%, Asian Paints up by 1.56%, Maruti Suzuki up by 1.09% and Bajaj Auto up by 0.94%. On the flip side, SBI Life Insurance down by 1.94%, Dr. Reddy's Lab down by 0.90%, Infosys down by 0.86%, Power Grid down by 0.85% and Larsen & Toubro down by 0.81% were the top losers.

Asian markets are trading mixed; Hang Seng slipped 221.57 points or 1.24% to 17,835.88, KOSPI fell 14.56 points or 0.58% to 2,493.57, Shanghai Composite weakened 12.19 points or 0.39% to 3,120.24 and Jakarta Composite was down by 5.70 points or 0.08% to 7,011.14. On the other hand, Nikkei 225 surged 276.2 points or 0.85% to 32,678.61, Straits Times rose 5.10 points or 0.16% to 3,209.92 and Taiwan Weighted was up by 120.24 points or 0.73% to 16,464.72.