Domestic indices trade higher with decent gains in early deals

Mirroring strong global cues, Indian equity benchmarks started the session on an optimistic note on Tuesday. Domestic indices are trading higher with decent gains of around half a percent each in early deals on account of value buying. Investors are eyeing earnings from India Inc for more directional cues. Sentiments got a boost as a survey by industry body Ficci stated that India’s economic growth is expected at 6.3 per cent during 2023-24 on the back of good health of the financial sector and uptick in private investment even as downside risks remain. However, upside remained capped amid foreign fund outflows. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 593.66 crore on October 16. 

On the global front, all the Asian markets are trading higher as traders were encouraged by diplomatic efforts from the U.S. and its allies to prevent the Israel-Hamas war from expanding into a wider conflict. Back home, Prime Minister Narendra Modi will virtually inaugurate the third edition of the Global Maritime India Summit 2023 on October 17, and unveil a blueprint for the maritime blue economy. In stock specific development, CEAT surged as its Q2 net profit jumps 32 times from year ago.

The BSE Sensex is currently trading at 66485.49, up by 318.56 points or 0.48% after trading in a range of 66446.31 and 66559.82. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.54%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Utilities up by 1.41%, Power up by 1.15%, Consumer Durables up by 0.82%, PSU up by 0.66% and Metal up by 0.64%, while Realty down by 0.35% was the sole losing index on BSE.

The top gainers on the Sensex were Power Grid up by 1.70%, Bajaj Finance up by 1.08%, Tata Steel up by 0.91%, HDFC Bank up by 0.88% and Tech Mahindra up by 0.79%. On the flip side, Larsen & Toubro down by 0.52% and Hindustan Unilever down by 0.02% were the only losers.

Meanwhile, with good health of the financial sector and uptick in private investment, industry body -- the Federation of Indian Chambers of Commerce & Industry (Ficci) in its latest survey report showed that India’s economic growth is expected at 6.3 per cent during 2023-24 even as downside risks remain. It said ‘Persisting headwinds on account of geopolitical stress, slowing growth in China, lagged impact of monetary tightening and below normal monsoons pose downside risks to growth’. The latest round of Ficci’s Economic Outlook Survey pegs annual median gross domestic product (GDP) growth for 2023-24 at 6.3 per cent – with a minimum and maximum growth estimate of 6 per cent and 6.6 per cent, respectively. The median growth forecast for agriculture and allied activities has been put at 2.7 per cent for 2023-24. This marks a moderation vis-a-vis growth of about 4 per cent reported in 2022-23.

The survey showed that the El Nino effect has had an impact on the spatial distribution of rainfall this monsoon. Industry and services sector, on the other hand, are anticipated to grow 5.6 per cent and 7.3 per cent, respectively in current fiscal year. Ficci said the survey was conducted in September 2023 and drew responses from leading economists representing industry, banking and financial services sector. According to survey results, median GDP growth is estimated to slow down to 6.1 per cent and 6 per cent in Q2 2023-24 and Q3 2023-24, respectively - after posting a four-quarter high growth of 7.8 per cent in Q1 2023-24.

Further, the chamber said the median forecast for CPI based inflation has been put at 5.5 per cent for 2023-24, with a minimum and maximum range of 5.3 per cent and 5.7 per cent, respectively. The survey participants opined that the course of inflation remains uncertain. It said ‘There was an unanimous view among the participants that global growth is poised to slow in the current year vis-a-vis 2022, and this trend is expected to continue in the year 2024 as well’, and added significant downside risks continue to remain on fore that could hamper the momentum in recovery.

Back home, the survey said though India’s economic performance has remained relatively steady amid recent challenges, the country has not been unscathed from the external shocks. It added weak external demand is already reflecting in India’s merchandise exports performance and is expected to be a drag on domestic growth. It said ‘Nonetheless, growth in India is expected to hold ground on the back of good health of the financial sector, robust urban demand, uptick in private investment as a result of government’s front-loading of capex, pick up in real estate/construction sector and the forthcoming festive season’. It further said Reserve Bank’s policy repo rate is expected to remain unchanged until the end of current financial year. The latest survey results forecast repo rate at 6.5 per cent as at March-end 2024.

The CNX Nifty is currently trading at 19827.00, up by 95.25 points or 0.48% after trading in a range of 19809.75 and 19849.75. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 1.97%, Tata Consumer Products up by 1.53%, HDFC Life Insurance up by 1.01%, Bajaj Finance up by 0.99% and Adani Enterprises up by 0.95%. On the flip side, Divi's Lab down by 0.57%, Larsen & Toubro down by 0.53%, ONGC down by 0.29% and UPL down by 0.18% were the top losers.

All Asian markets are trading higher; Nikkei 225 surged 364.46 points or 1.14% to 32,023.49, Hang Seng strengthened 113.18 points or 0.64% to 17,753.54, Taiwan Weighted gained 28.57 points or 0.17% to 16,680.81, KOSPI increased 27.19 points or 1.1% to 2,463.43, Jakarta Composite added 24.15 points or 0.35% to 6,920.44, Straits Times rose 9.92 points or 0.31% to 3,173.81 and Shanghai Composite was up by 7.94 points or 0.26% to 3,081.75.