Markets trade higher on positive global cues as yields stabilize, oil prices decline

Indian equity benchmarks made optimistic start on Wednesday tracking positive cues from the US overnight after oil prices extended declines and yields stabilized. Domestic indices are trading with decent gains in early deals on account of value buying after four consecutive session of losses. Foreign fund inflows also aided sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) added shares worth net Rs 252.25 crore on October 23, 2023. Sentiments got a boost as a finance ministry report said India will remain the fastest-growing major economy in the world in 2023-24 fiscal on the back of strong domestic fundamentals and benign inflation expectations. The report emphasised that India’s macroeconomic outlook for fiscal 2023-24 is bright and is solidly underpinned by strong domestic fundamentals. Some support also came in as S&P Global Market Intelligence said in its latest issue of PMI that India, the world’s fifth largest economy in the world, is likely to overtake Japan to become the world’s third-largest economy with a GDP of $7.3 trillion by 2030. 

On the global front, most of the Asian markets are trading higher, with Chinese and Hong Kong markets rising sharply, spurred by rare fiscal measures from Beijing to address the ongoing severe liquidity crunch in the domestic property market as well as to stem the stock market's sell-off. Back home, sugar industry related stocks are in focus with a private report that lower cane availability is expected to reduce sugar production by 3-4 per cent, which will trigger a price rise. Sugar prices are likely to rise 2-3 per cent in the backdrop of weak supply and strong demand. In stock specific development, Delta Corp jumped after the Bombay HC directed DGGI Hyderabad to not pass final orders on Rs 16,195-crore tax notice against the company without its prior permission.

The BSE Sensex is currently trading at 64717.56, up by 145.68 points or 0.23% after trading in a range of 64502.57 and 64765.52. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Metal up by 1.59%, Basic Materials up by 0.83%, PSU up by 0.70%, Energy up by 0.60% and Oil & Gas up by 0.57%, while Healthcare down by 0.13% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 1.75%, JSW Steel up by 1.59%, HCL Technologies up by 1.00%, Bajaj Finserv up by 0.97% and Kotak Mahindra Bank up by 0.93%. On the flip side, NTPC down by 0.66%, Infosys down by 0.65%, Hindustan Unilever down by 0.34%, Titan Company down by 0.32% and Bharti Airtel down by 0.07% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, the finance ministry in its latest report has said that the country will remain the fastest-growing major economy in the world in 2023-24 fiscal on the back of strong domestic fundamentals and benign inflation expectations. It also flagged that global uncertainties have been compounded by recent developments in the Persian Gulf and depending on how the situation develops, crude oil prices may push higher. Further, the relentless supply of US Treasuries and continued restrictive monetary policy in the US (with further monetary policy tightening not ruled out) could cause financial conditions to be restrictive.

The report said at current levels, US stock markets have greater downside risk than upside. If the downside risk materialises, it will have spill over effects on other markets. It said ‘Fraught geopolitical conditions can cause a general increase in global risk aversion. If these risks worsen and are sustained, they can affect economic activity in other countries, including India’. However, the report emphasised that India’s macroeconomic outlook for fiscal 2023-24 is bright and is solidly underpinned by strong domestic fundamentals. Alongside private consumption, investment demand is also firming up. There are additional growth levers in broad-based industrial growth and buoyant residential property markets. Industrial capacity utilisation has improved.

Further, the report said improved reservoir levels augur well for the upcoming Rabi season. Core inflation is declining steadily while food inflation has eased. The ministry noted that with a lower trade deficit and a comfortable forex reserves position, India’s external account looks robust. Echoing all this, Reserve Bank of India’s forward looking surveys on manufacturing, consumer confidence, employment and inflation expectations have optimistic findings.

The CNX Nifty is currently trading at 19326.25, up by 44.50 points or 0.23% after trading in a range of 19259.55 and 19336.30. There were 34 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Hindalco up by 3.04%, Tata Steel up by 1.87%, LTIMindtree up by 1.60%, JSW Steel up by 1.50% and Adani Ports & SEZ up by 1.33%. On the flip side, HDFC Life Insurance down by 1.20%, Apollo Hospital down by 1.20%, Cipla down by 0.77%, Infosys down by 0.61% and NTPC down by 0.57% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 310.98 points or 1% to 31,373.33, Hang Seng rose 189.11 points or 1.11% to 17,180.64, Taiwan Weighted strengthened 84.78 points or 0.52% to 16,394.54, Jakarta Composite gained 51.9 points or 0.76% to 6,858.66, Shanghai Composite added 15.04 points or 0.51% to 2,977.28 and Straits Times was up by 3.66 points or 0.12% to 3,087.54, while KOSPI was down by 15.28 points or 0.64% to 2,368.23.