Sensex, Nifty open at fresh record highs as BJP sweeps polls in three states

Indian equity benchmarks opened at fresh lifetime highs on Monday as the Bhartiya Janata Party's (BJP) decisive win in the assembly elections fueled a sharp rally. Domestic indices are trading in fine-fettle in early deals with gains of around one and half a percent each. Traders took encouragement as the finance ministry said GST collections jumped 15 per cent to nearly Rs 1.68 lakh crore in November on increased domestic activity and festive season buying. Some support came in with report that after turning net sellers in the past two months, FPIs again made a comeback in the Indian stock markets in November and pumped in Rs 9,000 crore amid fall in US treasury bond yields and the resilience of the domestic market. Besides, the latest data by the Reserve Bank of India (RBI) showed that India's foreign exchange reserves increased by $2.54 billion to $597.94 billion for the week ending November 24. 

On the global front, Asian markets are trading mixed as strong cues from U.S. markets, on the prospect of an early interest rate cut by the Federal Reserve, were offset by persistent concerns over an economic slowdown in China. Back home, sugar industry stocks are in focus as cooperative body NFCSFL said India's sugar production was down by 10.65 per cent at 4.32 million tonne during October-November, the first two months of the ongoing 2023-24 season. In stock specific development, Adani Ports jumped on 42% YoY growth in November 2023 cargo volumes.

The BSE Sensex is currently trading at 68487.96, up by 1006.77 points or 1.49% after trading in a range of 68274.47 and 68587.82. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.85%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Utilities up by 2.83%, Power up by 2.77%, PSU up by 2.57%, Oil & Gas up by 2.52% and Energy up by 2.18%, while there was no loser on BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 3.19%, SBI up by 2.75%, NTPC up by 2.75%, Mahindra & Mahindra up by 2.66% and Larsen & Toubro up by 2.59%. On the flip side, Maruti Suzuki down by 0.48% was the sole loser.

Meanwhile, Crisil Ratings in its report has said that states' debt will remain elevated at 31-32 per cent of their gross domestic product (GDP) amid higher capital outlays and moderate revenue growth this fiscal, with overall borrowings likely to rise by 9 per cent to over Rs 87 lakh crore. Indebtedness of a state is measured as the ratio of its debt to gross state domestic product (GSDP). Before Covid, the debt-GSDP ratio was at 28-29. But the aggregate gross fiscal deficit (GFD) as a ratio of GSDP is expected to remain at 2.5, well below the mandated level of 3 under the Fiscal Responsibility and Budget Management Act.

With lower-than-expected revenue growth, states are forced to borrow more to expand capital outlays, besides meeting high committed revenue expenditure related to salaries, pensions and interest costs. This, along with modest single-digit revenue growth, will keep the debt level high at 31-32 per cent of their gross domestic output. The report is based on the numbers available from the top 18 states (Maharashtra, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh, Telangana, Rajasthan, Bengal, Madhya Pradesh, Andhra Pradesh, Kerala, Odisha, Punjab, Bihar, Chhattisgarh, Haryana, Jharkhand and Goa), accounting for 90 per cent of the aggregate GSDP.

After a small revenue surplus in fiscal 2022, the states have slipped into deficit in fiscal 2023, as overall revenue grew at a modest 8 per cent while revenue expenditure rose faster at 11 per cent on-year. This fiscal, overall revenue is expected to rise only 6-8 per cent, supported by goods and services tax collections, devolutions from the Centre, and taxes and duties on liquor. On the other hand, revenue expenditure is set to increase 8-10 per cent, driven by higher committed expenditure, and increasing social welfare and public health related expenses which combined come in around 65 per cent of the total revenue expenditure of the states.

The CNX Nifty is currently trading at 20569.90, up by 302.00 points or 1.49% after trading in a range of 20507.75 and 20602.50. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 5.90%, Adani Ports & SEZ up by 4.77%, Coal India up by 3.35%, ICICI Bank up by 2.99% and Mahindra & Mahindra up by 2.96%. On the flip side, Britannia Industries down by 0.65%, Maruti Suzuki down by 0.53% and Dr. Reddy's Lab down by 0.08% were the few losers.

Asian markets are trading mixed; Nikkei 225 slipped 233.93 points or 0.7% to 33,197.58, Hang Seng declined 111.06 points or 0.66% to 16,719.24, Taiwan Weighted lost 6.59 points or 0.04% to 17,431.76 and Shanghai Composite weakened 1.08 points or 0.04% to 3,030.56. On the other hand, Jakarta Composite rose 58.97 points or 0.83% to 7,118.88, Straits Times added 12.69 points or 0.41% to 3,103.00 and KOSPI was up by 6.61 points or 0.26% to 2,511.62.