Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading higher, aided by heavy buying at Utilities and Power counters, despite negative cues from other Asian markets. However, gains were capped as traders got cautious after the services sector growth in India fell to a one-year low in November on softer expansions in new work intakes and output, despite receding price pressures. The seasonally adjusted S&P Global India Services Business Activity Index fell from 58.4 in October to a one-year low of 56.9 in November. Besides, Fitch Ratings said that fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth objectives over longer-term structural initiatives. 

On the global front, Asian markets were trading lower, even as the service sector in China continued to expand in November, and at a faster rate, with a PMI score of 51.5. That's up from 50.4 in October and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex is currently trading at 69127.78, up by 262.66 points or 0.38% after trading in a range of 68954.88 and 69381.31. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.27%, while Small cap index was down by 0.06%.

The top gaining sectoral indices on the BSE were Utilities up by 3.16%, Power up by 2.90%, Basic Materials up by 1.09%, Consumer Durables up by 0.94% and Bankex up by 0.94%, while Realty down by 1.08%, IT down by 0.95%, TECK down by 0.76%, Telecom down by 0.56% and Industrials down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.15%, ICICI Bank up by 2.07%, SBI up by 1.70%, Titan up by 1.59% and Power Grid up by 1.50%. On the flip side, HCL Tech. down by 1.62%, Infosys down by 1.34%, Indusind Bank down by 1.11%, Hindustan Unilever down by 1.08% and Wipro down by 0.86% were the top losers.

Meanwhile, S&P Global Ratings has said that India will become the world's third largest economy by 2030, as it forecast the nation's GDP growth reaching 7 per cent in 202627 fiscal year. It expects India will be the fastest growing major economy in the next three years. Currently, the country is the fifth largest economy in the world behind the US, China, Germany and Japan.

In its Global Credit Outlook 2024, S&P saw a 6.4 per cent GDP growth in the fiscal year through March 2024 (202324) as compared to 7.2 per cent in the previous financial year. The growth rate will remain at 6.4 per cent in the next fiscal (202425) before climbing to 6.9 per cent in the next and 7 per cent in 202627. 

S&P said 'a paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity. It noted that developing a strong logistics framework will be key in transforming India from a servicesdominated economy into a manufacturingdominant one'. Unlocking the labour market potential will largely depend upon upskilling workers and increasing female participation in the workforce. It said 'success in these two areas will enable India to realize its demographic dividend'. It further said a booming domestic digital market could also fuel expansion in India's highgrowth startup ecosystem during the next decade, especially in financial and consumer technology. In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation. 

The CNX Nifty is currently trading at 20788.10, up by 101.30 points or 0.49% after trading in a range of 20711.15 and 20849.60. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 9.75%, Adani Ports & SEZ up by 8.72%, Mahindra & Mahindra up by 2.18%, ICICI Bank up by 1.98% and Power Grid up by 1.88%. On the flip side, HCL Tech. down by 1.68%, LTIMindtree down by 1.62%, Divi's Lab down by 1.38%, Infosys down by 1.27% and ONGC down by 1.21% were the top losers.

All Asian markets were trading lower; Hang Seng declined 412.73 points or 2.54% to 16,233.32, Taiwan Weighted lost 93.47 points or 0.54% to 17,328.01, Jakarta Composite plunged 25.5 points or 0.36% to 7,068.10, Straits Times fell 11.87 points or 0.39% to 3,072.21, Shanghai Composite weakened 49.99 points or 1.68% to 2,972.92, KOSPI dropped 20.67 points or 0.83% to 2,494.28 and Nikkei 225 slipped 455.45 points or 1.39% to 32,775.82.