Domestic indices trade with traction on value buying

Indian equity benchmarks extended previous session’s rally with positive start on Wednesday tracking firm global cues. Soon, markets gained traction and are trading with over half a percent gain in early deals as traders went for value buying. Sentiments got a boost as the Reserve Bank of India said India's current account deficit narrowed in the July-September quarter largely due to a lower merchandise trade deficit while services exports also grew. The current account deficit stood at $8.3 billion, or 1% of GDP, in the second quarter of fiscal 2023-24 as compared to $9.2 billion or 1.1% of GDP in the preceding quarter. Traders took note of report that the negotiations for the proposed free trade agreement (FTA) between India and Oman are moving at a fast pace and the pact is likely to be signed next month.

Most of the Asian markets are trading higher following the broadly positive cues from Wall Street overnight, amid optimism about the outlook for interest rates following last week's tamer-than-expected US consumer price inflation data. Some traders also kept on the sidelines ahead of a relatively quiet last week of the year. Back home, Happy Forgings, Credo Brands Marketing (Mufti Menswear) and RBZ Jewellers are slated to debut on the exchanges today. In stock specific development, Adani Green Energy traded higher after it completed the transfer of 1,050 MW renewable portfolio to a JV between AGEL and TotalEnergies for $300 million.

The BSE Sensex is currently trading at 71695.45, up by 358.65 points or 0.50% after trading in a range of 71473.65 and 71728.78. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.61%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.06%, Capital Goods up by 0.96%, Metal up by 0.94%, Industrials up by 0.89%, Realty up by 0.67%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Ultratech Cement up by 3.04%, JSW Steel up by 2.13%, Bajaj Finance up by 1.82%, Larsen & Toubro up by 1.46% and Tata Motors up by 1.22%. On the flip side, Asian Paints down by 0.29%, NTPC down by 0.19%, Maruti Suzuki down by 0.19% and Titan down by 0.08% were the few losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that there is a possibility of a fiscal slippage in FY24 because of higher spends on employment guarantee scheme and subsidies. It noted the fiscal deficit for FY24 will come at 6 per cent, as against the budgetary target of 5.9 per cent. It said ‘Higher-than-budgeted revenue expenditure triggered through the first and likely second supplementary demand for grants in combination with lower-than-budgeted nominal GDP will push the fiscal deficit’. It said the fiscal slippage will happen despite higher tax and non-tax revenue collections, and also added that these will be more than sufficient to offset the lower-than-budgeted divestment proceeds.

Giving out details of the overruns, it said in the first supplementary demand, the union government will spend more on prioritised areas/sectors such as food, fertiliser and LPG subsidy and Mahatma Gandhi National Rural Employment Guarantee Scheme. As against the budgeted nutrient-based fertiliser subsidy of Rs 44,000 crore, the union government has now increased the fertiliser subsidy to Rs 57,360 crore, as the budgeted amount was almost over by end-October 2023. Similarly, realising the sustained demand for employment under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), whereby a sum of Rs 79,770 crore has already been spent till December 19, 2023, as against the budgeted Rs 60,000 crore, an additional sum of Rs 14,520 crore has been allocated through the first supplementary demand for grants.

The agency expects tax revenue collections growth to exceed the budgeted projection at 11.7 per cent in FY24 due to the widening of tax base, better enforcement of compliance and use of technology in the tax collection process, and added that the amount collected in the April-October period is nearly 60 per cent of the budget estimate. On the expenditure front, the agency said the first supplementary demand for grants involving an additional cash outgo of Rs 58,380 crore will result in the revenue expenditure to grow at 2.8 per cent, as against the budgeted target of 1.2 per cent. The agency said it believes the government will make a second supplementary demand for grants, as a result of which the revenue expenditure is expected to increase to Rs 37.1 lakh crore in FY24, which is Rs 2.0 lakh crore higher than the budgeted amount.

The CNX Nifty is currently trading at 21554.20, up by 112.85 points or 0.53% after trading in a range of 21495.80 and 21562.10. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 3.16%, JSW Steel up by 2.04%, Bajaj Finance up by 1.80%, Hindalco up by 1.72% and Bajaj Auto up by 1.56%. On the flip side, Britannia down by 0.76%, Asian Paints down by 0.35%, Adani Enterprises down by 0.34%, NTPC down by 0.21% and Maruti Suzuki down by 0.20% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 396.78 points or 1.19% to 33,702.63, Hang Seng advanced 249.82 points or 1.53% to 16,590.23, Taiwan Weighted added 116.87 points or 0.66% to 17,868.60, Jakarta Composite gained 45.7 points or 0.63% to 7,283.22, Straits Times rose 12.93 points or 0.41% to 3,152.91 and Shanghai Composite was up by 12.82 points or 0.44% to 2,911.70, while KOSPI was down by 1.43 points or 0.05% to 2,601.16.