Benchmarks make negative start on the first day of New Year

Indian equity benchmarks started the Monday’s trading session on a negative note as countries around the world celebrate the start of 2024. Trading volumes are thin due to holidays in the U.S., most of Europe and Asia. Markets are trading lower with marginal cut in early deal, while broader indices -- BSE Mid & small cap – are outperforming larger peers with gains of over half a percent each. Some cautiousness came in as the output of eight key infrastructure industries - known as the core sector - slowed to a six-month low of 7.8 per cent in November on the back of a high base and festival holidays. Besides, data released by the Controller General of Accounts showed that the central government's fiscal deficit widened to Rs 9.07 lakh crore in April-November from Rs 8.04 lakh crore in April-October. 

However, downside remained limited as the finance ministry expects the Indian economy's GDP growth rate in 2023-24 to comfortably exceed its forecast of 6.5 percent following the blockbuster data for July-September. It added that despite declining in H1 of the current fiscal, FDI inflows to India are expected to rebound on account of strong macroeconomic fundamentals, favourable business environment and rising growth, in the coming months. 

On the sectoral front, auto stocks are in focus, on declaring their monthly sales number for December. In stock specific development, BHEL surged on reports it has won a Rs 19,422-crore turnkey contract for a thermal power plant from NLC India at Talabira, Odisha.

The BSE Sensex is currently trading at 72151.95, down by 88.31 points or 0.12% after trading in a range of 72032.97 and 72222.72. There were 12 stocks advancing against 18 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 0.69%.

The top gaining sectoral indices on the BSE were Telecom up by 1.78%, Energy up by 1.02%, Oil & Gas up by 0.98%, PSU up by 0.84% and Metal up by 0.58%, while Bankex down by 0.15%, TECK down by 0.03% and IT down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.63%, Nestle up by 0.79%, Indusind Bank up by 0.51%, SBI up by 0.48% and ITC up by 0.47%. On the flip side, Mahindra & Mahindra down by 0.87%, NTPC down by 0.74%, Hindustan Unilever down by 0.63%, Bharti Airtel down by 0.60% and HDFC Bank down by 0.55% were the top losers.

Meanwhile, the Finance Ministry in its latest half-yearly economic review report has executed confidence that Indian economy's GDP growth rate in 2023-24 to ‘comfortably’ exceed its forecast of 6.5 percent despite the risks to growth and stability outlook that mainly emanate from outside the country. The better-than-expected growth in Q2 of 2023-24 and the emergence of India as the fastest-growing major economy in H1 of FY24 have improved the growth prospects and prompted various domestic and international agencies to upgrade GDP growth projections for FY24. The momentum gained in Q2 of FY24 is likely to be sustained in Q3 as well.

High frequency indicators in India for October and November 2023 reflect robust economic activity. PMI Manufacturing and Services remained in the expansionary zone in October and November. October 2023 imprints of the IIP and Index of Eight Core Industries also highlight sustained growth in manufacturing activity, the report points out. Sentiments in the services sector remain upbeat, driven, among others, by an upswing in the tourism cum hotel industry induced by leisure travel, business travel, and social events. Growth in consumption demand is expected to be sustained. Urban demand conditions remain resilient, with higher growth in auto sales, fuel consumption and UPI transactions. Rural demand is also catching up, as reflected in robust growth in two and three-wheeler sales.

On the inflation front, with the stable downward movement in core inflation and continuing deflation in fuel inflation, the headline inflation outlook is on a declining trend, notwithstanding temporary disruptions from food prices. RBI has projected inflation to average at 5.4 per cent in FY24. The outlook for India's external sector is promising, as seen in the November releases of trade balances for both services and merchandise. The relatively stable Indian rupee against the US dollar and other prominent currencies and adequate foreign exchange reserves add to the optimism. Foreign investment inflows are also helping the Indian stock market indices to climb new heights, reflecting broad-based optimism on growth among domestic and foreign investors on growth prospects.

The CNX Nifty is currently trading at 21720.45, down by 10.95 points or 0.05% after trading in a range of 21684.05 and 21737.35. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.45%, Tata Motors up by 1.71%, Grasim Industries up by 1.63%, UPL up by 1.56% and BPCL up by 0.89%. On the flip side, Eicher Motors down by 1.68%, Mahindra & Mahindra down by 1.04%, NTPC down by 0.72%, Bharti Airtel down by 0.65% and Hindustan Unilever down by 0.62% were the top losers.