Domestic markets trade firm in early deals

Indian equity benchmarks made positive start on Thursday despite losses in other global markets. Domestic markets are trading firm with gains of around half a percent each in early deals as traders went for bargain hunting after previous session’s steep fall. Sentiments got a boost as India Ratings and Research upped India’s GDP growth estimate for current fiscal to 6.7 per cent, from 6.2 per cent, citing resilient economy, sustained government capex and prospect of a new private corporate capex cycle. Adding more optimism, Fitch Ratings said the economic growth in Asia Pacific will remain strong in 2024 and GDP is expected to grow by about 5 per cent in India and a host of emerging market countries. In its report titled 'APAC Cross-Sector Outlook 2024', Fitch said the outlooks for the banking sectors in India and Indonesia, as well as APAC emerging markets as a whole, move to improving in 2024, partly reflecting the robust economic backdrop. 

On the global front, most of the Asian markets are trading lower mirroring the broadly negative cues from global markets overnight amid the release of the minutes of the US Fed's latest monetary policy meeting, which indicated uncertainty over near-term interest rate cuts this year.

Back home, sugar industry stocks were in focus as the government notified exports of 8,606 tonnes of raw cane sugar under tariff-rate quota (TRQ) to the US for 2024. The directorate general of foreign trade (DGFT) in a public notice said that this quantity has been notified under the TRQ scheme from October 1, 2023-September 30, 2024. In stock specific development, Bajaj Finance was jumped after its AUM crossed the Rs 3 lakh crore-threshold for the first time in Dec quarter.

The BSE Sensex is currently trading at 71696.01, up by 339.41 points or 0.48% after trading in a range of 71546.60 and 71741.49. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.86%, while Small cap index was up by 0.92%.

The top gaining sectoral indices on the BSE were Realty up by 3.40%, Utilities up by 1.94%, Power up by 1.46%, PSU up by 0.90% and Telecom up by 0.88%, while TECK down by 0.14% and IT down by 0.10% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.35%, NTPC up by 3.84%, Bajaj Finserv up by 2.28%, Power Grid up by 1.62% and Tata Motors up by 1.53%. On the flip side, HCL Technologies down by 0.81%, Tata Steel down by 0.74%, Tech Mahindra down by 0.72%, TCS down by 0.68% and Maruti Suzuki down by 0.65% were the top losers.

Meanwhile, citing resilient economy, sustained government capex and prospect of a new private corporate capex cycle, India Ratings and Research (Ind-Ra) has revised up India’s Gross Domestic Product (GDP) growth estimate for current fiscal (FY24) to 6.7 per cent, from earlier 6.2 per cent. It flagged weak global growth and trade as risks which weighed down the growth estimates, besides volatile geopolitical situation. It said ‘All these risks will continue to weigh on and restrict India's GDP growth to 6.7 per cent in FY24. The quarterly GDP growth, which came in at 7.8 per cent YoY and 7.6 per cent YoY in 1QFY24 and 2QFY24 respectively, is slated to slow down sequentially in the remaining two quarters of FY24’.

It said the revision in growth forecast has been led by a number of factors -- the resilience of the Indian economy; sustained government capex; deleveraged balance sheet of corporates/banking sector; prospect of a new private corporate capex cycle; and sustained momentum in business and software services exports, coupled with remittances from the rest of the world. Highlighting that consumption demand is not broad based, Ind-Ra said wage growth is critical for consumption growth. Ind-Ra's calculation shows that a 1 per cent increase in real wages could lead to a 1.12 per cent increase in the real private final consumption expenditure (PFCE) and the multiplier effect of this could result in a 64 basis point increase in the GDP growth. However, the data shows that the real wage growth of households belonging to the lower income bracket was marginally negative in second quarter (July-September) of current fiscal. On the other hand, the real wage growth of households belonging to the upper income bracket grew 6.4 per cent YoY in the second quarter of FY24.

The agency expects PFCE, which denotes money spent by individuals on goods and services for personal consumption, to grow 5.2 per cent year on year in current fiscal, as against 7.5 per cent in last fiscal. The PFCE growth which increased to 6 per cent in the first quarter, again declined to 3.1 per cent YoY in second quarter of current fiscal. However, PFCE growth in the second half (October-March) will benefit from the base effect. Last year in October-March period PFCE growth was 2.5 per cent. With regard to inflation, it expects the average retail and wholesale inflation to come in at 5.3 per cent and 0.6 per cent, respectively, in FY24. Ind-Ra believes unless the inflation stabilises around 4 per cent mark, the RBI might not go for monetary easing and therefore remain in the pause mode on the repo rate front in the near term.

The CNX Nifty is currently trading at 21611.55, up by 94.20 points or 0.44% after trading in a range of 21564.55 and 21624.80. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 4.28%, NTPC up by 3.79%, Bajaj Finserv up by 2.27%, Power Grid up by 1.54% and Tata Motors up by 1.52%. On the flip side, BPCL down by 1.63%, Bajaj Auto down by 1.22%, HCL Technologies down by 0.86%, LTIMindtree down by 0.77% and Tata Steel down by 0.74% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 266.37 points or 0.8% to 33,197.80, Hang Seng declined 80.53 points or 0.49% to 16,565.88, Shanghai Composite weakened 25.85 points or 0.88% to 2,941.40, KOSPI lost 25.26 points or 0.98% to 2,582.05, Straits Times fell 20.36 points or 0.64% to 3,179.08 and Taiwan Weighted was down by 18.15 points or 0.1% to 17,541.16, while Jakarta Composite was up by 34.61 points or 0.47% to 7,313.70.