Domestic indices make optimistic start amid foreign fund inflows

Indian equity benchmarks extended their previous session’s gains with optimistic start on Friday amid overnight fall in crude oil prices. Markets are trading higher with decent gains in early deals amid foreign fund inflows. Provisional data from the NSE showed foreign institutional investors (FIIs) bought shares worth Rs 1,513.41 crore on January 4. Some support came in with a private report that India is likely to project higher economic growth estimates of around 7% for the 2023/24 fiscal year ending in March, compared with earlier government forecasts when the National Statistical Office releases its first advance GDP estimates on Friday. However, gains were limited amid a private report that the JN.1 subvariant has become the dominant Covid-19 variant in India, accounting for more than 60% of the coronavirus cases in the country. As of Thursday, 511 cases of the subvariant JN.1 have been reported across the country. India recorded 760 new Covid-19 cases and two deaths, while the active caseload saw a slight dip to 4,423 from 4,440 on the previous day.

On the global front, Asian markets are trading mixed as traders remain cautious amid renewed uncertainty about the outlook for interest rates following the release of the minutes of the US Fed's latest monetary policy meeting earlier in the week. They now look ahead of the closely watched monthly US jobs report for further cues.

Back home, pharma stocks are in focus as credit rating agency ICRA expects the revenues of a sample set of 25 Indian pharmaceutical companies which account for 60% of the overall revenues of the Indian pharmaceutical industry to expand by 9-11% in FY24, compared to 10% over previous year. In stock specific development, Lodha surged on reporting its best ever Q3 pre-sales of Rs 3,410 crore, up 12 per cent year-on-year.  

The BSE Sensex is currently trading at 72079.10, up by 231.53 points or 0.32% after trading in a range of 71996.98 and 72156.48. There were 20 stocks advancing against 10 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 0.80%.

The top gaining sectoral indices on the BSE were Realty up by 2.25%, IT up by 1.44%, TECK up by 1.30%, Telecom up by 0.97% and Power up by 0.91%, while Healthcare down by 0.25% was the sole losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.09%, Tech Mahindra up by 1.68%, Infosys up by 1.68%, TCS up by 1.27% and NTPC up by 1.18%. On the flip side, Nestle down by 1.93%, Sun Pharma down by 1.52%, HDFC Bank down by 0.59%, Indusind Bank down by 0.51% and Tata Steel down by 0.30% were the top losers.

Meanwhile, the government is likely to review the progress of the Production-Linked Incentive Scheme (PLI) for all 14 sectors at the meeting to be held on January 12. It said some PLI sectors are doing very well, others are in gestation period, and there are some which are lagging a bit, it expects to see a take-off very soon. The meeting assumes significance as the government has disbursed Rs 2,900 crore till March 2023 under the scheme. The empowered committee in PLI has also approved Rs 1,000 crore disbursement to beneficiary firms of the electronics sector.

The scheme was announced in 2021 for 14 sectors such as telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma with an outlay of Rs 1.97 lakh crore. The purpose of the schemes is to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive.

The schemes have attracted over Rs 95,000 crore in investment till September 2023. According to the Commerce and Industry Ministry, 746 applications have been approved till November 2023 under these schemes. As per the ministry, of the $101 billion of total electronics production in 2022-23, smartphones constituted $44 billion. 

About PLI in white goods (AC and LED light components), the ministry has said that 64 companies have been selected under the scheme. Of this, 34 would invest Rs 5,429 crore for air-conditioner components and 30 would invest Rs 1,337 crore for LED component manufacturing. Further investments of Rs 6,766 crore are envisaged creating additional direct employment of about 48,000 persons and that 13 foreign companies are investing Rs 2,090 crore under the scheme.

The CNX Nifty is currently trading at 21727.60, up by 69.00 points or 0.32% after trading in a range of 21698.20 and 21749.60. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 2.44%, LTIMindtree up by 2.24%, Wipro up by 2.23%, Tech Mahindra up by 1.68% and Infosys up by 1.66%. On the flip side, Nestle down by 2.05%, Sun Pharma down by 1.53%, Cipla down by 0.79%, Britannia Industries down by 0.68% and ONGC down by 0.65% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 234.84 points or 0.7% to 33,523.13, Straits Times rose 15.37 points or 0.48% to 3,189.38 and Jakarta Composite was up by 11.53 points or 0.16% to 7,371.29. On the other hand, Hang Seng declined 9.58 points or 0.06% to 16,636.40, Shanghai Composite lost 3.74 points or 0.13% to 2,950.61, KOSPI fell 0.73 points or 0.03% to 2,586.29 and Taiwan Weighted was down by 0.05 points to 17,549.60.