Markets turn volatile after positive start on Tuesday

Indian equity benchmarks extended previous session’s rally with positive start on Tuesday tracking strong gains overnight on Wall Street. Soon, markets turned volatile and are trading tad lower in early deals amid mixed cues from Asian counterparts with investors looking ahead to the upcoming monetary policy meetings of several central banks, and some key economic data, for clues about the likely timing of interest rate cuts. Downside remained capped amid foreign fund inflows. Foreign institutional investors (FIIs) turned net buyers in the cash segment after selling in the previous seven days, buying shares worth Rs 110.01 crore on January 29, provisional data from the NSE showed. 

Though, broader indices -- BSE Mid & Small cap indies are outperforming larger pees with decent gains. Traders took some encouragement as the finance ministry said India is expected to become the third-largest economy in the world with a GDP of $5 trillion in the next three years and touch $7 trillion by 2030 on the back of continued reforms. 

On the sectoral front, telecom stocks are in focus with report that Bharti Airtel added the maximum number of 4G/5G subscribers in November with 3.98 million users joining its network, followed by Reliance Jio with 3.45 million. In stock specific development, KEC International traded higher on securing orders worth Rs 1304 crore.

The BSE Sensex is currently trading at 71883.29, down by 58.28 points or 0.08% after trading in a range of 71748.67 and 72142.23. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.26%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.11%, TECK up by 0.87%, IT up by 0.74%, Metal up by 0.74% and Realty up by 0.72%, while Power down by 0.22%, Consumer Durables down by 0.21%, Bankex down by 0.17%, Utilities down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.59%, JSW Steel up by 1.34%, Tata Steel up by 1.22%, Infosys up by 1.15% and Wipro up by 1.15%. On the flip side, Bajaj Finance down by 3.76%, Bajaj Finserv down by 1.34%, ITC down by 0.80%, Ultratech Cement down by 0.80% and ICICI Bank down by 0.65% were the top losers.

Meanwhile, with the help of continued reforms, the Finance Ministry in its January 2024 review of the economy said India is expected to become the third-largest economy in the world with a GDP of $5 trillion in the next three years and touch $7 trillion by 2030. Ten years ago, India was the 10th largest economy in the world, with a GDP of $1.9 trillion at current market prices. Today, it is the 5th largest with a GDP of $3.7 trillion (estimate FY24), despite the pandemic and despite inheriting an economy with macro imbalances and a broken financial sector.

It noted ‘This ten-year journey is marked by several reforms, both substantive and incremental, which have significantly contributed to the country’s economic progress’. It added these reforms have also delivered an economic resilience that the country will need to deal with unanticipated global shocks in the future. It further said that in the next three years, India is expected to become the third-largest economy in the world, with a GDP of $5 trillion. However, ‘The government has set a higher goal of becoming a ‘developed country’ by 2047. With the journey of reforms continuing, this goal is achievable.’

The Nirmala Sitharaman-headed ministry stressed that the reforms will be more purposeful and fruitful with full participation of state governments. The participation of states will be fuller when reforms encompass changes in governance at the district, block, and village levels, making them citizen-friendly and small business-friendly and in areas such as health, education, land and labour, in which states have a big role to play. It said ‘the strength of the domestic demand has driven the economy to a 7 per cent plus growth rate in the last three years…in FY25, real GDP growth will likely be closer to 7 per cent’, and added there is, however, considerable scope for the growth rate to rise well above 7 per cent by 2030.

The review observed that it is eminently possible for the Indian economy to grow in the coming years at a rate above 7 per cent on the strength of the financial sector and other recent and future structural reforms. Only the elevated risk of geopolitical conflicts is an area of concern. Furthermore, under a reasonable set of assumptions with respect to the inflation differentials and the exchange rate, India can aspire to become a $7 trillion economy in the next six to seven years (by 2030).

The CNX Nifty is currently trading at 21723.45, down by 14.15 points or 0.07% after trading in a range of 21689.10 and 21813.05. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.94%, Hindustan Unilever up by 1.72%, Hindalco up by 1.71%, ONGC up by 1.27% and JSW Steel up by 1.24%. On the flip side, Bajaj Finance down by 3.61%, Bajaj Finserv down by 1.27%, Coal India down by 1.10%, Ultratech Cement down by 1.05% and HDFC Life Insurance down by 1.03% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 157.18 points or 0.43% to 36,184.12, Jakarta Composite gained 19.42 points or 0.27% to 7,176.60, Straits Times rose 9.78 points or 0.31% to 3,150.09 and KOSPI increased 1.16 points or 0.05% to 2,501.81. On the other hand, Hang Seng declined 313.11 points or 1.99% to 15,764.13, Taiwan Weighted lost 39.46 points or 0.22% to 18,080.17 and Shanghai Composite was down by 17.76 points or 0.62% to 2,865.60.