Sensex, Nifty hold gains in early noon deals

A heavy buying in TECK, IT and Telecom stocks helped Indian equity markets to hold notable gains during early afternoon deals, despite mixed cues from other Asian markets. Some support also came in, as according to data from the Central Depository Service and National Securities Depository, the number of demat accounts opened in January totalled over 46.84 lakh, compared to 40.94 lakh a month ago and 21.90 lakh a year ago. The total demat tally crossed 14.39 crore, up 3.4 percent from a month ago and 30.3 percent from a year ago. The street took a note of a private report stating that hiring activity saw a 5 per cent decline in January, while sequentially it was up 3 per cent. The sequential increase was largely due to an improvement in demand for skilled talent in the tourism, telecom, and Banking, Financial Services and Insurance (BFSI) industries.

On the global front, Asian markets were trading mixed, after the average of household spending in Japan was down 2.5 percent on year in December, coming in at 329,518 yen. That missed expectations for a drop of 2.0 percent following the 2.9 percent decline in November. On a monthly basis, household spending sank 0.9 percent - again missing forecasts for an increase of 0.2 percent following the 1.0 percent decline in the previous month.

The BSE Sensex is currently trading at 72102.20, up by 370.78 points or 0.52% after trading in a range of 71625.18 and 72142.08. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged by 0.53%, while Small cap index was up by 0.98%.

The top gaining sectoral indices on the BSE were TECK up by 2.46%, IT up by 2.39%, Telecom up by 2.12%, Oil & Gas up by 1.67% and Healthcare up by 1.19%, while Power down by 0.56%, Metal down by 0.48%, PSU down by 0.46%, Utilities down by 0.45% and Bankex down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.67%, TCS up by 3.38%, Bharti Airtel up by 3.07%, HCL Tech. up by 2.84% and Maruti Suzuki up by 2.83%. On the flip side, Power Grid down by 3.48%, Indusind Bank down by 1.44%, NTPC down by 1.32%, ITC down by 1.32% and Bajaj Finserv down by 1.11% were the top losers.

Meanwhile, Fitch Ratings has said that India's interim Budget presented last week pointed to a slightly faster pace of consolidation in the next two fiscal years than was previously expected, and it reinforced its commitments to raise capital investment. The targets are broadly in line with Fitch's assumptions when they affirmed India's rating at 'BBB-' with a 'Stable' outlook in January. As such, they are unlikely to lead to significant changes in the sovereign's credit profile, although this modestly reduces near-term risks to the fiscal trajectory and signals the government's commitment to its fiscal consolidation plans. The Budget is an interim one, as elections are due in April-May 2024 and the incoming government will provide further clarification of its fiscal plans once it has taken office.

The rating agency said ‘Pre-election budgets tend to contain limited policy announcements, but budget deficit targets are typically carried through to the post-election budget when the incumbent government returns to office, as we believe is likely this year’. The government's decision to lower its deficit target for the fiscal year ending March 2024 to 5.8 per cent of GDP, from 5.9 per cent, is a modest change. However, it said ‘we believe it signals a reduced risk that the process of fiscal consolidation could be set back by a pre-election spending surge. In addition, the deficit target of 5.1 per cent of GDP in FY25 would keep the government on track to reach its medium-term goal of narrowing the deficit to 4.5 per cent of GDP in FY26.’ 

The continued emphasis on capex investment, with a further 11 per cent spending increase, should remain supportive of the growth outlook in 2024-25, when real GDP growth is expected at 6.5 per cent. It further said ‘Strong capex should - if implemented as planned - reduce infrastructure bottlenecks and improve medium-term growth potential. We believe India is well-placed to sustain higher rates of growth in the medium term relative to many of its peers, with the capex drive helping to underpin this view.’ Fitch thinks that it will be challenging for the government to achieve its 2025-26 deficit target.

The CNX Nifty is currently trading at 21901.30, up by 129.60 points or 0.60% after trading in a range of 21737.55 and 21905.25. There were 28 stocks advancing against 21 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were HDFC Life Insurance up by 4.05%, Wipro up by 3.63%, TCS up by 3.32%, BPCL up by 3.31% and Bharti Airtel up by 3.13%. On the flip side, Power Grid down by 3.52%, ITC down by 1.37%, Indusind Bank down by 1.37%, NTPC down by 1.23% and Britannia down by 1.18% were the top losers.

Asian markets were trading mixed; Hang Seng advanced 601.4 points or 3.88% to 16,111.41, Jakarta Composite gained 34.89 points or 0.48% to 7,233.51 and Shanghai Composite strengthened 77.17 points or 2.86% to 2,779.36, while Straits Times fell 5.82 points or 0.19% to 3,128.47, KOSPI dropped 15.11 points or 0.59% to 2,576.20 and Nikkei 225 slipped 193.5 points or 0.54% to 36,160.66.