Sensex, Nifty trade higher in early deals on value buying

Indian equity benchmarks made positive start on Wednesday tracking upbeat momentum in global markets ahead of the ongoing two day US Fed's monetary policy meet. Sensex and Nifty are trading higher with decent gains in early deals on account of value buying after previous session’s sell-off. Foreign fund inflows aided domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 1,421.48 crore on March 19, provisional data from the NSE showed. Traders took encouragement as S&P Global Market Intelligence said India’s economy will likely grow 6.8% in FY25, up from 6.5% projected earlier, on the back of stronger growth momentum and improving global prospects. More optimism came in as the government data showed India's net direct tax collection recorded a growth of 19.88 per cent to over Rs 18.90 lakh crore till March 17. However, upside remained capped as the Reserve Bank of India’s data in the March 2024 bulletin showed that the net foreign direct investment (FDI) in India, inflows minus outflows, declined 38.4 per cent year-on-year to $15.41 billion in the first 10 months of this financial year due to an increase in the repatriation of capital. 

On the global front, most of the Asian markets are trading higher with modest gains, following the broadly positive cues from global markets overnight, as traders reacted to monetary policy announcements from the Bank of Japan, People's Bank of China and the Reserve Bank of Australia. They are also cautiously looking ahead to the US Fed's monetary policy decision later in the day. The Japanese stock market is closed for the Vernal Equinox holiday. Back home, beverages industry stocks are in focus as ICRA said the domestic alcohol beverages (alcobev) industry is expected to grow at 8-10 per cent along with an improvement in margins, helped by a moderation of raw materials prices. In stock specific development, Venky's gained on starting operations at Kesurdi unit.

The BSE Sensex is currently trading at 72224.27, up by 212.22 points or 0.29% after trading in a range of 72036.86 and 72268.60. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.17%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Realty up by 0.50%, Auto up by 0.49%, Energy up by 0.38%, TECK up by 0.36% and IT up by 0.33%, while Metal down by 0.69%, Basic Materials down by 0.51%, Consumer Durables down by 0.42%, Capital Goods down by 0.25% and Healthcare down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.29%, Nestle up by 1.38%, Power Grid up by 1.20%, Indusind Bank up by 1.06% and Bajaj Finance up by 1.02%. On the flip side, Tata Steel down by 1.45%, Tata Motors down by 1.05%, JSW Steel down by 0.81%, Hindustan Unilever down by 0.67% and Sun Pharma down by 0.46% were the top losers.

Meanwhile, an article on the ‘State of Economy’ published in the Reserve Bank of India’s (RBI) March Bulletin showed that India can sustain 8 per cent annual GDP growth and the conducive macroeconomic configuration may become a launching pad for a step-up in the country’s growth trajectory. Over the period 2021-24, gross domestic product (GDP) growth has averaged above 8 per cent. An article authored by a team led by RBI Deputy Governor Michael Debabrata Patra said the global economy is losing steam, with growth slowing in some of the most resilient economies and high frequency indicators, pointing to further levelling in the period ahead. 

In India, real GDP growth was at a six-quarter high in the October-December period of 2023-24, powered by strong momentum, robust indirect taxes, and lower subsidies. The high visibility of structural demand and healthier corporate and bank balance sheets will likely be the galvanising forces for growth going forward. It said ‘The world is confronted with large shifts in structure and sentiments, which are either underway or impending’. The article noted that the outlook is shrouded with layers of uncertainty, exacerbated by geopolitical and extreme weather risks as well as fragmenting forces. By contrast, it said the Indian economy is experiencing a conducive macroeconomic configuration that can be its launching pad for a step-up in its growth trajectory.

According to the article, balance sheets in the financial sector are sound and healthy, providing the wherewithal for intermediating the productive credit needs of a resurgent economy. It said ‘Financial markets are reflecting these favourable formations. Capital inflows have resumed strongly as investor interest floods back into India’. It further said technology is offering new growth opportunities to seize by becoming more competitive and efficient. It added ‘The time has come to build world class infrastructure, strong manufacturing bases, a high-quality labour force and global leadership in services to convert these favourable factors into opportunities and strengths over the next few decades’. It also noted that the demand outlook for premium consumer businesses is robust and the growth rhythm is expected to persist into the medium-term.

The CNX Nifty is currently trading at 21868.65, up by 51.20 points or 0.23% after trading in a range of 21831.35 and 21891.70. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 4.15%, Maruti Suzuki up by 2.50%, BPCL up by 1.59%, Nestle up by 1.52% and Bajaj Auto up by 1.29%. On the flip side, Hindalco down by 2.22%, UPL down by 1.74%, Dr. Reddy's Lab down by 1.60%, Tata Steel down by 1.51% and Tata Motors down by 1.19% were the top losers.

Asian markets are trading mostly in green; KOSPI rose 33.46 points or 1.26% to 2,689.63, Hang Seng advanced 30.29 points or 0.18% to 16,559.77, Taiwan Weighted gained 16.65 points or 0.08% to 19,873.85, Shanghai Composite strengthened 13.91 points or 0.45% to 3,076.67 and Straits Times added 7.95 points or 0.25% to 3,181.50, while Jakarta Composite was down by 20.60 points or 0.28% to 7,316.15.