Domestic indices trade firm in early deals on strong global cues

Indian equity benchmarks made optimistic start on Thursday tracking broadly positive cues from global peers. Overnight in the US, the Fed kept its interest rates unchanged and stuck on its promise of three rate cuts in the current calendar year. Domestic indices are trading firm with notable gains of over 0.70% each in early deals on account of value buying. Broader indices -- BSE mid & small cap are outperforming larger peers with gains of one and half a percent each. Some support came in after CareEdge Ratings said India’s economic activity likely hit a nine-month high in February, despite rural demand remaining weak and unemployment rising, thanks to a sharp expansion in exports, imports and corporate bond issuances. The CareEdge Economic Meter, a composite index covering 18 high-frequency economic indicators to track the state of the economy, suggested a 10.3% year-on-year uptick in activity levels. Traders took note of India's executive director at International Monetary Fund (IMF) Krishnamurthy Venkata Subramanian’s statement that India needs to grow at 8 per cent on sustained basis to create sufficient jobs to reduce poverty and inequality.  

On the global front, most of the Asian markets are trading higher following the broadly positive cues from Wall Street overnight, after the US Fed left interest rates unchanged and reiterated expectations for three quarter point interest rate cuts later this year, which had been in some doubt. Traders also reacted to a couple of domestic economic data each from Australia and Japan. The Australian economy added 116,500 jobs last month, blowing away forecasts for an increase of 39,700 jobs following the addition of 500 jobs in the previous month. Meanwhile, the manufacturing sector in Japan continued to contract in March, albeit at a slower pace, the latest survey from Jibun Bank revealed with a manufacturing PMI score of 48.2.

Back home, Metal stocks are in focus with a private report that Indian sponge iron producers have urged the government to impose duties on exports of low-grade iron ore to stave off shortages of the main raw material in the world's second-biggest crude steel producer. In stock specific development, RVNL traded higher on emerging lowest bidder for a railway project.

The BSE Sensex is currently trading at 72622.96, up by 521.27 points or 0.72% after trading in a range of 72507.36 and 72710.39. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.55%, while Small cap index was up by 1.65%.

The top gaining sectoral indices on the BSE were Metal up by 2.35%, PSU up by 2.29%, Power up by 2.15%, Industrials up by 2.06%, Capital Goods up by 2.03%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 2.68%, NTPC up by 2.52%, Power Grid up by 2.19%, Indusind Bank up by 2.19% and JSW Steel up by 2.17%. On the flip side, Maruti Suzuki down by 0.45%, Nestle down by 0.33%, Sun Pharma down by 0.21% and Hindustan Unilever down by 0.07% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, India’s executive director at International Monetary Fund (IMF) Krishnamurthy Venkata Subramanian has said that the country needs to grow at 8 per cent on sustained basis to create sufficient jobs to reduce poverty and inequality. He said ‘We should be impatient even if we grow at 7 per cent. We should be looking to grow at 8 per cent and above, as the country needs to create a lot of infrastructure’. He added ‘By growing at 8 per cent, we have the potential to create a lot of jobs, thereby reducing poverty and inequality’.

India’s economy grew by better-than-expected 8.4 per cent in the final three months (October-December) of 2023 - the fastest pace in one-and-half years.  according to the data released by the National Statistical Office (NSO), the growth rate in October-December was higher than the growth rate of 7.6 per cent in the previous three years, and it helped take the estimate for the current fiscal (April 2023 to March 2024) to 7.6 per cent. The Reserve Bank has projected GDP growth for the next financial year at 7 per cent on the back of improved household consumption and upturn in the private capex cycle. 

He further said India has copied the western model by aiming to bring down the fiscal deficit to 3 per cent and debt-to-GDP ratio below 66 per cent, which may not be relevant in the Indian context. He noted that the size of India’s platform economy is the third largest in the world, after the US and Europe. Observing that Fiscal Responsibility and Budget Management (FRBM) framework had recommended that the government should aim to bring down debt-to-GDP ratio below 66 per cent and fiscal deficit target at 3 per cent, he enquired from where these numbers came from. 

These numbers, he added, came from the Maastricht Treaty (Netherlands), which was signed in December 1991, to create a political union in Europe, to synchronize fiscal policy to enable a monetary union among the European nations. He said ‘I am sure all of us recognise that the state at which the Indian economy is, very very different from the US or the European economy. They have created almost all infrastructure (and) they almost don’t have absolute poverty’. He added that despite so much difference, India has adopted those numbers ‘targeting debt-to-GDP ratio to 66 per cent and fiscal deficit to 3 per cent, without accounting for the important differences’.

The CNX Nifty is currently trading at 22000.55, up by 161.45 points or 0.74% after trading in a range of 21977.00 and 22025.50. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.97%, Hindalco up by 2.92%, Tata Steel up by 2.78%, NTPC up by 2.49% and Coal India up by 2.36%. On the flip side, Apollo Hospital down by 0.60%, Hero MotoCorp down by 0.55%, Maruti Suzuki down by 0.43%, Nestle down by 0.40% and Britannia Industries down by 0.37% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 684.19 points or 1.71% to 40,687.79, Taiwan Weighted jumped 363.90 points or 1.84% to 20,148.35, Hang Seng rose 285.55 points or 1.73% to 16,828.62, KOSPI increased 58.32 points or 2.17% to 2,748.46, Jakarta Composite gained 40.88 points or 0.56% to 7,372.01 and Straits Times was up by 34.89 points or 1.1% to 3,212.37, while Shanghai Composite was down by 6.32 points or 0.21% to 3,073.37.