Sensex, Nifty trade firm in early deals

Indian equity benchmarks made optimistic start on Friday tracking gains in Asian counterparts, as weaker U.S. growth data sent the dollar and bond yields tumbling and revived hopes for rate cuts by the Federal Reserve later this year. Sensex and Nifty are trading firm in early deals with gains around half a percent each on account of value buying after two sessions of consecutive selling. Sentiments got boost as the Reserve Bank of India (RBI), in its annual report, projected Indian economy to grow at 7 percent in the current financial year with risks evenly balanced. Further, the report said India' GDP has expanded at a robust pace in 2023-24, with real GDP growth accelerating to 7.6 percent from 7 percent in the previous year - the third successive year of 7 percent or above growth. Some support also came with report that the southwest monsoon set in over the Kerala coast and parts of the Northeast earlier than the forecast, marking the start of its four-month journey over India. An early and timely onset of monsoon is also a good sign for 2024 kharif crop production. Investors are looking for the the release of Q4FY24 GDP data later in the day for more directional cues. Also, market participants are eyeing the release of exit polls tomorrow. 

On the sectoral front, electric-vehicle related stocks are in focus after the NSE launched a new thematic index called Nifty EV & New Age Automotive index. The 33-stock index will track the performance of companies which form a part of the electric vehicle (EV) ecosystem, and led by stocks such as Bajaj Auto, Tata Motors, Mahindra & Mahindra and Maruti Suzuki. In stock specific development, Bharat Rasayan surged post Q4 numbers.

The BSE Sensex is currently trading at 74304.25, up by 418.65 points or 0.57% after trading in a range of 74109.26 and 74478.89. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.10%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Realty up by 1.58%, Utilities up by 0.96%, Consumer Durables up by 0.83%, Capital Goods up by 0.83% and Auto up by 0.63%, while IT down by 0.44%, TECK down by 0.40%, PSU down by 0.18% and Healthcare down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.75%, Mahindra & Mahindra up by 2.06%, Ultratech Cement up by 1.57%, Bajaj Finance up by 1.35% and Titan Company up by 1.18%. On the flip side, Infosys down by 1.44%, Kotak Mahindra Bank down by 0.41%, Bharti Airtel down by 0.39%, TCS down by 0.31% and HCL Technologies down by 0.13% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) said in its latest annual report has said that Indian economy is projected to grow at 7 per cent with risks evenly balanced -- the fastest among major economies across the world -- in the current fiscal year (FY25), underpinned by a sustained strengthening of macroeconomic fundamentals. While the central bank expected headline inflation to moderate further, it flagged risks to food inflation saying that it remains vulnerable to supply-side shocks. It said the Indian economy expanded at a robust pace in 2023-24 (April 2023 to March 2024 financial year), with real GDP growth accelerating to 7.6 per cent from 7.0 per cent in the previous year -- the third consecutive year of 7 per cent or above growth pace. The economy showed resilience in FY24 (2023-24 fiscal) despite persistent headwinds.

It said the GDP growth is robust on the back of solid investment demand which is supported by healthy balance sheets of banks and corporates, the government's focus on capital expenditure and prudent monetary, regulatory and fiscal policies, and added that the Indian economy is navigating the drag from an adverse global macroeconomic and financial environment. Also, MSPs for both kharif and rabi seasons 2023-24 ensured a minimum return of 50 per cent over cost of production for all crops. It noted that Indian economy is well-placed to step up growth trajectory over the next decade in an environment of macroeconomic and financial stability. It highlighted that as headline inflation eases towards the target, it will spur consumption demand especially in rural areas. It further said the external sector's strength and buffers in the form of foreign exchange reserves will insulate domestic economic activity from global spillovers.

However, the report added that geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price movements and erratic weather developments pose downside risks to the growth outlook and upside risks to the inflation outlook. According to RBI, the external sector's strength and buffers through foreign exchange reserves will insulate the local economic activity from global spillovers. The RBI also emphasised that the Indian economy would have to navigate challenges posed by rapid adoption of AI/ML (artificial intelligence/machine learning) technologies as well as recurrent climate shocks.

The CNX Nifty is currently trading at 22593.20, up by 104.55 points or 0.46% after trading in a range of 22557.70 and 22653.75. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 2.75%, Larsen & Toubro up by 2.75%, Mahindra & Mahindra up by 1.86%, Ultratech Cement up by 1.55% and Bajaj Finance up by 1.46%. On the flip side, Infosys down by 1.50%, LTIMindtree down by 1.20%, ONGC down by 0.67%, Tata Consumer Products down by 0.63% and BPCL down by 0.58% were the top losers.

Asian Markets are trading mostly in green; Nikkei 225 surged 328.52 points or 0.86% to 38,382.65, Hang Seng rose 172.00 points or 0.94% to 18,402.19, Taiwan Weighted advanced 31.94 points or 0.15% to 21,396.42, Straits Times gained 7.83 points or 0.24% to 3,331.21, KOSPI added 9.90 points or 0.38% to 2,645.34 and Shanghai Composite was up by 8.31 points or 0.27% to 3,099.99, while Jakarta Composite was down by 48.58 points or 0.69% to 6,985.56.