Benchmarks extend gains in late morning deals

Indian equity benchmarks extended gains in late morning deals, led by gains in PSU, Power and Industrials stocks. Sentiments remained up-beat with report stating that maintaining consistency in attracting foreign investment inflows, India has received a total foreign direct investment (FDI) inflow of $70.9 billion in the financial year 2023-24. India received the highest FDI of $6 billion in October 2023 followed by $5.9 billion in January 2024. Traders overlooked Fitch Ratings’ statement that the BJP losing its outright majority and relying on allies to form a government could pose challenges for the more ambitious elements of reform agenda like land and labour. Fitch however expected policy continuity to persist despite a slimmer majority. On the sectoral front, power stocks remained in limelight as the government data showed peak power demand bounced back to nearly 241 GW on June 4 after sliding for two straight days from the 245 GW level recorded on the first day of this month. It showed that the peak power demand touched an all-time high of 250 GW on May 31, 2024, breaking the previous record of 243.27 GW in September 2023. On the global front, Asian markets are trading mostly in green as another round of soft US jobs data ramped up bets on the Federal Reserve cutting interest rates this year.

The BSE Sensex is currently trading at 75190.43, up by 808.19 points or 1.09% after trading in a range of 74526.06 and 75206.44. 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 2.62%, while Small cap index was up by 3.20%.

The top gaining sectoral indices on the BSE were PSU up by 5.51%, Power up by 4.52%, Industrials up by 4.46%, Capital Goods up by 4.44% and Realty up by 4.39%, while FMCG down by 0.12% was the lone losing indices on BSE.

The top gainers on the Sensex were SBI up by 5.33%, NTPC up by 4.30%, Larsen & Toubro up by 3.38%, Power Grid Corporation up by 2.85% and HCL Technologies up by 2.50%. On the flip side, Hindustan Unilever down by 2.09%, Nestle down by 1.60%, Sun Pharma down by 1.29% and Asian Paints down by 1.18% were the top losers.

Meanwhile, Moody's Ratings in its latest report has said that the BJP-led National Democratic Alliance's (NDA) slim majority in Lok Sabha may delay more far-reaching economic and fiscal reforms that could impede progress on fiscal consolidation. It also expects policy continuity, especially with regards to budgetary emphasis on infrastructure spending and boosting domestic manufacturing, to support robust economic growth. 

According to the report, India's fiscal outcomes will remain weaker than Baa-rated peers, even as the final budget for the fiscal year ending March 2025 (fiscal 2024-25) to be released in the next few weeks provides some indications of India's fiscal policy over the course of the term of the incoming government through 2029. In fiscal 2023-24, India's real GDP accelerated to 8.2 per cent from 7.0 per cent in the previous year, driven by gains in gross fixed capital formation as the government's infrastructure programme gained further traction even as private consumption remained subdued. It said ‘our assessment of India's economic strength incorporates real GDP growth of around 7 per cent over the three-year period between fiscal 2023-24 through 2025-26, while factoring potential upside over the medium-term resulting from improvements in productivity and potential growth on the back of traction on infrastructure development and digitalization’.

The rating agency said although it projects India to grow faster than all other economies in the G20 through fiscal 2025-26, near-term economic momentum masks structural weaknesses that pose risks to long-term potential growth. It noted that high levels of youth unemployment across all sectors and weakness in productivity growth in the sovereign's large agriculture sector continue to constrain its growth potential. While it expects the incoming government to carry over its focus on fiscal consolidation, material improvements in its debt ratios and interest servicing have yet to materialize.

The CNX Nifty is currently trading at 22869.10, up by 248.75 points or 1.10% after trading in a range of 22642.60 and 22880.10. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were SBI up by 5.44%, Coal India up by 4.58%, ONGC up by 4.51%, NTPC up by 4.34% and Shriram Finance up by 3.96%. On the flip side, Hindustan Unilever down by 1.92%, Hindalco down by 1.76%, Hero MotoCorp down by 1.66%, Nestle down by 1.62% and Divi's Lab down by 1.33% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 108.26 points or 0.58% to 18,533.22, Jakarta Composite gained 0.16 points or 0% to 6,947.83, Straits Times rose 11.42 points or 0.34% to 3,341.43, Nikkei 225 surged 302.03 points or 0.78% to 38,792.20 and Taiwan Weighted added 438.37 points or 2.04% to 21,923.25.

On the flip side, Shanghai Composite weakened 2.47 points or 0.08% to 3,062.93.