Markets trade with traction in early deals

Indian equity benchmarks made optimistic start on Wednesday despite mixed cues from global peers. Markets soon gathered momentum and are trading firm with gains of around half a percent each in early deals on account of value buying. Some support came in as a world bank report stated that India will remain the fastest-growing major economy recording a steady growth of 6.7 per cent in the next three years including the current financial year. Traders took note of report that exports from special economic zones (SEZs) rose by over 4 per cent to $163.69 billion in 2023-24 even though the country's total shipments dipped by more than 3 per cent in the last fiscal. Meanwhile, investors are eyeing the Index of Industrial Protection (IIP) and Consumer Price Index (CPI) data to be out later in the day for more directional cues. 

On the global front, Asian markets are trading mixed, following the mixed cues from Wall Street overnight, as traders remain cautious ahead to the key US inflation report and the latest US Fed interest rate decision later in the day. While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for cues on the outlook for interest rates. 

Back home, on the sectoral front, metal stocks are in focus as India Ratings and Research (Ind-Ra) said the steel demand is expected to grow in the range of 9-12 per cent during the ongoing 2024-25 fiscal. As per the report, the demand will be supported by steady growth in the end-user industries such as automobile and infrastructure sectors. In stock specific development, HCL Technologies jumped on bagging a $278 million deal from Germany's largest cooperative primary bank, apoBank.

The BSE Sensex is currently trading at 76802.60, up by 346.01 points or 0.45% after trading in a range of 76553.53 and 76823.29. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.87%, while Small cap index was up by 0.95%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.57%, Energy up by 1.34%, Industrials up by 1.20%, Capital Goods up by 1.14% and Telecom up by 1.06%, while Realty down by 0.23%, FMCG down by 0.15% and Consumer Durables down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.08%, HCL Technologies up by 1.65%, Power Grid up by 1.37%, Wipro up by 1.18% and Tata Steel up by 1.05%. On the flip side, Asian Paints down by 0.63%, Titan Company down by 0.51%, ITC down by 0.37%, Hindustan Unilever down by 0.25% and Nestle down by 0.24% were the top losers.

Meanwhile, expressing optimism over the India’s growth prospects, the World Bank in its latest Global Economic Prospects report has stated that the country will remain the fastest-growing major economy recording a steady growth of 6.7 per cent in the next three years including the current financial year. As per the report, in India, growth is estimated to have picked up to 8.2 per cent in fiscal year (FY) 2023/24 (April 2023 to March 2024) - 1.9 percentage points higher than estimated in January. It further said global growth is projected to hold steady at 2.6 per cent in 2024 before edging up to an average of 2.7 per cent in 2025-26. That is well below the 3.1 per cent average in the decade before COVID-19.

It noted ‘The forecast implies that over the course of 2024-26 countries that collectively account for more than 80 per cent of the world’s population and global GDP would still be growing more slowly than they did in the decade before COVID-19’. Growth in the South Asia (SAR) region is projected to slow from 6.6 per cent in 2023 to 6.2 per cent in 2024, mainly due to a moderation of growth in India from a high base in recent years. With steady growth in India, regional growth is forecast to stay at 6.2 per cent in 2025-26. Among the region’s other economies, growth is expected to remain robust in Bangladesh, though at a slower rate than in the past several years, and to strengthen in Pakistan and Sri Lanka.

The report said ‘India will remain the fastest-growing of the world’s largest economies, although its pace of expansion is expected to moderate. After a high growth rate in FY2023/24, steady growth of 6.7 per cent per year, on average, is projected for the three fiscal years beginning in FY2024/25’. This moderation is mainly due to a slowdown in investment from a high base. However, investment growth is still expected to be stronger than previously envisaged and remain robust over the forecast period, with strong public investment accompanied by private investment. It further said that private consumption growth is expected to benefit from a recovery of agricultural production and declining inflation.

It added government consumption is projected to grow only slowly, in line with the government’s aim of reducing current expenditure relative to GDP. According to the report, global inflation is expected to moderate to 3.5 per cent in 2024 and 2.9 per cent in 2025, but the pace of decline is slower than was projected just six months ago. Many central banks, as a result, are expected to remain cautious in lowering policy interest rates. Global interest rates are likely to remain high by the standards of recent decades - averaging about 4 per cent over 2025-26, roughly double the 2000-19 average. In India, World Bank said inflation has remained within the Reserve Bank’s target range of 2 to 6 per cent since September 2023.

The CNX Nifty is currently trading at 23374.55, up by 109.70 points or 0.47% after trading in a range of 23295.95 and 23378.50. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.94%, Tata Motors up by 1.92%, Coal India up by 1.82%, HCL Technologies up by 1.66% and LTIMindtree up by 1.52%. On the flip side, Titan Company down by 0.61%, Asian Paints down by 0.60%, ITC down by 0.51%, Britannia Industries down by 0.37% and Hindustan Unilever down by 0.33% were the top losers.

Asian markets are trading mixed; Taiwan Weighted surged 239.65 points or 1.1% to 22,031.77, KOSPI rose 11.68 points or 0.43% to 2,717.00, Straits Times added 5.22 points or 0.16% to 3,314.43 and Jakarta Composite was up by 4.15 points or 0.06% to 6,859.84. On the other hand, Hang Seng declined 263.24 points or 1.45% to 17,913.10, Nikkei 225 slipped 251.32 points or 0.64% to 38,883.47 and Shanghai Composite was down by 0.64 points or 0.02% to 3,027.41.