Sensex, Nifty end marginally higher

Indian equity benchmarks steadily pared gains after scaling new life-time highs in early trades, but managed to close marginally in green on Thursday due to selective buying in Healthcare, IT and TECK stocks amid a largely positive trend in global equities. Markets opened at a record high as traders took encouragement with a CRISIL Ratings report stating that revenues of top 18 states, which account for 90 per cent of India's gross state domestic product, are likely to grow at a pace of eight to 10 per cent during the current financial year at Rs 38 lakh crore with robust GST collections and devolution of finances from the Centre, which comprise around 50 per cent of the aggregate state revenues. Traders took a note of S&P Global Ratings’ report stating that a sovereign rating upgrade for India in the next 24 months is possible if the central government is able to prudently manage its finances and bring down fiscal deficit to 4 per cent of GDP.

However, markets trimmed most of their gains throughout the day but managed to scale fresh record closing highs, taking support from a research paper by the economic think tank NCAER stating that poverty in India is estimated to have declined to 8.5 per cent in 2022-24 from 21.2 per cent in 2011-12, despite the challenges posed by the pandemic. Some solace also came amid a private report stating that India aims to clock $2 trillion goods and services exports by 2030 amid the Red Sea crisis and two ongoing wars. Ecommerce exports are growing rapidly and those done through the postal and courier routes are pegged at $1.5 billion. Besides, another private report stated that the government is likely to increase subsidies on rural housing in the upcoming Budget 2024 by up to 50 percent from the previous year to more than $6.5 billion.  

On the global front, European markets were trading higher as voting began across polling stations, with polls predicting a historic win for the Labour party. Investors shrugged off data that showed German factory orders logged an unexpected decline in May due to the decrease in foreign demand. Asian markets ended mostly higher on Thursday following the mostly positive cues from global markets, reflecting optimism about an interest rate cut by the US Fed in September following the release of weaker than expected US economic data.

Finally, the BSE Sensex rose 62.87 points or 0.08% to 80,049.67, and the CNX Nifty was up by 15.65 points or 0.06% points to 24,302.15. 

The BSE Sensex touched high and low of 80,392.64 and 79,986.41 respectively. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.60%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.17%, IT up by 1.12%, TECK up by 0.98%, Auto up by 0.88% and PSU up by 0.77%, while Consumer Durables down by 0.22%, FMCG down by 0.15% and Oil & Gas down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.69%, ICICI Bank up by 2.54%, Tata Motors up by 2.40%, Sun Pharma up by 1.83% and TCS up by 1.42%. On the flip side, HDFC Bank down by 2.36%, Bajaj Finance down by 1.97%, Larsen & Toubro down by 1.12%, Tech Mahindra down by 1.12% and Ultratech Cement down by 0.91% were the top losers.

Meanwhile, CRISIL Ratings in its latest report has said that revenues of top 18 states, which account for 90 per cent of India's gross state domestic product, are likely to grow at a pace of 8 to 10 per cent during the current financial year (FY25) at Rs 38 lakh crore. Last fiscal, the revenues of the 18 states grew by seven per cent.

It stated the growth will be primarily driven by robust GST collections and devolution of finances from the Centre, which comprise around 50 per cent of the aggregate state revenues. Moreover, it said that while revenue on liquor sales, which is ten per cent of the states' revenues, is expected to remain stable, collections of sales tax imposed on petroleum products and grants recommended by the 15th Finance Commission will be modest.

Senior director of CRISIL Ratings Anuj Sethi said that the biggest impetus to revenue growth will continue to come from aggregate state GST collections and also from improved tax compliance and greater formalisation of the economy. Central tax devolutions are expected to grow by 12 to 13 per cent in the current financial year which will be an important driver. Grants from the Centre will grow by four to five per cent, which is in line with the Budget outlay.

The CNX Nifty traded in a range of 24,401.00 and 24,281.00. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.75%, HCL Technologies up by 2.63%, ICICI Bank up by 2.53%, Sun Pharma up by 1.83% and TCS up by 1.38%. On the flip side, HDFC Bank down by 2.30%, Bajaj Finance down by 2.06%, Adani Enterprises down by 1.47%, Wipro down by 1.25% and Tech Mahindra down by 1.20% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 58.87 points or 0.72% to 8,229.99, France’s CAC rose 55.11 points or 0.72% to 7,687.19 and Germany’s DAX gained 55.82 points or 0.3% to 18,430.35.

Asian markets ended mostly higher on Thursday after a slew of softer-than-expected US economic data fuelled speculation that the Federal Reserve could slash interest rates as early as September. Meanwhile, investors are now awaiting minutes from the Fed’s latest policy meeting to gauge future interest rate cuts. Investors are also awaiting the release of key US nonfarm payrolls report and British election outcome. Japanese shares gained as a weaker yen boosted automakers and other export-related shares. However, Chinese shares fell due to plummeting property shares ahead of next week's Chinese political meeting.