Benchmarks remain in red in morning deals

Indian equity benchmarks remained in red in morning deals, due to losses in Banking, Auto and FMCG stocks. Traders remained cautious with Moody's Ratings’ statement that India's fiscal deficit glide path for 2025-26 is reasonable, but a coalition government at the center may challenge the passage of necessary economic reforms. Some concern also came as data showed the foreign institutional investors (FIIs) turned net sellers on July 23 as they sold equities worth Rs 2975 crore, while domestic institutional investors bought equities worth Rs 1418 crore on the same day. Traders overlooked Karun Rishi, president of USA India Chamber of Commerce stated that the future ready budget presented by Union Finance Minister Nirmala Sitharaman aims to realize the vision of Viksit Bharat by raising spending to generate more jobs and spur economic growth. The finance minister has maintained fiscal discipline, with a commendable reduction in the fiscal deficit target to 4.9% of GDP for FY25, down from the 5.1% target in the interim budget. On the global front, Asian markets are trading mostly in red after lacklustre earnings from U.S. tech behemoths Tesla and Alphabet dented sentiment, while the yen hit a six-week high ahead of a central bank meeting next week where a rate hike remains on the table. Traders also watching out for an inflation reading on Friday and Federal Reserve meeting next week. 

The BSE Sensex is currently trading at 80225.19, down by 203.85 points or 0.25% after trading in a range of 80087.29 and 80519.58. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.47%, while Small cap index was up by 1.47%.

The top gaining sectoral indices on the BSE were Utilities up by 1.58%, Oil & Gas up by 1.38%, Power up by 1.35%, Energy up by 1.13% and PSU up by 1.13%, while Bankex down by 0.52%, Auto down by 0.31% and FMCG down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.11%, NTPC up by 2.79%, Tech Mahindra up by 1.81%, ITC up by 1.36% and Tata Steel up by 1.03%. On the flip side, Bajaj Finance down by 2.63%, Nestle down by 1.89%, Mahindra & Mahindra down by 1.80%, Hindustan Unilever down by 1.60% and Bajaj Finserv down by 1.52% were the top losers.

Meanwhile, Ajay Seth, Secretary at Department of Economic Affairs under Ministry of Finance has said fiscal consolidation by way of gliding down on fiscal deficit path is being done while meeting all essential expenditure. He stated ‘Fiscal consolidation is being done while meeting all essential expenditure, meeting all priority expenditure, providing for new initiatives like employment in the skilling this year and is still leaving enough for the private sector and taking the government finances to a more sustainable.’

The fiscal deficit target for 2024-25 is pegged at 4.9 per cent, better than what was estimated in the Interim Budget. He said ‘We have got some more money from RBI (as dividend), and that has been utilized to retire some of the high-cost debt, etc. So we are fairly confident about 4.9 per cent, and this is on way to the final goal, or rather the next step, which has been announced, to become less than 4.5 per cent.’

Further, he said that the purpose behind it is that if the government is borrowing moderately, there will be more money available for the private sector business. Presenting the Union Budget for 2024-25, Union Finance Minister Nirmala Sitharaman pegged the fiscal deficit target at 4.9 per cent of gross domestic product (GDP). In the Interim Budget tabled on February 1, she pegged it at 5.1 per cent of GDP.

The CNX Nifty is currently trading at 24400.65, down by 78.40 points or 0.32% after trading in a range of 24373.45 and 24504.25. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.93%, ONGC up by 2.86%, HDFC Life Insurance up by 2.68%, NTPC up by 2.42% and SBI Life Insurance up by 2.40%. On the flip side, Bajaj Finance down by 2.63%, Tata Consumer Product down by 2.47%, Bajaj Finserv down by 1.90%, Nestle down by 1.89% and Mahindra & Mahindra down by 1.82% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 108.24 points or 0.62% to 17,361.12, Jakarta Composite plunged 22.65 points or 0.31% to 7,291.21, Straits Times fell 3.69 points or 0.11% to 3,457.47, KOSPI dropped 15.95 points or 0.57% to 2,758.34 and Nikkei 225 slipped 421.15 points or 1.06% to 39,173.24.

On the flip side, Shanghai Composite strengthened 2.9 points or 0.1% to 2,918.27.