Domestic indices trade flat in early deals amid volatility

Indian equity benchmarks made cautious start on Tuesday tracking weakness in Asian counterparts. Soon, markets turned volatile and are swinging between green and red terrain. At this point of trade, markets are trading flat amid foreign fund outflows. On July 29, foreign institutional investors (FIIs) sold shares worth Rs 2,474.54 crore. Some cautiousness came with a report that the government estimates its debt, including external borrowing, valued at current exchange rate and public account and other liabilities will increase to Rs 185 trillion, or 56.8 per cent of the GDP, during the current fiscal year. However, downside remained capped as economic think tank NCAER said the Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty. 

On the global front, Asian markets are trading mostly lower, following the mixed cues from Wall Street overnight, as traders seemed reluctant to make significant moves ahead of the central bank policy meetings in the U.S., Japan and the U.K. later in the week and earnings news from several major technology companies, including Microsoft, Meta, Apple and Amazon. 

Back home, power industry stocks are in focus as the government data showed that India's total installed power generation capacity has grown around 80 per cent over the last 10 years to 446,190 MW (4.46 GW) in June 2024. In stock specific development, Colgate-Palmolive India soared after posting 33 percent growth in quarterly profit.

The BSE Sensex is currently trading at 81388.88, up by 33.04 points or 0.04% after trading in a range of 81230.44 and 81520.94. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.31%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Utilities up by 2.20%, Power up by 2.10%, PSU up by 1.06%, Oil & Gas up by 0.95% and Energy up by 0.83%, while IT down by 0.32%, TECK down by 0.27% and Basic Materials down by 0.02% were the few losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.65%, NTPC up by 3.45%, Tata Motors up by 2.40%, Asian Paints up by 1.83% and Bajaj Finserv up by 0.75%. On the flip side, Ultratech Cement down by 1.32%, Sun Pharma down by 0.95%, Mahindra & Mahindra down by 0.76%, TCS down by 0.65% and Bharti Airtel down by 0.50% were the top losers.

Meanwhile, expressing optimism over India’s growth, economic think tank National Council of Applied Economic Research (NCAER), in its July 2024 issue of Monthly Economic Review (MER), has said that the Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty. It added real GDP grew by 8.2 per cent in FY2023-24, driven by stable consumption demand and steadily improving investment demand.

NCAER director general Poonam Gupta said ‘Based on the momentum in the high-frequency indicators, normalised monsoon, a relatively benign global outlook and receded electoral uncertainty, both in India and in the rest of the world, growth will likely turn out to be higher than 7 per cent, and possibly closer to 7.5 per cent’. Gupta said the Union Budget 2024-25 lived up to the expectations of unwavering commitment to fiscal consolidation, prudence, and quality. The Budget has kept the fiscal deficit target at 4.9 per cent of GDP and capital expenditure at 2.4 per cent of GDP during 2024-25.

According to the NCAER, the short to medium-term growth strategy is based on six key areas -- private sector capital formation, green transition financing, MSME development, agricultural transformation, Education and skill development, and enhanced state capacity. The NCAER-NSE business confidence index (BCI) increased to 149.8 in the first quarter (Q1) of FY25, up from 138.2 in the fourth quarter (Q4) of FY24, indicating an improvement in business sentiments.

The CNX Nifty is currently trading at 24833.55, down by 2.55 points or 0.01% after trading in a range of 24798.65 and 24887.45. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.71%, NTPC up by 3.53%, BPCL up by 3.45%, Tata Motors up by 2.23% and Coal India up by 1.76%. On the flip side, SBI Life Insurance down by 2.08%, Hindalco down by 1.53%, HDFC Life Insurance down by 1.40%, Ultratech Cement down by 1.40% and LTIMindtree down by 1.25% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 223.05 points or 0.58% to 38,245.58, Hang Seng declined 199.99 points or 1.16% to 17,038.35, Taiwan Weighted lost 96.39 points or 0.43% to 22,068.10, Jakarta Composite plunged 44.64 points or 0.61% to 7,244.26, KOSPI dropped 30.20 points or 1.09% to 2,735.33 and Shanghai Composite weakened 14.98 points or 0.52% to 2,876.87, while Straits Times rose 4.22 points or 0.12% to 3,448.40.