Sensex, Nifty make positive start on Tuesday

Indian equity benchmarks made positive start on Tuesday tracking overnight gains on Wall Street. Overnight fall in crude oil prices also aided domestic sentiments. Oil prices dropped sharply on Monday following reports that Israel and Lebanon had agreed to terms for a ceasefire to end the Israel-Hezbollah conflict. Sensex and Nifty trimmed some of their opening gains are trading with marginal gains in early deals as traders booked some profit after two sessions of continued gains. Some support came as foreign institutional investors turned net buyers in Indian markets on Monday, provisional exchange data showed, snapping a record selling streak that had partly caused the country's benchmark indexes to confirm corrections earlier this month. FIIs were net buyers of stocks worth Rs 9,948 crore ($1.18 billion), after 38 consecutive sessions of being net sellers during which outflows totalled to about $16.5 billion. However, some cautiousness came as the finance ministry in a report said India's economic outlook for the coming months is cautiously optimistic, with agriculture likely to benefit from favourable monsoon conditions, increased minimum support prices and adequate supply of inputs. Also, it said India’s export recovery may face challenges due to softening demand in developed markets. 

On the global front, Asian markets are trading mostly lower after s US President-elect Donald Trump announced a 10 percent additional tariff on all Chinese goods and a 25 percent tariff on imports from Mexico and Canada, raising concerns over global trade tensions. Traders also seemed reluctant to make more significant moves ahead to the release of key U.S. economic data later in the week, including readings on consumer price inflation preferred by the US Fed.

Back home, tourism industry related stocks are in focus as the government said the contribution of tourism sector to the country's gross domestic product (GDP) for 2022-23 stood at five per cent. In a written response in the Lok Sabha, Union Tourism Minister Gajendra Singh Shekhawat also said that in 2023, the total foreign tourist arrivals stood at 9.52 million. In stock specific developments, BHEL and Hitachi Energy rose after securing Khavda Nagpur project.

The BSE Sensex is currently trading at 80227.18, up by 117.33 points or 0.15% after trading in a range of 80226.88 and 80482.36. 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 0.50%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Telecom up by 1.61%, Realty up by 1.32%, IT up by 1.10%, TECK up by 0.99% and Metal up by 0.86%, while Utilities down by 0.51%, Power down by 0.20% and Healthcare down by 0.06% were the few losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.93%, Tata Steel up by 1.39%, Tech Mahindra up by 1.17%, Asian Paints up by 1.08% and ICICI Bank up by 0.96%. On the flip side, Ultratech Cement down by 1.11%, Adani Ports & SEZ down by 0.73%, Larsen & Toubro down by 0.73%, Sun Pharma down by 0.68% and Hindustan Unilever down by 0.49% were the top losers.

Meanwhile, the Finance Ministry in its latest report has said that India's economic outlook for the coming months is 'cautiously optimistic', with agriculture likely to benefit from favourable monsoon conditions, increased minimum support prices and adequate supply of inputs. The October edition of Monthly Economic Review released by the Department of Economic Affairs said ‘Bright agricultural production prospects make the inflation outlook benign, despite existing price pressures in select food items’. Early November trends signalled moderation in key food prices, though geopolitical factors may continue to impact domestic inflation and supply chains.

It said a bumper kharif harvest is expected to lower food inflation in the coming months, and added that a favourable monsoon, adequate reservoir levels and higher minimum support prices are likely to boost rabi sowing and production. Amidst a clouded global background, and after a brief period of softening momentum over the monsoon months, the report said, many high-frequency indicators of economic activity in India have shown a rebound in October. These include indicators of rural and urban demand and supply side variables like Purchasing Managers' Index and E-way bill generation.

On the employment front, it said, the formal workforce is expanding, with notable increases in manufacturing jobs and a strong inflow of youth into organised sectors. With regard to the external front, it said, India's export recovery may encounter challenges due to softening demand in developed markets. However, it said, trade in the services sector is sustaining momentum. Net foreign direct investment inflows registered remarkable growth in the first five months of FY25. Supported by stable capital inflows, India's forex reserves increased by $64.8 billion so far during 2024, the second-largest increase after China amongst major forex reserve-holding countries.

The report said apart from the emerging indications of domestic growth and stability, the dynamics of global interest rates, earning growth and valuation, geopolitical developments and policy decisions of the next administration in the United States will determine the course of trade and capital flows. Recent developments in the ongoing conflict between Russia and Ukraine have caused some concern in financial markets with safe-haven assets such as US Treasuries and gold finding a bid, it said, adding, that geopolitical conditions remain fragile. The report said the global economy reveals a mixed outlook as 2024 draws to a close. Structural weaknesses in parts of Europe and China's slowdown continued to weigh on growth. In contrast, the US economy has surpassed earlier expectations, maintaining steady expansion.

The CNX Nifty is currently trading at 24261.25, up by 39.35 points or 0.16% after trading in a range of 24258.10 and 24343.30. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 2.12%, Infosys up by 1.84%, Shriram Finance up by 1.57%, Tata Steel up by 1.34% and Tech Mahindra up by 1.22%. On the flip side, Ultratech Cement down by 1.11%, Adani Ports & SEZ down by 0.90%, Larsen & Toubro down by 0.84%, Bajaj Auto down by 0.80% and Trent down by 0.66% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 572.35 points or 1.48% to 38,207.79, Taiwan Weighted lost 197.14 points or 0.86% to 22,751.23, KOSPI dropped 21.28 points or 0.84% to 2,513.06, Straits Times fell 11.32 points or 0.3% to 3,720.07, Jakarta Composite was down by 9.8 points or 0.13% to 7,304.31. On the other hand, Hang Seng advanced 93.64 points or 0.49% to 19,244.63 and Shanghai Composite was up by 14.06 points or 0.43% to 3,277.82.