Domestic indices trade higher with strong gains in early deals

Indian equity benchmarks made optimistic start on Wednesday following the broadly positive cues from Wall Street overnight as well as firm trade in Asian counterparts. Domestic indices are trading higher with strong gains of around a percent each in early deals on account of value buying. Investors are keeping a close watch on quarterly earnings reports and outcome of the RBI policy meeting on Thursday. Reserve Bank's rate-setting panel started its three-day deliberations for the next set of bi-monthly monetary policy amid expectations of no change in benchmark interest rate in view of concerns on inflation and economic growth remaining steady. 

Some support came as a Labour Ministry report showed that retail inflation for industrial workers slipped to 3.67 per cent in June from 3.86 per cent in the previous month this year mainly due to lower prices of certain food items. It said year-on-year inflation for the month of June 2024 moderated to 3.67 per cent as compared to 5.57 per cent in June 2023. Traders took note of S&P Global Ratings’ statement that India stands out both on growth and external fronts amongst the South Asian countries, and the trajectory of government's fiscal deficit will decide on the direction of sovereign ratings.

On the sectoral front, electric vehicle industry stocks are in focus as the monthly sales data from Federation of Automobile Dealers' Association (FADA) showed that electric vehicle sales registered a 55.2 per cent on-year growth at 179,038 units in July driven by a massive 96 per cent jump in e-two-wheeler sales. As per data, the total electric vehicles sales for July 2023 were at 116,221 units. In stock specific development, Lupin traded higher as its profit jumps 77% to Rs 801 crore on strong performance.

The BSE Sensex is currently trading at 79275.99, up by 682.92 points or 0.87% after trading in a range of 79228.14 and 79639.20. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.58%, while Small cap index was up by 0.98%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.32%, Energy up by 2.67%, PSU up by 2.23%, Metal up by 2.09% and Capital Goods up by 1.61%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Adani Ports &Special up by 2.01%, Mahindra & Mahindra up by 1.94%, Infosys up by 1.82%, Ultratech Cement up by 1.71% and Power Grid Corp up by 1.64%. On the flip side, Asian Paints down by 1.12%, Bharti Airtel down by 0.37%, Titan Company down by 0.27% and Kotak Mahindra Bank down by 0.21% were the top losers.

Meanwhile, expressing optimism over India’s growth path, S&P Global Ratings has said India stands out both on growth and external fronts amongst the South Asian countries, and the trajectory of government's fiscal deficit will decide on the direction of sovereign ratings. S&P Director, Sovereign and International Public Finance Ratings (Asia-Pacific), Andrew Wood has said the rating agency sees a lot of promise in India's economic growth story even though the global economic growth outlook remains somewhat challenging. He said ‘We could raise the rating if India's fiscal deficit narrows meaningfully such that change in net general government deficit falls below 7 per cent of GDP on a structural basis’. He said in the geography of South Asia, India stands out both on growth and external fronts.

He added ‘India is a net external creditor economy which is a core support for its investment grade rating. We see a lot of promise in India's economic growth story even in a somewhat challenging global economic growth outlook’. The Budget for 2024-25 has announced targeting a central government fiscal deficit of 4.9 per cent of GDP in the current fiscal, lower than 5.1 per cent targeted earlier. He said ‘This is good news at the margin but combined with local government deficit, general government deficit is likely to remain above 7 per cent of GDP at least for current fiscal. So the trajectory for this metrics over the next few years will remain an important one for the directionality of India's ratings’.

In May, S&P Global Ratings had upped India's sovereign rating outlook to positive from stable on robust growth prospects for next three years and public spending, and raised hopes for an upgrade in two years provided the government continues reforms and policies to keep fiscal deficit under check. While retaining India's sovereign rating at the lowest investment grade of 'BBB-', S&P said it expects broad continuity in economic reforms and fiscal policies, irrespective of the election outcome.

The CNX Nifty is currently trading at 24216.10, up by 223.55 points or 0.93% after trading in a range of 24216.05 and 24306.45. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were ONGC up by 6.44%, Coal India up by 3.35%, BPCL up by 2.91%, Hero MotoCorp up by 2.41% and Hindalco up by 2.38%. On the flip side, Asian Paints down by 1.21%, Bharti Airtel down by 0.27%, Titan Company down by 0.21% and Kotak Mahindra Bank down by 0.01% were the top losers.

All Asian markets are trading higher; Nikkei 225 surged 952.36 points or 2.67% to 35,627.82, Taiwan Weighted added 727.46 points or 3.43% to 21,228.48, Hang Seng advanced 217.58 points or 1.29% to 16,864.92, Jakarta Composite gained 98.84 points or 1.37% to 7,228.06, KOSPI strengthened 59.92 points or 2.32% to 2,582.07, Straits Times rose 40.35 points or 1.25% to 3,238.79 and Shanghai Composite was up by 8.89 points or 0.31% to 2,876.17.