Benchmarks trade tad higher after cautious start amid weak global cues

Indianequity benchmarks made cautious start tracking weakness in Asian counterpartsand mixed cues from Wall Street overnight due to lingering concerns surroundingU.S. and Chinese growth. Investors globally were awaiting US consumer priceindex data that would provide more clarity about the quantum and frequency ofinterest rate cuts by the US central bank this year, apart from the debatebetween presidential contenders Kamala Harris and Donald Trump. Closer home,Sensex and Nifty soon gathered some momentum and are trading higher withmarginal gains in early deals as traders are hunting for fundamentally strongstocks. Traders took note of Fitch Ratings’ statement that India remainscommitted to reducing the budget deficit over the medium term, despite itsfocus on higher public capex and demands of the coalition government. It saidIndia has achieved or outperformed its budget deficit targets in the last fewyears, thereby improving its fiscal credibility.

On the sectoral front, oil sector stocks are in focus after OPECcut its forecast for global oil demand growth in 2024 reflecting data receivedso far this year and also trimmed its expectation for next year, marking theproducer group's second consecutive downward revision. In stock specificdevelopment, Lemon Tree Hotels climbed after signing deal for a new 108-roomhotel in Mumbai.

The BSE Sensex is currently trading at 81978.93, up by 57.64 points or 0.07% after trading in a range of 81741.65 and 82009.78. There were 22 stocks advancing against 7 stocks declining, while 1 stock remain unchanged 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 0.46%.

The top gaining sectoral indices on the BSE were Power up by 0.86%, Healthcare up by 0.77%, Capital Goods up by 0.71%, Telecom up by 0.60% and Industrials up by 0.49%, while Oil & Gas down by 0.58%, Auto down by 0.53%, Energy down by 0.30%, Metal down by 0.15% and Realty down by 0.09% were the losing top indices on BSE.

The top gainers on the Sensex were Asian Paints up by 0.85%, Bajaj Finance up by 0.84%, Sun Pharma up by 0.78%, Bharti Airtel up by 0.58% and SBI up by 0.56%. On the flip side, Tata Motors down by 4.22%, ICICI Bank down by 0.26%, JSW Steel down by 0.21%, Titan Company down by 0.18% and Infosys down by 0.13% were the top losers.

Meanwhile, Fitch Ratings in a report has said that India remains committed to reducing the budget deficit over the medium term, despite its focus on higher public capex and demands of the coalition government. It said India has achieved or outperformed its budget deficit targets in the last few years, thereby improving its fiscal credibility.

The agency said India using RBI dividend to lower its fiscal deficit target for the fiscal year ending March 2025, reinforces its view that the country prefers fiscal consolidation over additional spending. It added still, India's deficit, and interest-to-revenue and debt ratios remain high compared with the 'BBB' category sovereign peers.

The rating agency said ‘...we believe its (India) government remains committed to reducing the budget deficit over the medium term, even amid the demands that governing in the coalition will impose on the newly elected administration - and despite the government's sustained focus on supporting economic growth through higher public capex’.

In the full Budget presented in July, the government lowered the fiscal deficit target to 4.9 per cent for the current financial year against 5.1 per cent estimated in February's interim Budget. In May, the RBI board approved a Rs 2.11 lakh crore dividend to the government for 2023-24 fiscal. Recently, Fitch Ratings affirmed India's sovereign rating at 'BBB-' with a stable outlook citing a strong medium-term growth outlook and solid external financing position.

The CNX Nifty is currently trading at 25062.10, up by 21.00 points or 0.08% after trading in a range of 24981.30 and 25073.50. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.73%, Dr. Reddy's Lab up by 1.12%, Tata Consumer Products up by 1.05%, Cipla up by 0.89% and Asian Paints up by 0.81%. On the flip side, Tata Motors down by 4.28%, ONGC down by 1.91%, Hindalco down by 0.78%, Eicher Motors down by 0.56% and LTIMindtree down by 0.53% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 566 points or 1.57% to 35,593.16, Hang Seng declined 242.01 points or 1.4% to 16,992.08, Shanghai Composite weakened 25.34 points or 0.93% to 2,718.85, Jakarta Composite fell 12.59 points or 0.16% to 7,748.80 and KOSPI was down by 11.68 points or 0.46% to 2,511.75. On the other hand, Straits Times rose 15.06 points or 0.43% to 3,527.73 and Taiwan Weighted was up by 0.46 points or 0% to 21,064.54.