Sensex, Nifty struggle for direction amid mixed macro-economic data

Indian equity benchmarks made cautious start of December month after India's September quarter Gross Domestic Product (GDP) print came in widely lower than market expectations at 5.4 percent, and US President-elect Donalt Trump threatened 100% tariffs on BRICS nations if they act to weaken the dollar's dominance in international trade. Investors are awaiting the manufacturing PMI data scheduled for release later in the day. Sensex and Nifty are trading tad lower in early deals. Traders were concerned as Crisil expects GDP growth to slow to 6.8% this financial year 2024-25. It said the growth is weighed down by high interest rates and low fiscal impulse. Some pessimism also came in as India’s foreign exchange reserves have declined $48 billion in the past two months (since September 27) as Reserve Bank of India (RBI) data showed that India services exports rose for the second month in a row, increasing 22.3% in October to $34.3 billion.

However, downside remained capped as some support came after the government data showed that foreign direct investment in India rose by 45% year-on-year to $29.79 billion in April-September this fiscal on healthy inflows in services, computer, telecom and pharma sectors. Traders took some encouragement as the government data showed that the total gross Goods and Services Tax (GST) revenue grew 8.5% to over Rs 1.82 lakh crore in November as compared to Rs 1.68 lakh crore in the same month a year ago. 

On the global front, Asian markets are trading mostly higher, following the broadly positive cues from Wall Street on Friday, as traders reacted to a slew of domestic economic data from the region and they also look to pick up stocks at relatively reduced levels following pullback seen last week. Traders also remain optimistic of a further interest rate cut by the US Fed in December. Back home, aviation stocks are in limelight with report that Jet fuel, or aviation turbine fuel (ATF), price was hiked by 1.45%. In stock specific development, RBL Bank traded under pressure as it winds up co-branded credit card tie-up with Bajaj Finance.

The BSE Sensex is currently trading at 79710.87, down by 91.92 points or 0.12% after trading in a range of 79308.95 and 79848.16. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.35%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.48%, Realty up by 1.11%, Healthcare up by 0.96%, Consumer Discretionary up by 0.72% and Basic Materials up by 0.61%, while Oil & Gas down by 0.51%, Bankex down by 0.42%, Energy down by 0.38%, Capital Goods down by 0.17% and PSU down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.06%, Sun Pharma up by 1.54%, Ultratech Cement up by 1.52%, Adani Ports & SEZ up by 1.50% and Tech Mahindra up by 0.94%. On the flip side, Indusind Bank down by 1.20%, Bajaj Finance down by 1.05%, HDFC Bank down by 0.91%, Larsen & Toubro down by 0.81% and Hindustan Unilever down by 0.75% were the top losers.

Meanwhile, Chief Economic Advisor V Anantha Nageswaran has said that India's second quarter GDP growth at 5.4 per cent is disappointing but maintained that overall growth projection for FY25 at 6.5 per cent is ‘not in danger’. The Economic Survey projected India's GDP to grow at 6.5-7 per cent in 2024-25, down from a high of 8.2 per cent in the preceding financial year. He said agriculture and allied sector and construction sector are some of the bright spot, and added that record production estimates for kharif foodgrains as well as promising rabi crop prospects augur well for farm income and rural demand.

On the basis of second quarter number, he said it cannot be said that 6.5 per cent number is in danger as the low second quarter number is not a trend. He exuded confidence that economy shows resilience underpinned by steady demand and strong manufacturing and service sector activity. Talking about other bright spot, he said, labour market shows signs of growth, with an easing unemployment rate and expanding formal workforce, with notable increases in manufacturing jobs and a strong inflow of youth into organised sectors. He also said better growth in labour incomes holds the key to sustained demand growth and capital formation in the private sector, and added that global crude oil prices remaining low, bodes well for economic activity and price stability.

With regard to challenges, Nageswaran said geopolitical conditions remain fragile and may continue to impact domestic inflation, supply chains and capital flows. He said elevated asset prices globally is a risk factor, and added that exports face greater uncertainties due to potential policy development elsewhere and an uncertain outlook for monetary policy and economic growth in advanced economies. He further said limits to states' capacity on capex, capital-intensive growth in private corporate sector and the regulatory environment are medium- to long-term risk factors for economic growth.

The CNX Nifty is currently trading at 24111.90, down by 19.20 points or 0.08% after trading in a range of 24008.65 and 24154.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 1.83%, Maruti Suzuki up by 1.81%, Apollo Hospital up by 1.61%, Sun Pharma up by 1.51% and Grasim Industries up by 1.48%. On the flip side, HDFC Life Insurance down by 1.30%, Indusind Bank down by 1.30%, Bajaj Finance down by 1.14%, Larsen & Toubro down by 0.90% and HDFC Bank down by 0.82% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted jumped 498.2 points or 2.24% to 22,760.70, Nikkei 225 surged 254.08 points or 0.66% to 38,462.11, Hang Seng advanced 44.66 points or 0.23% to 19,468.27, Shanghai Composite strengthened 33.92 points or 1.01% to 3,360.38 and Straits Times rose 14.8 points or 0.4% to 3,754.09. On the other hand, Jakarta Composite fell 9.25 points or 0.13% to 7,105.02 and KOSPI was down by 0.69 points or 0.03% to 2,455.22.