Sensex, Nifty trade firm in early deals

Indian equity benchmarks made an optimistic start tracking broadly positive cues from global peers. Sensex and Nifty are trading firm in early deals with decent gain. Some support came in with a private report that India’s gross domestic product (GDP) growth, which plunged to 5.4 per cent in the July-September quarter, is making a comeback in the October-December period, according to high-frequency indicators cited in the State of the Economy report by the Reserve Bank of India (RBI). Traders took note of report that the government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26. 

On the global front, Asian markets are trading mostly in green following the lack of cues from global markets overnight as they were closed for Christmas holiday and the thin trading with some markets in the region closed in the holiday-shortened week. Traders react to China's central bank holding the interest rate on the one-year medium-term lending facility at 2% on Wednesday. Markets in Hong Kong and Indonesia are closed. 

Back home, metal stocks are in focus with report that the steel ministry has urged the Ministry of Finance to double the basic Customs duty on imported finished steel products to 15 per cent from the current 7.5 per cent in the upcoming Union Budget for 2025-26. In stock specific development, Panacea Biotec climbed on getting Rs 127 crore UNICEF order for for the supply of 115 million doses of bOPV in 2025.

The BSE Sensex is currently trading at 78707.93, up by 235.06 points or 0.30% after trading in a range of 78556.29 and 78898.37. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.33%, while Small cap index was down by 0.31%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.72%, PSU up by 0.70%, Bankex up by 0.60%, Energy up by 0.51% and Metal up by 0.25%, while Realty down by 0.78%, Healthcare down by 0.30%, IT down by 0.22%, Consumer discretionary down by 0.18% and FMCG down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.09%, Axis Bank up by 0.95%, Bharti Airtel up by 0.81%, Adani Ports & SEZ up by 0.75% and Power Grid up by 0.68%. On the flip side, Tech Mahindra down by 0.64%, Asian Paints down by 0.44%, Zomato down by 0.40%, TCS down by 0.36% and Nestle down by 0.15% were the top losers.

Meanwhile, a finance ministry document has said that the government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26. Finance Minister Nirmala Sitharaman is schedule to present the Budget for 2025-26 in Parliament on February 1. The Union government is committed to pursuing the glide path of fiscal consolidation as announced in the Budget for FY 2021-22 and to attain a level of fiscal deficit lower than 4.5 per cent of GDP by FY 2025-26, according to finance ministry statements on the half yearly review of the trends in receipts and expenditure and deviation in meeting the obligations of the government under the Fiscal Responsibility and Budget Management Act, 2003.

It said ‘the thrust will be on improving the quality of public spending, while at the same time, strengthening the social security net for the poor and needy. This approach would help further strengthen the nation's macro-economic fundamentals and ensure overall financial stability’. The Budget 2024-25 was presented in the backdrop of global uncertainties caused by the wars in Europe and the Middle East. India's sound macro-economic fundamentals have cushioned the country from the vagaries afflicting the global economy. The document said ‘It has also helped the nation pursue growth with fiscal consolidation. As a result, India retains its pride of place as one of the fastest growing economies in the world. However, risks to growth still remain’.

Total expenditure was estimated at about Rs 48.21 lakh crore, of which, expenditure on revenue account and capital account were estimated at about Rs 37.09 lakh crore and Rs 11.11 lakh crore, respectively, as per the Budget Estimate (BE) of 2024-25. As against total expenditure of Rs 48.21 lakh crore, the expenditure in first half of FY25 was Rs 21.11 lakh crore or about 43.8 per cent of BE. Taking into account the grant for creation of capital assets, the effective capital expenditure (Capex) was projected at Rs 15.02 lakh crore. Gross Tax Revenue (GTR) was estimated at about Rs 38.40 lakh crore with an implied tax-GDP ratio of 11.8 per cent. 

Total non-debt receipt of the Centre was estimated at about Rs 32.07 lakh crore. It comprised tax revenue (net to Centre) of about Rs 25.83 lakh crore, non-tax revenue of about Rs 5.46 lakh crore, and miscellaneous capital receipts of Rs 0.78 lakh crore. With above estimates of receipts and expenditure, the fiscal deficit was pegged at about Rs 16.13 lakh crore in BE 2024-25 or 4.9 per cent of GDP. In H1 of FY25, the fiscal deficit is estimated at Rs 4.75 lakh crore, or about 29.4 per cent of BE. The fiscal deficit was planned to be financed by raising Rs 11.13 lakh crore from market (G-sec + T-Bills), and the remaining amount of Rs 5 lakh crore from other sources, such as NSSF, State Provident Fund, External debt, draw down of cash balance, etc.

The CNX Nifty is currently trading at 23802.20, up by 74.55 points or 0.31% after trading in a range of 23773.60 and 23854.50. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.05%, SBI Life Insurance up by 1.30%, ONGC up by 0.94%, SBI up by 0.94% and Bharti Airtel up by 0.92%. On the flip side, Tech Mahindra down by 0.58%, Trent down by 0.57%, Britannia down by 0.46%, Asian Paints down by 0.41% and Cipla down by 0.34% were the top losers.

Asian markets are trading mostly higher; Nikkei 225 surged 324.83 points or 0.83% to 39,455.26, Taiwan Weighted strengthened 39.98 points or 0.17% to 23,260.11 and Shanghai Composite added 2.06 points or 0.06% to 3,395.41. On the other hand, Straits Times fell 7.95 points or 0.21% to 3,761.60 and KOSPI was down by 0.19 points or 0.01% to 2,440.33.