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Sensex, Nifty stage recovery in early noon deals
Dec-05-2022

Indian equity benchmarks staged sharp recovery in early afternoon deals, with both Sensex and Nifty trading near neutral lines, aided by positive cues from other Asian markets and heavy buying at Metal and Realty counters. Traders took support with Economic Advisory Council member Sanjeev Sanyal’s statement that India is capable of sustaining an economic growth of 9 per cent for many years, even as he asserted that a high sustained GDP growth rate is key for the world to achieve the 2030 Sustainable Development Goals (SDGs). He said India has a per capita income of only $2,200 and that has been achieved after several years of very high growth rate.

Adding more relief among traders, the government is mulling exempting early stage startups from complying with norms under proposed Digital Personal Data Protection bill. The exemption may be for a limited period to assist startups in developing their business models and to ensure that innovation is not stifled due to compliance burden. Besides, a private report stated that Foreign investors have upgraded India as a dedicated allocation in their investment portfolios given the strong economy, stable government and significant reforms undertaken over the last eight years.

On the global front, Asian markets were trading mostly in green, even after the services sector in China continued to contract in November, and at a faster pace, with a PMI score of 46.7. That's down from 48.4 in October and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. Efforts to curb the spread of COVID-19 amid a notable rise in case numbers in recent weeks, weighed on service sector business operations and customer demand across China during November.

The BSE Sensex is currently trading at 62860.27, down by 8.23 points or 0.01% after trading in a range of 62507.88 and 62939.63. 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 by 0.11%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Metal up by 1.88%, Realty up by 0.71%, PSU up by 0.63%, Industrials up by 0.26% and Bankex up by 0.21%, while Oil & Gas down by 0.31%, Healthcare down by 0.31%, Energy down by 0.24%, IT down by 0.23% and Auto down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.54%, Indusind Bank up by 1.24%, SBI up by 1.18%, NTPC up by 0.99% and Asian Paints up by 0.53%. On the flip side, Tech Mahindra down by 0.74%, Ultratech Cement down by 0.71%, Dr. Reddy's Laboratories down by 0.65%, TCS down by 0.53% and Sun Pharma down by 0.42% were the top losers on the Sensex.

Meanwhile, ICRA Ratings in its latest report said that Capital expenditure (capex) of 18 states has risen just 2.2 per cent in the first half of the current fiscal (H1FY23) even as their combined revenue deficit has narrowed to more than one-fourth from the year-ago period. These states have budgeted a combined capital outlay of Rs 6.2 lakh crore for this fiscal.

The report stated that this means that to use the budgeted outlay their spending will have to jump by 57 per cent (or by 4.6 lakh crore) in the second half of the fiscal to meet the 37.8 per cent increased capex, which looks ambitious and thus the states are going to miss the capital outlay target by a sizeable extent. But these states have collectively spent only Rs 1.59 lakh crore so far this fiscal, which is just about a growth of 2.2 per cent annualised.

According to the report, revenue deficits of these 18 states have narrowed to a low Rs 30,000 crore in the first half of the current fiscal from Rs 1.3 lakh crore in the corresponding period in FY22. This revenue tailwind comes in spite of these states budgeting for a combined revenue deficit to Rs 1.4 lakh crore in FY23 from Rs 1.1 lakh crore in FY22. Despite this, their combined capital outlay rose by a muted 2.2 per cent in H1, sharply lower than the high 37.8 per cent growth indicated in their budgets, necessitating a sharp 57 per cent increase in H2 to achieve the target.

The CNX Nifty is currently trading at 18700.75, up by 4.65 points or 0.02% after trading in a range of 18591.35 and 18728.60. There were 22 stocks advancing against 27 stocks declining, while one stock remained unchanged on the index.

The top gainers on Nifty were Hindalco up by 3.21%, Tata Steel up by 2.50%, UPL up by 2.19%, JSW Steel up by 1.86% and ONGC up by 1.49%. On the flip side, Adani Enterprises down by 1.77%, Tata Motors down by 0.94%, Tech Mahindra down by 0.80%, Ultratech Cement down by 0.77% and Apollo Hospital down by 0.71% were the top losers on Nifty.

Asian markets were trading mostly in green; Hang Seng increased 779.97 points or 4.18% to 19,455.32, Shanghai Composite gained 52.93 points or 1.68% to 3,209.07, Nikkei 225 surged 42.50 points or 0.15% to 27,820.40, Straits Times advanced 17.22 points or 0.53% to 3,276.36 and Taiwan Weighted strengthened 10.06 points or 0.07% to 14,980.74, while KOSPI fell 15.01 points or 0.62% to 2,419.32 and Jakarta Composite lost 16.62 points or 0.24% to 7,003.02.
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