Indian Equity Benchmarks End Higher Amid Cautious Start and Positive Sentiments

Strategic Insights -

Indian equity benchmarks ended higher by around a percent on Tuesday, led by heavy buying in index majors Larsen & Toubro, Hindustan Unilever, and HDFC. The Reserve Bank of India's (RBI) report stating that states' gross fiscal deficit (GFD) is budgeted to decline from 4.1 per cent of gross domestic product (GDP) in Covid-hit 2020-21 to 3.4 per cent of GDP in 2022-23 showed improvement in their fiscal health. A private report stated that nearly six in 10 corporate heads in India (57 per cent) are optimistic about the country's growth prospects in 2023. Markets also saw some support from the ongoing negotiations of India for the proposed comprehensive free trade agreements with the UK and European Union (EU). However, concerns arose with the provisional data available on the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 750.59 crore, continuing selling for the 17th consecutive session.

Key Takeaways:

  • The BSE Mid cap index fell 0.06%, while Small cap index was down by 0.13%
  • Reserve Bank of India's (RBI) report stated that states' gross fiscal deficit (GFD) is budgeted to decline from 4.1 per cent of gross domestic product (GDP) in Covid-hit 2020-21 to 3.4 per cent of GDP in 2022-23
  • Nearly six in 10 corporate heads in India (57 per cent) are optimistic about the country's growth prospects in 2023, according to a private report
  • Markets saw some support from the ongoing negotiations of India for the proposed comprehensive free trade agreements with the UK and European Union (EU)
  • The Reserve Bank of India (RBI) advised states to continue to focus on creating a congenial ecosystem for greater private investments
  • The RBI also stated that increased allocations for sectors like health, education, infrastructure, and green energy transition can help expand productive capacities if states mainstream capital planning

Statistics:

  • The BSE Sensex rose 562.75 points or 0.94% to 60,655.72
  • The CNX Nifty was up by 158.45 points or 0.89% to 18,053.30
  • Foreign institutional investors (FIIs) net sold shares worth Rs 750.59 crore, continuing selling for the 17th consecutive session
  • 57% of corporate heads in India are optimistic about the country's growth prospects in 2023
  • States' gross fiscal deficit (GFD) is budgeted to decline from 4.1 per cent of gross domestic product (GDP) in Covid-hit 2020-21 to 3.4 per cent of GDP in 2022-23

Sources:

  • Reserve Bank of India (RBI)
  • Private report by Accord Fintech
  • Contify.com
  • Economic Times