Benchmarks pare all losses; Economic Survey pegs FY23 GDP growth at 7%

The domestic equity benchmarks managed to pare all losses and traded above the flat line in afternoon trade. The Nifty traded above the 17,650 mark. European markets and their Asian peers, however, traded in the red.

At 13:28 IST, the barometer index, the S&P BSE Sensex, was up 22.9 points or 0.04% to 59,523.31. The Nifty 50 index added 8.95 points or 0.05% to 17,657.90.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index rose 1.25% while the S&P BSE Small-Cap index gained 1.86%.

The market breadth was strong. On the BSE, 2,324 shares rose and 1,096 shares fell. A total of 133 shares were unchanged.

Investors were cautious ahead of upcoming interest rate decision by the US Federal Reserve, Bank of England and European Central Bank later this week in an effort to tame the inflation.

Economic Survey 2023:

Union finance minister Nirmala Sitharaman today tabled the Economic Survey 2023 in the Parliament. The government has projected that India will remain the fastest growing major economy in the world with a GDP growth forecast of 7% in FY23 and 6-6.8% in FY24.

The Survey further highlighted that the challenge to rupee depreciation persists with the likelihood of further interest rate hikes by the US Fed. CAD may continue to widen as global commodity prices remain elevated, economic growth momentum stays strong. Rupee may come under pressure if current account defict (CAD) widens.

It further stated that the RBI projection of 6.8% inflation this fiscal outside the upper target limit, not high enough to deter private consumption, also not too low to weaken inducement to invest. Borrowing cost may remain `higher for longer`, entrenched inflation may prolong tightening cycle.

Economy:

The International Monetary Fund (IMF) has retained its GDP growth forecasts for India for 2022-23 and 2023-24 at 6.8% and 6.1%, respectively. Growth in India is set to decline from 6.8% in 2022-23 to 6.1% in 2023-24 before picking up to 6.8% in 2024-25, with resilient domestic demand despite external headwinds, the IMF said in an update to its World Economic Outlook report.

Stocks in Spotlight:

Larsen & Toubro (L&T) declined 0.52%. The EPC major posted a consolidated net profit of Rs 2,553 crore in Q3 FY23, registering a growth of 24% from Rs 2,055 crore recorded in Q3 FY22. The conglomerate recorded revenues of Rs 46,390 crore for the quarter ended 31 December 2022, recording a YoY growth of 17%.

Ambuja Cements zoomed 6.40%. With reference to the news item dated 30 January 2023 captioned "Adani Group said to plan Rs 3000 cr Ambuja, APSEZ buybacks", the cement major clarified to the stock exchanges that there was no such plan and hence, it was not in a position to comment on the veracity of said media report.

Ultratech Cement rose 2.42%. The cement major said that UltraTech Cement Middle East Investments has entered into a share sale and purchase agreement with Seven Seas Company LLC, Oman, for acquisition of 70% equity shares in Duqm Cement Project International. UltraTech Cement Middle East Investments is Ultratech`s wholly owned subsidiary in UAE.

Tech Mahindra fell 2.37%. On a consolidated basis, the IT major`s net profit rose marginally to Rs 1,296.6 crore in Q3 FY23 as against Rs 1,285.4 crore posted in Q2 FY23. Revenue from operations grew 4.61% quarter on quarter (QoQ) to Rs 13,734.6 crore in quarter ended 31 December 2022.

BPCL added 2.66%. BPCL posted a consolidated net profit of Rs 1959.58 crore in Q3 FY23 from Rs 2828.45 crore recorded in Q3 FY22. Total income rose to Rs 133783.39 crore in Q3 FY23 from Rs 118166.92 crore recorded in Q3 FY22.

Global Markets:

Markets in Europe and Asia declined across the board on Tuesday as attention turns to the U.S. Federal Reserve`s latest policy meeting that starts later today on the States` side.

Investors widely expect a 25 basis point increase, but will monitor commentary for clues about how much further the Fed intends to hike, or when it plans to cut rates. The Fed will announce its interest rate decision Wednesday.

European markets will be keeping an eye on fourth-quarter eurozone gross domestic product data that will be published Tuesday, for a gauge on the region`s state of health. Preliminary German and French inflation data for January is also due to be released.

US stocks traded lower Monday, pausing a January rally as investors braced for the busiest week of earnings season and a possible interest rate hike from the Federal Reserve.

The Federal Open Market Committee meets on Tuesday and Wednesday, when the Fed is expected to hike rates by one-quarter of a percentage point. Investors will be looking for clues about how much higher the central bank will take rates in the fight against inflation.

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