The frontline indices ended a volatile session with minor gains on Tuesday. The Nifty 50 index crawled above the 17,650 mark after hitting the day's low of 17,537.55 in the morning trade. Traders were cautious ahead of the presentation of the Union Budget 2023 on Tuesday, 1 February 2023. Global shares declined ahead of upcoming interest rate decision by major global central banks later this week.

The barometer index, the S&P BSE Sensex rose 49.49 points or 0.08% to 59,549.90. The Nifty 50 index added 13.20 points or 0.07% to 17,662.15.

SBI (up 3.48%), M&M (up 3.41%) and Power Grid Corporation of India (up 2.90%) were top Nifty gainers.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index rose 1.47% while the S&P BSE Small-Cap index gained 2.21%.

The market breadth was strong. On the BSE, 2,433 shares rose and 1,066 shares fell. A total of 126 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, tumbled 4.71% to 16.88.

Among the sectoral indices on the NSE, the Nifty PSU Bank index (up 4.28%), the Nifty Media index (up 2.37%) and the Nifty Auto index (up 1.89%) outperformed the Nifty50 index. Meanwhile, the Nifty IT index (down 1.18%) the Nifty Oil & Gas index (down 1.12%) and the Nifty Pharma index (down 0.99%) underperformed the Nifty50 index.

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 deficit (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.

India's services sector witnessed a swift rebound in FY22, growing Year-on-Year (YoY) at 8.4% compared to a contraction of 7.8% in the previous financial year. This swift rebound was driven by growth in the contact intensive services sub-sector which registered sequential growth of 16% driven by the release of pent-up demand, ease of mobility restriction, and near-universal vaccination coverage.

Meanwhile, India's external sector has been facing considerable global headwinds reflecting the geopolitical developments. India's current account balance (CAB) recorded a deficit of US$ 36.4 billion (4.4 per cent of GDP) in Q2FY23 in contrast to a deficit of US$ 9.7 billion (1.3 per cent of GDP) during the corresponding period of the previous year. The widening of the current account deficit (CAD) in the second quarter of FY23 was mainly on account of a higher merchandise trade deficit of US$ 83.5 billion and an increase in net investment income outgo.

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.

Fiscal Deficit:

The government's fiscal deficit widened to Rs 9.93 lakh crore in the April-December period, accounting for 59.8% of the full-year target for 2022-23, data released on 31st January by the Controller General of Accounts showed.

The fiscal deficit in the first nine months of the last financial year was 50.4% of last year's target.

The tax revenue during the April-December period stood at Rs 21.7 lakh crore, which is higher as against Rs 19.2 lakh crore in the corresponding period of FY22. This amounts to 80.3% of the budget estimate for fiscal year 2022-23.

Captial expenditure during the nine-month period ending December 2022 stood at Rs 4.9 lakh crore, as compared to Rs 3.9 lakh crore in the year-ago period.

Numbers to Track:

The yield on India's 10-year benchmark federal paper fell to 7.344 from its close of 7.401 recorded in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.93, compared with its close of 81.52 during the previous trading session.

MCX Gold futures for 3 February 2023 settlement rose 0.02% to Rs 56,793.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.20 to 102.48.

The United States 10-year bond yield declined 0.41% to 3.536.

In the commodities market, Brent crude for March 2023 settlement declined $1.21 or 1.43% to $83.69 a barrel.

Global Markets:

The Dow Jones index futures were down 147 points, indicating a weak opening in the US stocks today.

Markets in Europe and Asia slumped 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.

Adani Enterprises FPO:

The follow-on public offering (FPO) of Adani Enterprises received bids for 5,08,68,136 shares as against an offer size of 4,55,06,791 shares, representing 1.12 times subscription, as at 17:03 IST on Tuesday, 31 January, the third and final day of bidding.

Shares of Adani Enterprises jumped 3.35% to Rs 2,975.

Stocks in Spotlight:

Sun Pharmaceutical Industries fell 1.51%. The drug major reported 5.2% rise in consolidated net profit to Rs 2,166 crore in Q3 FY23 as compared with Rs 2,058.8 crore posted in Q3 FY22. Total sales increased by 13% year on year to Rs 11,100.14 crore in the third quarter.

Sales of formulations in India for Q3 FY23 were at Rs 3391.87 crore, up 7% over Q3 last year. India formulation sales accounted for about 31% of total consolidated sales. Formulation sales in the US were $422 million recording a growth of 6.3% over Q3 last year; accounting for over 31% of total consolidated sales. Taro posted Q3FY23 sales of $139 million, flat over Q3 last year and net profit of US$ 7.3 million, compared to US$ 26.3 million for Q3 last year.

Larsen & Toubro (L&T) added 0.50%. 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 rallied 3.50%. 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 gained 2.96%. 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.

IIFL Finance surged 9.45% after the company's consolidated net profit rose 22.2% to Rs 378.30 crore on 16.3% increase in total income to Rs 2144.56 crore in Q3 December 2022 over Q3 December 2021. The company declared an interim dividend of Rs 4 per share.

Net interest income (NII) jumped 27% year-on-year and 6% quarter-on-quarter to Rs 809.1 crore in Q3 December 2022. IIFL Finance had loan assets under management (loan AUM) of Rs 57,941 crore as at 31 December 2022, with the Home Loans segment constituting 35%, Gold Loans 32%, Loan Against Property 11%, Digital Loans 3% and Microfinance Loans 14% of the total AUM.

Tech Mahindra fell 2.01%. 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 2.45%. 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.

Indian Oil Corporation's (IOCL) rose 0.12%. On a standalone basis, Indian Oil Corporation's (IOCL) net profit tumbled 92.36% to Rs 448.01 crore in Q3 FY23 as against Rs 5,860.80 crore recorded in Q3 FY22. Revenue from operations (excluding excise duty) rose 22.76% to Rs 204,740.20‬ crore in Q3 FY23 from Rs 166,784.61 crore recorded in the same period a year ago.

INOX Leisure added 1.10% after the company reported a consolidated net loss of Rs 40.41 crore in Q3 FY23 as against a net loss of Rs 1.32 crore in Q3 FY22. The multiplex chain operator recorded 73.9% jump in revenue from operations to Rs 515.57 crore in Q3 FY23 as against Rs 296.47 crore posted in the corresponding period last year.

Bajaj Holdings & Investment's (BHIL) declined 2.07%. The company's consolidated net profit increased 23.6% to Rs 1,285.65 crore on a 3% rise in total revenue from operations to Rs 98.41 crore in Q3 FY23 over Q3 FY22.

Century Textiles & Industries jumped 5.06%. The company's consolidated net profit (from continuing operations) tumbled 44.33% to Rs 6.77 crore in Q3 FY23 from Rs 12.16 crore reported in Q3 FY22. Net sales was at Rs 1,149.94 crore in Q3 FY23, up 9.5% as against Rs 1,049.95 crore posted in the corresponding quarter last year.

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