Share markets in India are presently trading marginally lower. Sectoral indices are trading on a mixed note with stocks in the banking sector and auto sector witnessing maximum selling pressure.
The BSE Sensex is trading down by 28 points (down 0.1%), while the NSE Nifty is trading flat. The BSE Mid Cap index is trading up by 0.6%, while the BSE Small Cap index is trading up by 0.4%.
The rupee is trading at 68.59 to the US$.
From the automobile space, Bajaj Auto share price is in focus today as the company clocked its best sales growth in July since 2010.
As per the data, the company sold 4 lakh units last month, an increase of 30% over the same period last year.
This was the twelfth straight month of sales growth for Bajaj Auto.
The company's motorcycle sales rose 25% on a yearly basis to 3.32 lakh units, while commercial vehicle segment clocked its highest-ever monthly sales in July, rising 59% year-on-year to 67,663 units.
The company's exports outpaced domestic sales on an overall basis. The automaker exported 1.6 lakh vehicles last month, an increase of 34% from the corresponding month in 2017 compared to the local market sales growth of 27%. The company exported 1.3 lakh motorcycles last month, an increase of 31% from the sales closed in July 2017.
At the time of writing, Bajaj Auto share price was trading up by 1.1% on the BSE.
In the news from macroeconomic space, as per a leading financial daily, fiscal deficit at the end of first three months of the current financial year widened to 69% of the full-year budget target. This compares with 80.8% a year ago.
The data is a mild improvement compared to the year-ago period but also poses concerns about the state of public finances in the months ahead.
As per the government data, net tax receipts in the first quarter of FY19 were Rs 2.37 trillion.
India expects to trim the deficit to 3.3% of GDP this fiscal year, after meeting an upwardly revised fiscal deficit target of 3.5% of GDP in FY18.
Note that the government missed its fiscal deficit target for FY18 by 30 basis points. Against a target of 3.2%, the government managed to keep fiscal deficit at 3.5% in FY18. It has now outlined the projected fiscal deficit target of 3.3% in FY19 in its budget.
Steady Decline in Fiscal Deficit Over the Years
Maintaining this deficit target in FY19 won't be easy. Fiscal deficit basically means the amount a government earns minus the amount it has to spend. The lesser the fiscal deficit, the better the government has performed.
In the past, the government has relied on reducing expenditure to keep the fiscal deficit in check.
For this year, the government is banking on earning much more than it has in the past. It expects a major portion of the revenue to be collected through GST tax collections. Also, the recent rise in crude oil prices has cast a doubt over how much the government will be to curb its spending.
The dual pressure of increasing expenditure and lower inflows makes this FY19 deficit target an uphill challenge.
In other news, India's manufacturing activity improved at a slower pace in July on the back of moderate growth in output, new orders and employment.
According to a statement by IHS Markit, the Nikkei India Purchasing Managers Index fell to 52.3 in July, from 53.1 in the previous month. A reading below 50 indicates contraction in activity, while a number above it signals expansion.
Manufacturing activity in India has remained above the 50-point-mark for the twelfth consecutive month. The activity had improved at the fastest pace in the year so far in June.
It would be interesting to see how the factory activity pans out in the coming months. We will keep you updated on the developments from this space.
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