Sensex, Nifty trade flat with negative bias in early deals amid foreign fund outflow

Indian equity benchmarks made flat-to-positive start on Friday, but soon slipped below neutral lines, following the broadly negative cues from global markets overnight and weakness in Asian counterparts, as traders pondered the near term US monetary policy path after Federal Reserve officials suggested that interest rates may need to stay higher for longer even as inflation shows early signs of easing. Sensex and Nifty are trading flat with negative bias in early deals amid selling at IT, TECK and Healthcare counters. Persistent foreign fund outflow also weighed on market sentiments. Foreign institutional investors continued to sell Indian equities, with net sales of Rs 776 crore worth of shares on May 16.

However, downside remained capped as Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal said India will be a $4 trillion economy in 2024-25 and surpass Japan by early next fiscal to become the world's fourth largest economy. Also, the United Nations revised upwards India's growth projections for 2024, with the country's economy now forecast to expand by close to seven per cent this year, mainly driven by strong public investment and resilient private consumption. 

On the sectoral front, the aviation industry stocks are in focus as rating agency Icra said air passenger traffic in the country is projected to touch record levels in the range of 407-418 million in the current financial year and the revenues of select airport operators together are estimated to rise 15-17 per cent during the same period. 

The BSE Sensex is currently trading at 73615.31, down by 48.41 points or 0.07% after trading in a range of 73459.80 and 73742.65. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.61%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Auto up by 1.59%, Consumer Durables up by 1.31%, Consumer Disc up by 1.15%, Basic Materials up by 0.60% and Telecom up by 0.56%, while IT down by 0.48%, TECK down by 0.39%, Healthcare down by 0.13%, Bankex down by 0.12% and FMCG down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 6.67%, Tata Motors up by 1.30%, Ultratech Cement up by 0.55%, SBI up by 0.47% and NTPC up by 0.44%. On the flip side, Wipro down by 0.82%, Bajaj Finserv down by 0.79%, Nestle down by 0.78%, Hindustan Unilever down by 0.78% and Indusind Bank down by 0.77% were the top losers.

Meanwhile, Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal expressing optimism over the India’s economic growth has said that the country will be a $4 trillion economy in 2024-25 and surpass Japan by early next fiscal to become the world's fourth largest economy. He further said that a 7 per cent economic growth rate will be a 'very good' growth rate for India, given various constraints, including the country's weak exports. He said ‘So, this financial year, we will become a $4 trillion economy’. 

Currently, in US dollar terms, India is the fifth largest economy with a size of about $3.7 trillion in nominal terms. He said Japan is now just a little ahead of us at $4.1 trillion. He added ‘So, either very early next year or even you know this year, we will cross Japan to become the world's fourth largest economy’. According to him, Germany is a $4.6 trillion economy and it is not growing, so makes it a static target. He said ‘Maybe in two years, we will go past Germany. So, I think in terms of becoming the world's third largest economy, we are reasonably now close to the target’.

Sanyal argued that the government should not push any fiscal move to accelerate economic growth to 8-9 per cent. He said compounding of growth is the single most important thing as this will generate jobs and taxes. About the internationalisation of the rupee, he said it is about converting the rupee into a hard currency. He said India's limited purpose is to convert the rupee into a hard currency over the next decade in terms of its wider usage as the currency in which people trade, in particular, the country's own trade.

The CNX Nifty is currently trading at 22386.20, down by 17.65 points or 0.08% after trading in a range of 22345.65 and 22431.25. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 6.68%, Grasim Industries up by 1.68%, Tata Motors up by 1.29%, ONGC up by 0.83% and Coal India up by 0.58%. On the flip side, Adani Ports & SEZ down by 1.20%, SBI Life Insurance down by 0.93%, Cipla down by 0.91%, Nestle down by 0.89% and Britannia Industries down by 0.87% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 145.46 points or 0.37% to 38,774.80, Taiwan Weighted lost 62.79 points or 0.29% to 21,241.47, KOSPI dropped 26.84 points or 0.97% to 2,726.16, Straits Times fell 8.59 points or 0.26% to 3,296.40 and Shanghai Composite weakened 3.13 points or 0.1% to 3,119.27. On the other hand, Jakarta Composite rose 88.39 points or 1.22% to 7,335.09 and Hang Seng was up by 56.61 points or 0.29% to 19,433.14.