Domestic indices come off opening highs to trade flat in early deals

Benchmark indices started Thursday's session on a fairly positive note as Russia Ukriane conflict concerns eased. But, failed to hold the gains and came off their opening highs soon to trade flat in early deals as selling pressure mounted on banking stocks, especially. Volatility could be the hallmark in today’s session until investors are certain that Russia will not invade Ukraine. Some cautiousness came in as Acuite Ratings & Research said India’s FY22 current account deficit faces mild upside risk from high commodity prices. The wider merchandise trade deficits pulled India's Q2FY22 current account into the negative territory. Though, downside remained capped as the finance ministry said with the muted impact of the third wave of the pandemic on economic activity, the Indian economy may undergo an economic reset by end of the year, clocking 9 per cent growth in 2021-22 (FY22) and around 8 per cent in 2022-23 (FY23).

On the global front, most of the Asian makers are trading higher despite the mostly negative cues overnight from US markets, amid a spike in crude oil prices and as traders reacted to some upbeat corporate earnings news and easing geopolitical concerns following news of some Russia troops being pulled back from the Ukrainian border. There are hopes that a diplomatic solution can be found to avoid a Russian invasion of Ukraine.

Back home, Edible oil industry stocks were in focus as industry body SEA said the country's oilmeal export declined by 65 per cent year-on-year to 1.76 lakh tonnes in January this year, mainly due to fall in shipments of soyabean and rapeseed meal. In January 2021, the country's oilmeal export stood at 5.01 lakh tonnes. In scrip specific development, Hikal was down after the company received a notice from the Maharashtra Pollution Control Board for closure of Taloja unit within 72 hours.

The BSE Sensex is currently trading at 57926.09, down by 70.59 points or 0.12% after trading in a range of 57748.47 and 58346.00. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.12%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Power up by 1.43%, Utilities up by 1.32%, Auto up by 0.73%, Oil & Gas up by 0.71%, Energy up by 0.60%, while Bankex down by 0.64%, Telecom down by 0.21%, TECK down by 0.13%, IT down by 0.10%, FMCG down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 0.87%, Titan Co up by 0.67%, Reliance Industries up by 0.64%, Mahindra & Mahindra up by 0.57% and NTPC up by 0.53%. On the flip side, Indusind Bank down by 1.09%, Axis Bank down by 0.90%, ICICI Bank down by 0.75%, HDFC Bank down by 0.53% and Ultratech Cement down by 0.46% were the top losers.

Meanwhile, Reserve Bank of India (RBI) article on the 'State of Economy' published in February bulletin has stated that the 2022-23 Budget proposals and the recent monetary policy announcements have set the tone for a durable and broad-based economic revival which has started gaining traction as the nation emerges from the third wave of the COVID-19 pandemic. The article also emphasised that the domestic economic situation continues to improve, the unsettled global environment notwithstanding. It noted that the renewed emphasis on public investment in the Budget through infrastructure development is expected to crowd-in private investment and strengthen job creation and demand in 2022-23.

It said ‘Fundamental to the infrastructure boost is the GatiShakti National Master Plan, which aims to achieve inclusive growth through multi-modal connectivity and logistics efficiency’. Observing that domestic macroeconomic conditions are striking a path that is diverging from global developments, the article said in India, the recovery in economic activity is gaining strength and traction as it emerges from the third wave. It said ‘both manufacturing and services remain in expansion with optimism on demand parameters and uptick in consumer and business confidence. As businesses return to a new normal, the job landscape is expected to improve’.

It further said that today, the global economy stands at an inflection point. Inflation has become entrenched across economies, owing to a spike in commodity prices and persistence of supply chain bottlenecks. It added that ‘the global macroeconomic situation remains embroiled in a heightened state of uncertainty, with risks tilted to the downside’. With inflation projected to stay within the tolerance band in 2022-23, the Monetary Policy Committee (MPC) decided to pause and persevere with an accommodative policy stance. RBI Governor Shaktikanta Das emphasised that monetary policy would continue in its endeavour to achieve price stability, while ensuring a strong and sustained economic recovery.

The CNX Nifty is currently trading at 17341.25, up by 19.05 points or 0.11% after trading in a range of 17266.70 and 17442.90. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.99%, Hero MotoCorp up by 1.97%, Tata Motors up by 1.73%, Tata Consumer Products up by 1.65% and ONGC up by 1.25%. On the flip side, Axis Bank down by 0.87%, Indusind Bank down by 0.83%, Ultratech Cement down by 0.57%, Britannia Industries down by 0.52% and ICICI Bank down by 0.50% were the top losers.

Asian markets are trading mostly in green; Straits Times rose 15.67 points or 0.46% to 3,454.97, Hang Seng advanced 48.10 points or 0.19% to 24,767.00, Taiwan Weighted surged 94.31 points or 0.52% to 18,325.78, KOSPI added 8.36 points or 0.31% to 2,738.04 and Shanghai Composite was up by 11.99 points or 0.35% to 3,477.82. On the other hand, Nikkei 225 fell 360.27 points or 1.31% to 27,100.13 and Jakarta Composite was down by 29.63 points or 0.43% to 6,820.57.