Benchmarks continue to trade flat; RBI keeps repo rate unchanged at 4%

Indian equity benchmarks continued to trade flat in morning deals, after the Reserve Bank of India (RBI) kept the key repo rate unchanged, maintaining the status quo and its accommodative stance. It raised inflation projections for FY23 to 5.7 per cent from 4.5 per cent, while downgrading real GDP estimates to 7.2 per cent.  Traders remained cautious as the finance ministry said the current elevated level of international crude price, should it persist for a long time, may come in the way of India achieving a real economic growth rate of 8%-plus in FY23 and pose upside risks to inflation as well. However, losses remain capped as traders took some support with a private report that with the e-way bills generated for inter-state trade in goods under the goods and services tax (GST) regime touching a record in March, the monthly GST collections will likely hit an all-time high of around Rs 1.5 trillion in April (March transactions).

On the global front, Asian markets were trading mostly in red amid anxiety ahead of RBI's monetary policy committee meeting against the backdrop of surging inflation. Back home, stocks related to logistics sector remained in watch as Credit ratings agency ICRA in its latest report stated that the logistics sector is projected to record a growth of 7-9 per cent in the current fiscal (FY23) but the industry players' margins are likely to remain ‘sensitive to risks’ stemming from a continued rise in oil and commodity prices amid the Russia-Ukraine conflict.

The BSE Sensex is currently trading at 58979.85, down by 55.10 points or 0.09% after trading in a range of 58876.36 and 59297.46. There were 18 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.59%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Power up by 1.08%, Utilities up by 1.02%, Basic Materials up by 0.98%, Metal up by 0.96%, Energy up by 0.87% while, Healthcare down by 0.28%, TECK down by 0.24%, IT down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 0.92%, Tata Steel up by 0.91%, Titan Co up by 0.81%, Wipro up by 0.71% and Reliance Industries up by 0.70%. On the flip side, Tech Mahindra down by 1.22%, HDFC down by 1.19%, Sun Pharma down by 1.03%, HDFC Bank down by 0.95% and TCS down by 0.92% were the top losers.

Meanwhile, the finance ministry has said 10 states were given the permission to borrow an additional Rs 28,204 crore in last financial year (FY22) for undertaking power sector reforms. The 10 states are Andhra Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Odisha, Rajasthan, Sikkim, Tamil Nadu and Uttar Pradesh.

The ministry stated that in the financial year 2022-23 too, the states can avail the facility of additional borrowing linked to reforms in power sector. An amount of Rs 1,22,551 crore will be available as incentive to the states for undertaking these reforms in 2022-23.
The ministry, based on the recommendations of 15th Finance Commission, had decided to grant additional borrowing space of upto 0.5 per cent of the Gross State

Domestic Product (GSDP) to the states every year for a four year period from 2021-22 to 2024-25 based on the reforms undertaken by them in the power sector.
The objective of granting financial incentives as additional borrowing permissions for taking up reforms in power sector are to improve the operational and economic efficiency of the sector, and promote a sustained increase in paid electricity consumption.

The CNX Nifty is currently trading at 17637.55, down by 2.00 points or 0.01% after trading in a range of 17600.55 and 17723.60. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 1.83%, SBI Life Insurance up by 1.65%, UPL up by 1.51%, Coal India up by 1.49% and JSW Steel up by 1.46%. On the flip side, Cipla down by 2.67%, Tech Mahindra down by 1.26%, HDFC down by 1.13%, Sun Pharma down by 1.10% and HDFC Bank down by 0.96% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 124.54 points or 0.57% to 21,684.44, Straits Times trembled 26.30 points or 0.77% to 3,377.93, KOSPI fell 1.92 points or 0.07% to 2,693.94, Shanghai Composite declined 1.88 points or 0.06% to 3,234.82.

On the flip side, Nikkei 225 surged 10.08 points or 0.04% to 26,898.65, Jakarta Composite soared 61.41 points or 0.86% to 7,188.78 and Taiwan Weighted strengthened 78.06 points or 0.45% to 17,256.69.