Sensex, Nifty remain near neutral lines in late morning session

Indian equity benchmarks remained near their neutral lines, with both Sensex and Nifty trading marginally lower, on the back of negative cues from other Asian markets. Traders remained cautious, as Reserve Bank of India Governor Shaktikanta Das, while estimating India's overall retail inflation for FY23 at 6.7 per cent, said that the 75 per cent of the increase in inflation projections can be attributed to the food group.

However, downside remained capped, after Finance Minister Nirmala Sitharaman said enabling policies and proactive steps taken by the government - including corporate tax cuts and digitisation of the economy - helped the country deal with the unprecedented situation arising due to the pandemic.

On the global front, Asian markets were trading mostly in red, even after China's exports logged a double-digit growth in May as operations resumed in the Shanghai port after coronavirus-linked lockdowns. Exports advanced 16.9 percent from a year ago, following a 3.9 percent rise in April, the General Administration of Customs said.

The BSE Sensex is currently trading at 54887.33, down by 5.16 points or 0.01% after trading in a range of 54507.41 and 55010.89. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.14%, while Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were Energy up by 1.18%, Telecom up by 0.88%, Oil & Gas up by 0.87%, Healthcare up by 0.26% and Auto up by 0.15%, while Metal down by 1.75%, Basic Materials down by 1.14%, Realty down by 0.65%, Bankex down by 0.47% and Industrials down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 2.88%, Maruti Suzuki up by 1.33%, Reliance Industries up by 1.26%, Bharti Airtel up by 0.76% and ITC up by 0.60%. On the flip side, Tata Steel down by 2.98%, Asian Paints down by 1.64%, SBI down by 1.45%, Bajaj Finance down by 1.42% and Ultratech Cement down by 1.33% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Anantha Nageswaran has said that the impact of structural reforms, like Goods and Services Tax (GST) and Insolvency and Bankruptcy Code (IBC), will help boost India's growth once the cloud of the pandemic and geopolitical conflict recedes. He said India is right now in a situation where the economy faces a considerable amount of challenges both from global macro monetary policies and political developments.

CEA said ‘I also implore you to look beyond current concerns about inflation… India has emerged out of the previous decade with its financial system well repaired, improved and balance sheet strengthened...not just in the banking and financial sector, (but also in the corporate sector)’. He noted that some of these structural reforms under the government...reforms such as Goods and Services Tax, Insolvency and Bankruptcy Code (IBC), etc might have been temporarily overshadowed by external events such as the pandemic and now the geopolitical conflict. However, once these clouds recede they will begin to manifest and enhance India's growth.

He further said this year India will be facing challenges of managing sustainable high growth, moderating inflation, keeping fiscal deficit under the balance, and also ensuring that the external value of the Indian rupee remains the same. He asserted that there is no pre-programmed road map or menu of options that will help the country deal with these challenges, though the finance ministry is well-prepared to tackle any such situation.

The CNX Nifty is currently trading at 16350.30, down by 5.95 points or 0.04% after trading in a range of 16243.85 and 16393.85. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.95%, ONGC up by 1.93%, Bajaj Auto up by 1.57%, Maruti Suzuki up by 1.39% and Reliance Industries up by 1.27%. On the flip side, Tata Steel down by 2.97%, Hindalco down by 2.26%, Shree Cement down by 2.13%, Grasim Industries down by 1.86% and Asian Paints down by 1.64% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 17.16 points or 0.53% to 3,246.63, Straits Times trembled 13.23 points or 0.41% to 3,212.57, Hang Seng decreased 78.43 points or 0.36% to 21,936.16, KOSPI fell 2.48 points or 0.09% to 2,623.67 and Taiwan Weighted dropped 67.60 points or 0.41% to 16,602.91. On the flip side, Nikkei 225 surged 124.73 points or 0.44% to 28,359.02 and Jakarta Composite soared 58.69 points or 0.82% to 7,252.00.