Domestic indices trade tad lower in early deals; Fed policy outcome eyed

Indian equity benchmarks made cautious start on Wednesday tracking mixed global cues. Markets are hovering below neutral lines with marginal cuts in early deals. Selling in Metal and Telecom stocks weighted on the sentiments, whereas buying in Auto and Utilities stocks limit the downside. Some cautiousness came in as foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 4,502.25 crore on June 14, data available with NSE suggested. However, downside remained capped as Chief Economic Adviser (CEA) V Anantha Nageswaran said India would become a $5 trillion economy by 2026-27 and $10 trillion by 2033-34. Nageswaran said India is relatively better placed than other emerging economies. Besides, the fourth annual report on the Periodic Labour Force Survey (PLFS) conducted during July 2020 and June 2021 by the NSO, the unemployment rate fell to 7.5% in the current weekly status (CWS, unemployment over the past week) in the period from 8.8% in the previous two years and 8.9% in 2017-18.

On the global front, Asian markets are trading mixed following the mostly negative cues overnight from global markets, with investors largely making cautious moves ahead of the U.S. interest rate decision later in the day. The Fed is expected to hike interest rates by 50 basis points, although forecasts are suggesting a 75-bp increase. Back home, edible oil industry stocks were in focus as Solvent Extractors Association (SEA) said India's palm oil imports declined by 33.20 per cent to Rs 5,14,022 tonne during May this year, but there was sharp rise in shipment of RBD palmolein oil by refineries. In stock specific movement, TV18 broadcast rose after Viacom 18 bagged the digital rights for IPL. 

The BSE Sensex is currently trading at 52603.75, down by 89.82 points or 0.17% after trading in a range of 52540.32 and 52819.79. There were 17 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.29%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were Auto up by 0.92%, Utilities up by 0.44%, Consumer Discretionary up by 0.44%, Industrials up by 0.33%, Power up by 0.25%, while Metal down by 0.95%, Telecom down by 0.58%, FMCG down by 0.32%, Energy down by 0.30%, Consumer Durables down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.63%, Mahindra & Mahindra up by 1.60%, Bajaj Finance up by 1.05%, Maruti Suzuki up by 0.89% and SBI up by 0.69%. On the flip side, Tata Steel down by 3.84%, Hindustan Unilever down by 1.69%, Reliance Industries down by 0.66%, Indusind Bank down by 0.66% and Bharti Airtel down by 0.49% were the top losers.

Meanwhile, expressing optimism over India’s economy, Chief Economic Adviser (CEA) V Anantha Nageswaran has said the country would become a $5 trillion economy by 2026-27 and $10 trillion by 2033-34. He said India is relatively better placed than other emerging economies. He added ‘on the face of it, looks optimistic, even ambitious, but if we get to $5 trillion by 2026-27’.

He said ‘we are now $3.3 trillion, it is not such a difficult target to reach. Then if you simply assume 10 per cent nominal GDP growth in dollar terms, then you get to $10 trillion by 2033-34 and another doubling with the same rate’.

The CEA said there is a need for climate tagging of the budget. He noted ‘GDP is the worst measure of economic activities but for all others. Because everything else you take, comes with their own limitations and serious subjectivity’.

Nageswaran said India will have to start investing in getting the right supply of metals and minerals required to fuel the energy transition. Besides, India’s economy grew 8.7 per cent in the last fiscal (2021-22) against a 6.6 per cent contraction in the previous year.

The CNX Nifty is currently trading at 15710.25, down by 21.85 points or 0.14% after trading in a range of 15687.55 and 15780.15. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 1.60%, Mahindra & Mahindra up by 1.55%, Tata Motors up by 1.46%, Bajaj Finance up by 0.96% and Maruti Suzuki up by 0.82%. On the flip side, Tata Steel down by 3.80%, Hindustan Unilever down by 1.66%, BPCL down by 1.19%, Coal India down by 1.04% and Indusind Bank down by 0.79% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 210.67 points or 0.79% to 26,419.19, Taiwan Weighted fell 16.79 points or 0.10% to 16,030.58, KOSPI lost 39.77 points or 1.60% to 2,453.20 and Jakarta Composite declined 48.00 points or 0.68% to 7,001.88. On the other hand, Straits Times rose 15.76 points or 0.51% to 3,124.65, Hang Seng jumped 310.31 points or 1.47% to 21,378.30 and Shanghai Composite was up by 46.21 points or 1.41% to 3,335.12.