Benchmarks erase losses to trade flat in morning deals

Indian equity benchmarks erased initial losses and were now trading flat in morning deals, amid a subdued trend in global markets. Traders remained cautious with data released by Association of Mutual Funds in India (Amfi) showing that equity mutual funds attracted Rs 8,898 crore in July, a 43 per cent decline compared to the preceding month as markets continued to remain volatile amid concerns over inflation and rate hike expectations. Some concern came with a private report stated that growth in job postings remained flat at 1 per cent in July amidst fears of global recession and inflation, several sectors saw improvement due to digitisation and changing consumer sentiments. However, losses remain capped as some support came with Finance Minister Nirmala Sitharaman’s statement that the Reserve Bank of India (RBI) has taken steps to promote rupee as the preferred currency for global trade. Meanwhile, as per provisional exchange data, foreign institutional investors (FIIs) were net buyers in the Indian capital market as they purchased shares worth Rs 1,449.70 crore on Monday.

On the global front, Asian markets are trading mostly in red ahead of the release of a key inflation reading in the US that would bring more clarity on the course of the Fed's hikes in COVID-era interest rates. Back home, telecom industry’s stocks remained in watch as Minister of State for Telecom Devusinh Chauhan said the long-awaited high-speed 5G services are expected to be rolled out in about a month. Chauhan said India is likely to deploy indigenously developed and manufactured 5G telecom gears by end of this year for 5G services.

The BSE Sensex is currently trading at 58856.76, up by 3.69 points or 0.01% after trading in a range of 58583.36 and 58984.32. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.04%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.97%, Bankex up by 0.32%, Industrials up by 0.30%, Basic Materials up by 0.24% and Healthcare up by 0.09%, while IT down by 0.96%, TECK down by 0.72%, Oil & Gas down by 0.45%, Consumer Durables down by 0.32% and PSU down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.51%, Bharti Airtel up by 1.36%, Sun Pharma up by 1.03%, Indusind Bank up by 0.90% and Larsen & Toubro up by 0.86%. On the flip side, NTPC down by 1.98%, Wipro down by 1.69%, Bajaj Finance down by 1.68%, HCL Technologies down by 1.28% and Infosys down by 1.11% were the top losers.

Meanwhile, in order to promote exports, Finance Minister Nirmala Sitharaman said the Reserve Bank of India (RBI) has taken steps to promote rupee as the preferred currency for global trade. Last month, RBI asked banks to put in place additional arrangements for export and import transactions in Indian rupees in view of increasing interest of the global trading community in the domestic currency.

She mentioned RBI has put in place the arrangement for invoicing, payment, and settlement of exports/imports in INR in order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of global trading community in INR.  The framework allowing invoicing and payments for international trade in INR is applicable for any partner country seeking to undertake trade with India in INR in terms of RBI circular.

As per the RBI circular, the approval process is that for opening of Special INR Vostro accounts, banks of partner countries may approach Authorised Dealer (AD) banks in India which may seek approval from RBI with details of the arrangement. Besides, she also noted that an increase in exports may help reduce the trade deficit.

The CNX Nifty is currently trading at 17522.75, down by 2.35 points or 0.01% after trading in a range of 17442.80 and 17566.10. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.67%, Apollo Hospital up by 1.64%, UPL up by 1.58%, ICICI Bank up by 1.42% and Bharti Airtel up by 1.35%. On the flip side, NTPC down by 2.10%, Adani Ports &SEZ down by 2.03%, ONGC down by 1.72%, Bajaj Finance down by 1.66% and Wipro down by 1.65% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 414.61 points or 2.07% to 19,588.83, Nikkei 225 slipped 204.22 points or 0.73% to 27,795.74, Taiwan Weighted dropped 97.19 points or 0.65% to 14,953.09, Jakarta Composite lost 62.32 points or 0.88% to 7,040.56, KOSPI fell 17.76 points or 0.71% to 2,485.70 and Shanghai Composite declined 12.05 points or 0.37% to 3,235.38.

On the flip side, Straits Times advanced 17.15 points or 0.52% to 3,288.13.