Sensex, Nifty end flat with a positive bias

Indian equity benchmarks, after fluctuating between gains and losses, ended flat with a positive bias on Wednesday. Markets made cautious start and traded volatile for whole day, as traders got anxious with Standard and Poor’s (S&P) stating that credit profiles could deteriorate for up to $114 billion of debt in the books of Indian companies tackling rising interest rates and inflation. Some concern also came as Securities and Exchange Board of India (Sebi) in its latest data showed that investment through participatory notes (P-notes) in the domestic capital market declined to Rs 75,725 crore at the end of July, the lowest level in nearly two years, mainly in the wake of aggressive rate hikes by the US Fed. This also marks the third consecutive monthly decline in investment numbers. Traders took note of report that the Sebi has imposed prudential limits on investments by portfolio managers in their own associates or related parties.

However, key gauges managed to close with modest green in a highly volatile session, taking support from Commerce Secretary BVR Subrahmanyam’s statement that India's merchandise exports are likely to be around $470-480 billion in the current fiscal against $420 billion in 2021-22. Traders also took some solace as ICRA in its latest report projected India’s Gross Domestic Product (GDP) growth at 13.0% for first quarter (April-June) of current fiscal year (FY23) a sharp jump from the 4.1% in Q4 FY22. It has also projected the year-on-year (YoY) growth of the gross value added (GVA) at basic prices (at constant 2011-12 prices) in Q1 FY23 at 12.6%, a jump from 3.9% recorded in Q4 FY22.  Some optimism came in as SBI Ecowrap report stated that India's GDP is expected to be much higher in Q1FY23 and growth is expected around 15.7 per cent with a large possibility of an upward bias because several indicators have shown good progress in the Indian economy.

On the global front, Asian markets settled mostly lower on Wednesday following the broadly negative cues from global markets, as traders remain concerned over an economic slowdown and the outlook for interest rates. They remain cautious ahead of the US Fed Chair Jerome Powell's speech at the central bank's annual Jackson Hole economic symposium in Wyoming on Friday, where central bankers across the globe will update their views on inflation and policy outlook. European markets were trading in red as investors fretted over a worsening energy crisis and hawkish comments from Fed officials on the pace of future rate rises.

Finally, the BSE Sensex rose 54.13 points or 0.09% to 59,085.43 and the CNX Nifty was up by 27.45 points or 0.16% to 17,604.95.

The BSE Sensex touched high and low of 59,170.87 and 58,760.09, respectively. There were 15 stocks advancing against 15 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.80%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Realty up by 1.74%, Industrials up by 0.92%, Telecom up by 0.91%, Capital Goods up by 0.80%, Bankex up by 0.67% while, IT down by 0.18%, TECK down by 0.15%, Consumer Durables down by 0.13%, Oil & Gas down by 0.10%, Auto down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.86%, NTPC up by 1.29%, Larsen & Toubro up by 0.92%, ICICI Bank up by 0.91% and Power Grid Corporation up by 0.90%. On the flip side, Tata Steel down by 0.93%, TCS down by 0.86%, Titan Company down by 0.80%, Sun Pharma down by 0.69% and SBI down by 0.56% were the top losers.

Meanwhile, ICRA in its latest report has projected India’s Gross Domestic Product (GDP) growth at 13.0% for first quarter (April-June) of current fiscal year (FY23) a sharp jump from the 4.1% in Q4 FY22. It has also projected the year-on-year (YoY) growth of the gross value added (GVA) at basic prices (at constant 2011-12 prices) in Q1 FY23 at 12.6%, a jump from 3.9% recorded in Q4 FY22. Aditi Nayar, Chief Economist, ICRA said ‘the anticipated double-digit GDP expansion in Q1 FY23 benefits from the low base of the second wave of Covid 19 in India in Q1 FY22 as well as the robust recovery in the contact-intensive sectors following the widening vaccination coverage.

As per the report, the sectoral growth in Q1 FY23 to be driven by the services sector (+17-19%; +5.5% in Q4 FY2022), followed by the industry (+9-11%; +1.3%). However, the GVA growth in agriculture, forestry and fishing is projected to decline to around 1.0% in Q1 FY2023 from 4.1% in Q4 FY2022, on account of the adverse impact of the heat wave in several parts of the country, which suppressed wheat output.

The recovery in travel-related services has been upbeat since the onset of FY2023, benefitting from pent-up demand related to corporate travel and increasing confidence for availing leisure services amid the decline in trajectory of Covid-19 infections. Moreover, within transportation, the railway and road sub-sectors are expected to post a healthy recovery in Q1 FY2023, as indicated by the healthy YoY growth in rail freight and GST e-way bills. In addition, other services, which include education, healthcare, recreation, and personal services, are likely to have seen a sharp base effect-led jump in this quarter.

The agency said the Government of India’s (GoI’s) capex, infrastructure/construction output and new project announcements showed encouraging trends in Q1 FY23, along with a robust order book position of construction and capital goods companies and the resilience in housing sales, as evinced by stamp duty collections. However, project completions, states’ capex and capital goods’ output were subdued, suggesting that the recovery in investment demand remained uneven.

The CNX Nifty traded in a range of 17,623.65 and 17,499.25. There were 26 stocks advancing against 24 stocks declining on the index.   

The top gainers on Nifty were Apollo Hospital up by 3.17%, Indusind Bank up by 2.89%, ONGC up by 1.68%, ICICI Bank up by 1.06% and NTPC up by 1.04%. On the flip side, BPCL down by 1.24%, Tata Steel down by 1.21%, Divi's Lab down by 1.03%, TCS down by 0.93% and Titan Company down by 0.90% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 28.09 points or 0.38% to 7,460.02, France’s CAC decreased 0.53 points or 0.01% to 6,361.49 and Germany’s DAX decreased 18.78 points or 0.14% to 13,175.45.

Asian markets settled mostly lower on Wednesday, tracking weak US stocks overnight and as a slew of disappointing economic readings added to concerns about economic slowdown and tighter monetary policy. Data showed that private-sector business activity in the United States contracted for a second straight month in August, factory activity in the US central Atlantic region contracted in August, and sales of new single-family homes plunged to a 6-1/2-year low in July. Further, persisting recession worries along with power crisis in Europe and China also kept investors nervous. Meanwhile, investors are waiting for US Fed Chair Jerome Powell’s address to the Jackson Hole Symposium this Friday for further cues on how aggressively the Fed is likely to be with future interest rate rises. Chinese property developer Logan Group’s shares dropped in Hong Kong after resuming trading following a three-month halt for failing to report audited earnings on time.