Indices wipe out opening losses to trade flat in early deals; RBI policy outcome eyed

Indian equity benchmarks made negative start on Friday tracking sell-off in global peers. Soon, markets recovered most of the losses and are trading flat in early deals as market participants reluctant to make any significant move ahead of the Reserve Bank of India's (RBI) interest rate stance post their 3-day monetary policy committee meeting. There are expectations that the central bank to raise interest rates up to 50 basis points. Traders were concerned as the RBI said India’s current account deficit (CAD) in April-June was at $23.9 billion, or 2.8 per cent of gross domestic product (GDP), much higher than the $13.4 billion, or 1.5 per cent of GDP, in January-March 2022. Besides, foreign institutional investors sold a net Rs 35.99 billion ($441.7 million) worth of equities on Thursday, as per provisional data available with the National Stock Exchange. Downside remained capped as S&P Global Ratings said rising rates and increased European energy insecurity are hitting growth in almost every country, but India with an estimated 7.3 per cent growth this fiscal, would be the star among emerging market economies.

On the global front, all the Asian markets are trading lower following the broadly negative cues from global markets overnight, on growing fears of a recession amid persistently high inflation, rising interest rates and slowing global growth. Buying interest generated by the Bank of England's bond market intervention quickly evaporated as traders quickly cashed in on the gains. Back home, auto stocks were in focus as the government deferred until October 2023 the implementation of norms mandating six airbags in all cars, giving the industry a one-year extension. Also, Moody's Investor Service said robust car sales during the ongoing festive season amid the easing of chip shortage will help the Indian automobile industry outshine its regional and global peers this year. In stock specific development, Adani Green rises on commissioning new wind-solar energy plant.

The BSE Sensex is currently trading at 56405.94, down by 4.02 points or 0.01% after trading in a range of 56147.23 and 56444.75. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.48%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Telecom up by 0.70%, Metal up by 0.39%, Healthcare up by 0.37%, PSU up by 0.23%, Bankex up by 0.11%, while IT down by 1.02%, Auto down by 0.87%, TECK down by 0.79%, Consumer Durables down by 0.56%, Realty down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.12%, Ultratech Cement up by 1.43%, Reliance Industries up by 1.38%, Sun Pharma up by 0.99% and Larsen & Toubro up by 0.90%. On the flip side, Asian Paints down by 2.47%, Tech Mahindra down by 2.01%, Mahindra & Mahindra down by 1.48%, TCS down by 1.25% and Wipro down by 1.17% were the top losers.

Meanwhile, expressing optimism over India’s economic status, Union Minister Piyush Goyal said the country will be the pillar of the global economic revival as it exhibited steady growth and emerged as the fastest-growing country among large economies of the world. He said if all stakeholders of the economy work together with a sense of 'Kartavya bhav' (spirit of duty), the national goal of $30-trillion economy will be achieved by 2047, the year when the country will celebrate 100th anniversary of its independence. He added that India is already the fifth largest economy in the world and is turbocharging its growth to become the third largest in the coming years. He claimed all sectors such as agriculture, manufacturing and construction are doing quite well.

Asserting that India is the best destination for investments, Goyal said the government has taken several structural reforms, and more are in the pipeline. He also urged industrialists for private investments and asked them to believe in India's growth story and help the country in achieving its goals with greater participation. He appealed to industrialists to help India become a global base for manufacturing and invest in tier II and tier III cities, which hold ‘immense potential’.

He stressed on the promotion of micro, small and medium enterprises by strengthening the local supply network as the sector is a job creator and a major contributor to the economy. He also called for more dialogue with the government and active participation in the FTA (free trade agreement) negotiations. He stated that the 5G rollout in the telecom services across the country will contribute $450 billion to the economy in the next 15 years. The minister also mentioned that India is taking leadership roles on global platforms.

The CNX Nifty is currently trading at 16818.40, up by 0.30 points after trading in a range of 16747.70 and 16836.15. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Power Grid Corp up by 3.73%, ONGC up by 3.28%, Hindalco up by 2.41%, Reliance Industries up by 1.34% and Ultratech Cement up by 1.32%. On the flip side, Asian Paints down by 2.43%, Tata Motors down by 1.91%, Tech Mahindra down by 1.76%, Mahindra & Mahindra down by 1.69% and Infosys down by 1.26% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 570.09 points or 2.16% to 25,851.96, Straits Times fell 14.64 points or 0.47% to 3,100.44, Hang Seng lost 22.26 points or 0.13% to 17,143.61, Taiwan Weighted plunged 127.38 points or 0.94% to 13,406.88, KOSPI declined 10.45 points or 0.48% to 2,160.48, Jakarta Composite worsened 30.39 points or 0.43% to 7,005.81 and Shanghai Composite was down by 6.35 points or 0.21% to 3,034.85.