Markets trade flat with positive bias

Indian equity benchmarks reversed opening losses and were trading flat with a positive bias in morning deals, led by gains in Telecom and Banking stocks. Traders took some support with a private survey showed activity in India's dominant services industry gathered pace in October despite high inflationary pressures, underpinned by robust domestic demand, leading to the second fastest hiring pace in over three years. The S&P Global India services Purchasing Managers' Index (INPMIS=ECI) edged up to 55.1 in October from September's six-month low of 54.3, above the 50-mark that separates expansion from contraction for a fifteenth month. Traders also took a note of report that Governor Shaktikanta has Das said the Reserve Bank of India wishes to concentrate on inflation in the same way as Arjuna focussed on hitting the eye of a revolving fish in the epic Mahabharata. The remarks come at a time when inflation is ruling high and RBI will soon be explaining to the government about the reasons for overshooting the inflation target for nine consecutive months.

On the global front, Asian markets were trading mostly in red after Fed chair Jerome Powell turned out to be more hawkish than expected. Powell warned that thoughts about a potential pause would be 'very premature', and that the Fed hasn't 'overtightened' yet as the battle against inflation would require borrowing costs to rise further. Back home, aviation stocks remained in watch as Civil Aviation Minister Jyotiraditya Scindia said the country’s civil aviation sector is likely to log around 400 million passengers over the next 7 to 10 years.

The BSE Sensex is currently trading at 60955.21, up by 49.12 points or 0.08% after trading in a range of 60485.14 and 60994.37. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index up by 0.21%.

The top gaining sectoral indices on the BSE were Telecom up by 0.97%, PSU up by 0.61%, Bankex up by 0.55%, FMCG up by 0.53% and Capital Goods up by 0.43%, while IT down by 0.88%, Utilities down by 0.61%, Power down by 0.54%, TECK down by 0.54% and Realty down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.49%, Axis Bank up by 1.43%, Titan Company up by 1.15%, ITC up by 1.11% and Bajaj Finserv up by 0.80%. On the flip side, Tech Mahindra down by 2.19%, TCS down by 1.09%, Wipro down by 0.93%, Infosys down by 0.89% and Mahindra & Mahindra down by 0.67% were the top losers.

Meanwhile, amid flak faced by the RBI for missing inflation target, Governor Shaktikanta Das has defended its policies saying the economy would have taken a ''complete downward turn'' if it had started to tighten rates earlier. He said the Indian economy is being looked at as a story of resilience and optimism by the world and the inflation is now expected to moderate.

Acknowledging that the central bank has missed its primary target as inflation has consistently overshot, Das said there is a need for appreciating the counterfactual aspect as well, and think about the impact of premature tightening which would have hurt recovery. He said ‘It (tightening earlier) would have been very costly for the economy. It would have been very costly for the citizens of this country. We would have paid a high cost.’

RBI Governor said during the pandemic, the RBI utilised flexibility in the monetary policy framework to tolerate a slightly higher inflation which was within the target range of 2-6 per cent, to ensure that overall economy remained resilient and financial stability was maintained. He said the economy bounced back in FY22 and FY23 after contracting in the pandemic-affected FY21, and is also expected to sustain in FY24. It can be noted that some critics have questioned the delay in rate tightening, which began in May this year with an off-cycle meeting of the rate-setting panel, saying RBI should have acted earlier in the face of high inflation.

The CNX Nifty is currently trading at 18098.35, up by 15.50 points or 0.09% after trading in a range of 17959.20 and 18106.30. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.71%, Bharti Airtel up by 1.50%, Axis Bank up by 1.35%, Titan Co up by 1.05% and ITC up by 1.04%. On the flip side, Tech Mahindra down by 2.22%, Hindalco down by 1.61%, TCS down by 1.06%, Infosys down by 0.93% and Wipro down by 0.93% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 446.06 points or 2.82% to 15,381.11, Taiwan Weighted dropped 121.74 points or 0.93% to 12,978.43, Straits Times trembled 38.30 points or 1.22% to 3,102.83, KOSPI fell 5.27 points or 0.23% to 2,331.60 and Shanghai Composite declined 18.94 points or 0.63% to 2,984.43.

On the flip side, Jakarta Composite soared 17.73 points or 0.25% to 7,033.42.