Markets wipe out opening losses to trade flat with positive bias

Indian equity benchmarks made negative start on Tuesday, but soon wiped out all the losses and entered into positive territory. Markets are trading flat with positive bias in early deals as Indian rupee opened marginally higher at 82.70 per dollar on Tuesday against previous close of 82.74. Broader indices -- BSE Mid & Small cap -- were outperforming larger peers with gains of around 0.40% each. Domestic indices opened lower amid foreign fund outflows. Foreign institutional investors (FII) net-sold shares worth Rs 212.57 crore on January 2, as per provisional data available on the NSE. Traders were also concerned as the IMF chief has said a third of the global economy will be in recession this year, and warned that 2023 will be tougher than last year as the US, EU and China will see their economies slow down. However, traders took note of Assocham’s statement that India's economy is expected to navigate rough global weather in 2023 due to resilient consumer demand, better corporate performance and abating of inflation, even as the year is likely to be full of challenges and opportunities.

On the global front, most of the Asian markets are trading higher as investors looked ahead to the release of a slew of U.S. economic data. The Japanese stock market is closed for trading today. Back home, oil & gas industry stocks are trading under pressure amid report that India raised windfall tax on petroleum, crude oil and aviation turbine fuel, according to a government order dated January 2. In stock specific development, IRCTC traded higher as the Ministry of Railways said the Indian Railways registered a 71% jump in revenue from the passenger segment between April and December.

The BSE Sensex is currently trading at 61195.26, up by 27.47 points or 0.04% after trading in a range of 61004.04 and 61195.26. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.40%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Realty up by 0.60%, Telecom up by 0.56%, PSU up by 0.46%, Bankex up by 0.38%, Healthcare up by 0.32%, while Oil & Gas down by 0.26%, Metal down by 0.22%, Energy down by 0.21%, FMCG down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.12%, Axis Bank up by 0.78%, SBI up by 0.66%, Tech Mahindra up by 0.50% and Tata Motors up by 0.44%. On the flip side, Bharti Airtel down by 0.50%, Reliance Industries down by 0.39%, ITC down by 0.35%, Tata Steel down by 0.25% and Mahindra & Mahindra down by 0.25% were the top losers.

Meanwhile, the Associated Chambers of Commerce and Industry of India (Assocham) has said India's economy is expected to navigate rough global weather in 2023 due to resilient consumer demand, better corporate performance and abating of inflation, even as the year is likely to be full of challenges and opportunities. Assocham Secretary General Deepak Sood stated ‘while the global outlook seems rather tough, the Indian economy is set to stay on steady ground, helped by strong domestic demand, a healthy financial sector and improved corporate balance sheets. Early signs of brighter prospects of Rabi crops point towards a robust performance of agriculture, leaving an improved second round effect for several connected industries like FMCG, tractors, two-wheelers, speciality chemicals and fertilisers’.

He added while there is an overwhelming consumer response to contact services like travel, hotels and transport, a positive domino effect is visible in transport, housing, power, electronics, discretionary consumer goods and automobiles. He said ‘Our domestic demand is bound to offset the risk of global demand slowdown...However, we need to be watchful about international currency fluctuations, particularly in Emerging Economies’. He noted as per the recent assessment shared by the Reserve Bank of India, the global economy is projected to grow by a mere 2.7 per cent even as some of the key developed economies face recession, being exasperated by their central banks' policies of monetary tightening.

He said that to an extent, the impact of higher interest would be reflected in the balance sheets of Indian corporates as well. However, he observed that the corporate sector is expected to continue with the policy of deleveraging, taking advantage of a resilient stock market and reversal in commodity prices. He further said ‘Despite global headwinds, including recession, looming large in several economies, unabated geo-political situation, inflation, India is set to register an economic expansion between 6.8-7 per cent in the financial year 2022-23. Going forward, FY-24 should hold steady’.

The CNX Nifty is currently trading at 18204.00, up by 6.55 points or 0.04% after trading in a range of 18149.80 and 18209.00. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 2.72%, Bajaj Finance up by 1.18%, Cipla up by 0.80%, Axis Bank up by 0.69% and Divi's Lab up by 0.68%. On the flip side, ONGC down by 1.23%, Hindalco down by 0.70%, BPCL down by 0.60%, JSW Steel down by 0.56% and Reliance Industries down by 0.54% were the top losers.

Asian markets are trading mostly in green; Hang Seng surged 253.28 points or 1.28% to 20,034.69, Taiwan Weighted rose 50.03 points or 0.35% to 14,187.72, Jakarta Composite added 36.92 points or 0.54% to 6,887.90 and Shanghai Composite was up by 17.34 points or 0.56% to 3,106.60. On the other hand, Straits Times fell 21.02 points or 0.65% to 3,230.30 and KOSPI was down by 1.43 points or 0.06% to 2,224.24.