Sensex, Nifty remain weak; trade near neural lines

Indian equity benchmarks remained weak, with both Sensex and Nifty trading flat with a negative bias amid selling at Telecom and Consumer Durables counters. Positive cues from other Asian markets failed to support the markets. Traders were cautious, amid a private report stating that VC investment in India is expected to remain soft in the first quarter of 2023, before starting to pick up in Q2 -- in part due to India's strong growth and consumption expectations. Some worries came after European Central Bank President Christine Lagarde said inflation is too high and reiterated the central bank's determination to bring it back to 2 per cent.

On the global front, Asian markets were trading higher, even after China left its benchmark lending rates unchanged for the fifth straight month despite the economy struggling to gain traction. The People's Bank of China kept its one-year loan prime rate, or LPR, unchanged at 3.65 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was maintained at 4.30 percent. Previously, the bank had reduced the five-year LPR rate by 15 basis points each in May and August, and by 5 basis points last January. The one-year LPR was last reduced in August.

The BSE Sensex is currently trading at 60852.55, down by 5.88 points or 0.01% after trading in a range of 60736.65 and 61001.18. There were 13 stocks advancing against 16 stocks declining, while one stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.19%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were PSU up by 0.72%, Bankex up by 0.54%, Oil & Gas up by 0.32%, Utilities up by 0.29% and Energy up by 0.28%, while Telecom down by 0.97%, Consumer Durables down by 0.70%, FMCG down by 0.52%, Realty down by 0.44% and Healthcare down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.12%, HDFC up by 1.37%, Indusind Bank up by 1.25%, HDFC Bank up by 1.20% and Power Grid Corporation of India up by 1.04%. On the flip side, Hindustan Unilever down by 2.39%, Asian Paints down by 2.16%, Nestle down by 1.80%, Bajaj Finance down by 1.47% and Bharti Airtel down by 1.22% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that profitability for phosphatic fertiliser players are expected to improve at the current nutrient-based subsidy (NBS) rates, given the decline in input prices. For urea players also, the energy efficient plants are likely to benefit from higher energy savings given the elevated pooled gas prices.

According to the report, the international fertiliser prices, which along with the key raw material prices, had witnessed a sharp uptick, driven by strong crop prices, healthy demand, and the ongoing geo-political issues amid limited supplies of some of the fertilisers, which have now started to moderate. This is due to weakness in international demand at such elevated prices. It said subsequent to the price rise, the government of India (GoI) revised the NBS rates substantially, even as the same remained inadequate as the prices kept on rising to lead to moderation in the profitability of phosphatic fertiliser players. Now with the softening in prices, the government has also revised the NBS rates downwards with effect from October 1, 2022.

The report further said the current fiscal started with a budgetary subsidy allocation of Rs. 1.05 lakh crore, which was subsequently increased to Rs. 2.14 lakh crore as against the requirement of around Rs. 2.5 lakh crore. It expects the government to allocate additional subsidies to ensure adequate fertiliser availability for the farmers and a healthy credit profile of the incumbents. It said there were some delays in subsidy clearances in the first half of the current fiscal, which along with elevated prices, had kept the working capital requirements high for the industry. It added that while a major chunk of the subsidy was cleared in the last couple of months, resulting in lowering the subsidy outstanding, the current fiscal will witness elevated interest costs for the industry.

The CNX Nifty is currently trading at 18103.85, down by 4.00 points or 0.02% after trading in a range of 18069.35 and 18145.45. There were 21 stocks advancing against 28 stocks declining, while one stock remained unchanged on the index.

The top gainers on Nifty were Tata Motors up by 2.12%, Coal India up by 1.79%, HDFC up by 1.38%, HDFC Bank up by 1.24% and Indusind Bank up by 1.20%. On the flip side, Hindustan Unilever down by 2.43%, Asian Paints down by 2.13%, Nestle down by 1.99%, Bajaj Finance down by 1.47% and JSW Steel down by 1.41% were the top losers.

All Asian markets were trading higher; KOSPI increased 14.92 points or 0.62% to 2,395.26, Jakarta Composite gained 15.7 points or 0.23% to 6,835.61, Shanghai Composite strengthened 23.26 points or 0.72% to 3,263.54, Straits Times rose 25.49 points or 0.78% to 3,301.67, Nikkei 225 surged 148.3 points or 0.56% to 26,553.53 and Hang Seng advanced 325.72 points or 1.5% to 21,976.70.