Benchmarks turn positive as RBI keeps repo rate unchanged

Indian equity benchmarks erased initial losses and were trading in green terrain in morning deals, after the Reserve Bank of India hit the pause button and decided to keep key benchmark policy rate at 6.5 per cent even as inflation is trending above its tolerance level. The rate hike has been paused after six consecutive rate increases aggregating to 250 basis points since May 2022. Traders took some support as leading industry bodies said the Foreign Trade Policy (FTP) for 2023 announced recently will further boost business sentiments to reach the aspirational target of India becoming a leader in exports. Chairman of CII national committee on exports and imports Sanjay Budhia said that reduction in export performance threshold in the new FTP will enable exporters to achieve reduction in transaction costs for outbound cargo.

On the global front, Asian markets are trading in red as recession worries returned to haunt investors as another round of U.S. data pointed to a slowing economy. At the same time, markets are now pricing in more chances of the Fed standing pat on interest rates at its next policy meeting in May. Back home, banking stocks remained in watch as RBI data showed that bank credit rose by 15 per cent year-on-year (YoY) in 2022-23 (FY23), against 9.6 per cent YoY in 2021-22 (FY22). FY23 credit growth is highest since 2011-12, when it was 19.3 per cent.

The BSE Sensex is currently trading at 59823.13, up by 133.82 points or 0.22% after trading in a range of 59520.12 and 59866.22. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Realty up by 1.06%, Utilities up by 0.89%, Power up by 0.75%, Industrials up by 0.73% and Capital Goods up by 0.67%, while Metal down by 0.57%, FMCG down by 0.33%, Consumer Durables down by 0.25%, IT down by 0.05% and TECK down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.75%, SBI up by 1.51%, Bajaj Finserv up by 1.25%, Indusind Bank up by 1.07% and Larsen & Toubro up by 0.97%. On the flip side, HCL Technologies down by 0.84%, Axis Bank down by 0.54%, Nestle down by 0.50%, Hindustan Unilever down by 0.39% and Titan Company down by 0.37% were the top losers.

Meanwhile, Minister of State for Commerce and Industry Anupriya Patel has said that the major commodities in which India has a trade deficit with China include electronic components, computer hardware, telecom instruments, industrial machinery for dairy and organic chemicals.

She said the commodities exhibiting trade deficit with China constituted 86.7 per cent of the total trade in 2014-15, which has reduced to 83.8 per cent of the total trade with China in 2021-22. She stated, similarly, the services exhibiting trade deficit with China contributed 30.3 per cent to the total trade with China in 2014, which has reduced to 18.5 per cent in 2019.

Besides, she said India has signed 13 Free Trade Agreements (FTAs) with its trading partners including the UAE, Australia and Singapore. She added India is currently negotiating FTAs with the United Kingdom, the European Union and Canada. However, it is difficult to predict the timeline for completion of negotiations, as agreements are entered into when negotiating countries are satisfied with the outcome.

The CNX Nifty is currently trading at 17587.40, up by 30.35 points or 0.17% after trading in a range of 17502.85 and 17601.25. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 1.90%, SBI up by 1.61%, Adani Enterprises up by 1.48%, Bajaj Finserv up by 1.20% and Divi's Lab up by 0.98%. On the flip side, ONGC down by 1.24%, HCL Tech. down by 0.85%, UPL down by 0.79%, Britannia Industries down by 0.66% and Nestle down by 0.65% were the top losers.

Asian markets are trading in red; Taiwan Weighted lost 67.5 points or 0.43% to 15,800.56, Hang Seng declined 9.97 points or 0.05% to 20,264.62, Shanghai Composite weakened 1.48 points or 0.04% to 3,311.08, KOSPI dropped 32.9 points or 1.32% to 2,462.31, Jakarta Composite plunged 14.69 points or 0.22% to 6,804.99, Straits Times fell 18.81 points or 0.57% to 3,300.06 and Nikkei 225 slipped 366.73 points or 1.32% to 27,446.53.