Indian equities trade flat in early deals; HDFC twins fall

Indian equity benchmarks made cautious start on Tuesday amid lackluster cues from Asian counterparts as traders remain cautious and reluctant to make significant moves amid worries over a standoff on raising the U.S. government's $31.4 trillion borrowing limit. Now, markets are trading flat in early deals amid lack of directional cues. Investors are keeping close eyes on Q4 earnings for more cues. Bank of Baroda, Bharti Airtel, Indian Oil, Granules, JK Paper are among others to report quarterly results later in the day. HDFC and HDFC Bank remained the top laggards with cuts of a percent. Both the stocks are trading ex-dividend today. Traders are concerned as the government data showed that India’s exports contracted by 12.7 per cent, third month in a row, to $34.66 billion in April even as the trade deficit reduced to a 20-month low of $15.24 billion. The decline in exports is mainly on account of poor demand in India’s key destinations - the Europe and the US. 

Though, broader indices are outperforming larger peers with decent gains amid persistent foreign fund inflows. Foreign institutional investors (FII) bought shares worth Rs 1,685.29 crore on May 15, provisional data from the National Stock Exchange showed. On the sectoral front, oil & gas sector stocks were in focus as the center revised the windfall tax on domestically produced crude oil, cutting the tax rate to zero from Rs 4,100 per tonne. 

The BSE Sensex is currently trading at 62333.91, down by 11.80 points or 0.02% after trading in a range of 62174.39 and 62475.95. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.85%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Realty up by 1.43%, IT up by 0.71%, Consumer Durables up by 0.61%, Industrials up by 0.61%, Healthcare up by 0.56%, while Bankex down by 0.12% was the sole losing index on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.35%, Infosys up by 0.97%, Tata Motors up by 0.87%, Bajaj Finserv up by 0.85% and Nestle up by 0.82%. On the flip side, HDFC down by 1.72%, HDFC Bank down by 1.02%, Maruti Suzuki down by 0.74%, Bharti Airtel down by 0.58% and Power Grid down by 0.53% were the top losers.

Meanwhile, a free trade agreement (FTA) between India and four-nation bloc EFTA will help enhance two-way commerce, investment flows, job creation and economic growth. Commerce and Industry Minister Piyush Goyal has discussed modalities of engagement for working towards a comprehensive Trade and Economic Partnership Agreement (TEPA) with representatives of European Free Trade Association (EFTA) states -  Iceland, Liechtenstein, Norway, and Switzerland. On April 26, both sides discussed ways to resume negotiations for the agreement. India and the EFTA states discussed the modalities of engagement for working towards a comprehensive TEPA.

The delegations agreed to ramp up their efforts and continue discussions at a steady pace, with several more meetings planned over the coming months, to arrive at a common understanding on critical issues pertaining to TEPA. Both sides emphasised on the importance of building their discussions on principles of trust and respect for each other's sensitivities to achieve a fair, equitable and balanced agreement. Indeed, a TEPA between EFTA and India could bring significant economic benefits, such as integrated and resilient supply chains and new opportunities for businesses and individuals on both sides leading to increased trade and investment flows, job creation, and economic growth.

A FTA between the two regions is officially dubbed as TEPA. Under such pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments. EFTA countries are not part of the European Union (EU). EFTA is an inter-governmental organisation for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European Community. India's exports to EFTA countries during April-February 2022-23 stood at $1.67 billion as against $1.74 billion in 2021-22. Imports aggregated at $15 billion during the 11-month period as compared to $25.5 billion in 2021-22.

The CNX Nifty is currently trading at 18403.20, up by 4.35 points or 0.02% after trading in a range of 18360.10 and 18432.35. There were 35 stocks advancing against 14 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Divi's Lab up by 1.44%, Bajaj Finance up by 1.35%, ONGC up by 1.21%, Infosys up by 1.01% and BPCL up by 0.99%. On the flip side, HDFC down by 1.70%, HDFC Bank down by 1.04%, Maruti Suzuki down by 0.75%, Power Grid down by 0.53% and UPL down by 0.44% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 240.27 points or 0.81% to 29,866.61, Taiwan Weighted added 195.3 points or 1.26% to 15,670.35, Hang Seng advanced 83.85 points or 0.42% to 20,054.98, KOSPI increased 3.72 points or 0.15% to 2,483.07 and Shanghai Composite was up by 0.32 points or 0.01% to 3,311.06. On the other hand, Jakarta Composite plunged 35.85 points or 0.53% to 6,675.89 and Straits Times was down by 2.41 points or 0.07% to 3,212.31.