Sensex, Nifty turn negative in early noon deals

Indian equity benchmarks turned negative in early afternoon deals, even after the Reserve Bank of India (RBI), in its second bi-monthly policy for FY24, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for second time in a row. Heavy selling at Realty and Telecom counters along with negative cues from other Asian markets impacted domestic sentiments. Adding some worries among traders, the latest economic outlook by the Paris-based Organization for Economic Cooperation and Development (OECD) noted that the global economy must steer through a precarious recovery this year and next as inflation keeps dragging on household spending and higher interest rates weigh on growth, banks and markets.

On the global front, Asian markets were trading mostly in red, even after Japan's gross domestic product expanded a seasonally adjusted 0.7 percent on quarter in the first three months of 2023. That beat forecasts for an increase of 0.4 percent following the flat reading in the three months prior. On an annualized basis, GDP climbed 2.7 percent on year - also topping expectations for a gain of 1.6 percent following the 0.1 percent rise in the previous three months.

The BSE Sensex is currently trading at 63090.81, down by 52.15 points or 0.08% after trading in a range of 63040.40 and 63321.40. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.59%, while Small cap index was down by 0.37%.

The top gaining sectoral indices on the BSE were Utilities up by 1.22%, Power up by 1.08%, Metal up by 0.48%, Capital Goods up by 0.42% and PSU up by 0.13%, while Realty down by 1.59%, Telecom down by 0.87%, Auto down by 0.86%, FMCG down by 0.65% and IT down by 0.54% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.54%, Power Grid Corporation of India up by 1.44%, Larsen & Toubro up by 1.08%, HDFC Bank up by 0.69% and ICICI Bank up by 0.65%. On the flip side, Tata Motors down by 1.64%, Kotak Mahindra Bank down by 1.55%, Sun Pharma down by 1.51%, Mahindra & Mahindra down by 1.49% and Tech Mahindra down by 1.19% were the top losers.

Meanwhile, the Reserve Bank of India (RBI), in its second bi-monthly policy for FY24, has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent  for second time in a row. The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.

RBI’s Monetary Policy Committee (MPC) also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. On the inflation front, CPI inflation is projected at 5.1 per cent for 2023-24, with Q1 at 4.6 per cent, Q2 at 5.2 per cent, Q3 at 5.4 per cent and Q4 at 5.2 per cent. The risks are evenly balanced. 

On the economic growth front, real gross domestic product (GDP) growth accelerated from 4.5 per cent (year-on-year, y-o-y) in Q3:2022-23 to 6.1 per cent in Q4, supported by fixed investment and higher net exports. Real GDP growth for 2022-23 was placed at 7.2 per cent, higher than the second advance estimate of 7.0 per cent. The real GDP growth for 2023-24 is projected at 6.5 per cent with Q1 at 8.0 per cent, Q2 at 6.5 per cent, Q3 at 6.0 per cent, and Q4 at 5.7 per cent, with risks evenly balanced.

The CNX Nifty is currently trading at 18702.95, down by 23.45 points or 0.13% after trading in a range of 18684.65 and 18777.90. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.76%, JSW Steel up by 2.71%, Power Grid Corporation of India up by 1.73%, ONGC up by 1.43% and Larsen & Toubro up by 1.06%. On the flip side, Grasim Industries down by 2.07%, BPCL down by 1.85%, Eicher Motors down by 1.80%, Apollo Hospital down by 1.76% and Tata Motors down by 1.63% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 272.47 points or 0.86% to 31,641.27, Taiwan Weighted lost 188.79 points or 1.13% to 16,733.69, Straits Times fell 7.15 points or 0.22% to 3,172.43, KOSPI dropped 4.75 points or 0.18% to 2,610.85 and Hang Seng declined 0.01 points or 0% to 19,251.99, while Jakarta Composite gained 6.87 points or 0.1% to 6,626.63 and Shanghai Composite strengthened 13.97 points or 0.44% to 3,211.73.