Markets slip below neutral lines after flat opening

Indian equity benchmarks opened flat on Thursday as investors eyed the listing of Jio Financial Services and amid the special pre-open session for Reliance Industries. Shares of Reliance Industries shares are not available for normal trading for the first 45 minutes on Thursday as the company will demerge its financial services business today, with the stock exchanges holding a special ‘price discovery’ session from 9 am to 10 am for the first time ever to determine the value of Jio Financial Services' shares. Markets soon slipped below neutral lines and are trading lower with cut of over 0.30% each in early deals as investors opted to book profits after recent gains amid weekly F&O expiry later in the day. Some cautiousness also crept in as S&P Global Ratings reportedly said India is unlikely to embark on any major new reforms till the 2024 elections, but momentum could pick up if the next government comes with a strong mandate. 

On the global front, Asian markets are trading mixed as traders remain cautiously optimistic because of an improving outlook for interest rates. Though the US Fed is still widely expected to raise rates by another quarter point next week, traders are hopeful it is nearing the end of its interest rate hikes. Back home, edible oil industry stocks are in focus as trade body SEA said oilmeal exports fell 35 per cent in June to 2,80,001 tonne, mainly due to lower demand of rapeseed meals from overseas. In stock specific development, Dr Reddy's traded higher after USFDA completed a Pre-Approval Inspection (PAI) with zero observations. 

The BSE Sensex is currently trading at 66868.34, down by 229.10 points or 0.34% after trading in a range of 66868.08 and 67113.19. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.01%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Telecom up by 0.43%, PSU up by 0.26%, Realty up by 0.23%, Healthcare up by 0.23% and Oil & Gas up by 0.14%, while IT down by 1.12%, TECK down by 0.95%, Auto down by 0.44%, Consumer Durables down by 0.36% and Capital Goods down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.40%, SBI up by 0.36%, Tata Steel up by 0.26%, ICICI Bank up by 0.18% and Indusind Bank up by 0.11%. On the flip side, Reliance Industries down by 8.84%, Infosys down by 1.86%, HCL Technologies down by 1.67%, Ultratech Cement down by 1.28% and TCS down by 0.84% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, World Bank President Ajay Banga said that the country has come out strong from the challenges posed by the Covid pandemic but the momentum needs to be maintained. He said India is doing a lot of things which are helping it to stay ahead during times of a global slowdown. He added ‘One thing that is in India's favour is the very high percentage of GDP that comes domestically... India has come out strong from the challenges posed by the pandemic but the momentum needs to be maintained’. He noted ‘The best way to maintain this momentum is growth and more jobs. India is focussed on growing more and more and generating more jobs’.

About India's potential growth in high income jobs, Banga said ‘We need to understand where are these jobs. They are in technology, which are very few...then they are in manufacturing. India's opportunity currently is to cash in on the China plus strategy. This opportunity won't stay open for 10 years, it is a three to five years opportunity when supply chains start relocating or add another location that is going to need work’.

The World Bank President said he is preparing to pitch for private capital and corporate social responsibility funds to augment current sources of financing. He further said the gains made on poverty over the last three to four decades across the world took a hit due to the pandemic, climate change and higher debt in some countries. He said ‘the best way to drive a nail in the coffin of poverty is growth. You have to provide jobs to people...you have to provide education and skilling for those jobs. You have to provide healthcare for people’. Noting that India is focused on both growth and jobs, he said ‘I am actually more optimistic with all the infrastructure investment...both digital and physical infrastructure in India’.

The CNX Nifty is currently trading at 19765.80, down by 67.35 points or 0.34% after trading in a range of 19759.25 and 19844.00. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 1.18%, Sun Pharma up by 0.52%, SBI up by 0.42%, Hindalco up by 0.32% and ICICI Bank up by 0.21%. On the flip side, Reliance Industries down by 9.21%, Infosys down by 1.93%, HCL Technologies down by 1.62%, Ultratech Cement down by 1.24% and Hero MotoCorp down by 1.18% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 311.48 points or 0.96% to 32,584.55, Shanghai Composite weakened 10.4 points or 0.33% to 3,188.44, Straits Times fell 6.9 points or 0.21% to 3,268.34 and KOSPI dropped 2.32 points or 0.09% to 2,605.92. On the other hand, Taiwan Weighted rose 75.38 points or 0.44% to 17,191.82, Hang Seng advanced 48.09 points or 0.25% to 19,000.40 and Jakarta Composite was up by 35.73 points or 0.52% to 6,865.93.