Domestic markets trade higher in early deals

Indian equity indices made positive start of the new week with Q1FY24 earnings in focus amid mixed moves across global markets. Also, investors are looking ahead to the upcoming RBI policy meeting. There are expectations that the Reserve Bank is likely to continue with the pause on the key interest rate at its upcoming monetary policy review. The RBI Governor-headed six-member Monetary Policy Committee’s (MPC) meeting is scheduled on August 8-10. Domestic markets are trading higher with gains of around quarter percent in early deals on Monday as buying in Healthcare, Telecom and IT counters aided sentiments. Some support also came in as K V Kamath, chairman of the National Bank for Financing Infrastructure and Development (NaBFID), expressed his confidence in India’s potential to achieve the $5-trillion economy target within 18 months. Though, upside remained capped as latest data from the Reserve Bank of India (RBI) showed that foreign exchange reserves fell $3.2 billion to $603.9 billion in the week ended July 28. 

On the global front, Asian markets are trading mixed following the broadly negative cues from Wall Street on Friday, as traders reacted to data showing less than expected employment growth in the U.S. and Canada in July, which eased concerns about the outlook for interest rates and raised expectations the central banks will soon end their policy tightening. 

Back home, the Directorate General of Foreign Trade (DGFT) announced that it has decided to delay the licensing mandate for the import of laptops, tablets and personal computers till November 1, 2023. Import consignments can be cleared till October 31, 2023 without a license for restricted imports. In stock specific development, One97 Communications rallied after Vijay Shekhar Sharma, Founder, Managing Director and CEO of the company, entered into an agreement to purchase a 10.30% Stake in Paytm from Antfin (Netherlands) Holding B.V.

The BSE Sensex is currently trading at 65873.80, up by 152.55 points or 0.23% after trading in a range of 65748.25 and 65931.68. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.26%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.96%, Telecom up by 0.66%, IT up by 0.39%, Auto up by 0.36% and Capital Goods up by 0.32%, while Utilities down by 0.65%, Power down by 0.58%, FMCG down by 0.25%, Metal down by 0.19% and Consumer Durables down by 0.14% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.34%, Sun Pharma up by 2.03%, Larsen & Toubro up by 0.69%, Ultratech Cement up by 0.64% and ICICI Bank up by 0.60%. On the flip side, Nestle down by 0.64%, Tata Steel down by 0.59%, Power Grid down by 0.42%, ITC down by 0.42% and Kotak Mahindra Bank down by 0.38% were the top losers.

Meanwhile, with an aim to review the progress of talks on the proposed free trade agreement (FTA), high-level meetings between India and the European Union (EU) will be held this month. The EU officials are coming for the G20 trade ministers meeting this month in Jaipur. There is a high-level meeting at the minister level on August 26 in the national capital between India and the EU. The G20 Trade and Investment Ministerial Meeting, under India's G20 Presidency, is scheduled at Jaipur on August 24-25.

Commerce Secretary Sunil Barthwal is also likely to meet EU Director General for Trade Sabine Weyand in Jaipur. These meetings would give an impetus to the ongoing negotiations between the two sides on the FTA. So far, five rounds of talks have been held on the agreement. India and the 27-nation bloc resumed negotiations on June 17 last year after a gap of over eight years on the proposed agreements on trade, investments and Geographical Indications (GI).

India had started negotiations for a trade pact with the EU in 2007, but the talks stalled in 2013 as both sides failed to reach an agreement on key issues, including customs duties on automobiles and spirits and the movement of professionals. India's merchandise exports to EU member countries have increased to $74.5 billion in 2022-23 from about $65 billion in 2021-22. Imports also rose to $60 billion in 2022-23 from $51.4 billion in 2021-22. The EU accounts for about 17 per cent of India's total exports and about 8.5 per cent of the country's total imports.

A GI is primarily an agricultural, natural or manufactured product (handicrafts and industrial goods) originating from a definite geographical territory. Typically, such a name conveys an assurance of quality and distinctiveness, which is essentially attributable to the place of its origin. Besides greater market access for its products like textiles, leather, gems and jewellery, the Indian industry is looking for easy access for skilled professionals in the EU markets.

The CNX Nifty is currently trading at 19561.85, up by 44.85 points or 0.23% after trading in a range of 19524.80 and 19583.10. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.31%, Sun Pharma up by 1.99%, Grasim Industries up by 1.67%, Divi's Lab up by 1.32% and Hindalco up by 1.14%. On the flip side, Britannia Industries down by 1.68%, Cipla down by 0.89%, Nestle down by 0.65%, Tata Steel down by 0.55% and Adani Enterprises down by 0.46% were the top losers.

Asian markets are trading mixed; Taiwan Weighted surged 157.77 points or 0.94% to 17,001.45, Jakarta Composite gained 22.23 points or 0.32% to 6,875.07, Straits Times rose 15.53 points or 0.47% to 3,307.92 and Nikkei 225 added 10.93 points or 0.03% to 32,203.68. On the other hand, Shanghai Composite weakened 18.42 points or 0.56% to 3,269.66, KOSPI fell 13.71 points or 0.53% to 2,589.09 and Hang Seng was down by 1.45 points or 0.01% to 19,538.01.