Equity benchmarks wipe out opening gains to trade lower in early deals

Indian equity benchmarks made flat-to-positive start on Tuesday amid mixed Asian cues. Soon, markets turned volatile and slipped below neutral lines. Indices are trading lower with marginal cut in early deals amid selling in stocks such as Power Grid, Mahindra & Mahindra and Bharti Airtel. Foreign fund outflows dented sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 1,892.77 crore on August 07. Traders were concerned as the team, led by researchers at the University of East Anglia (UEA) and the University of Cambridge, UK, found that India's sovereign credit rating could be downgraded due to the impact of climate change and the rise in temperature volatility by as early as the 2030s. Though, broader indices are outperforming larger peers with gains of around 0.30% each.

On the global front, Asian markets are trading mixed, following the broadly positive cues from Wall Street overnight, as traders remain cautious and are reluctant to make big moves ahead of crucial reports on key inflation readings from China and the U.S. later in the week, which could affect the outlook for interest rates. Meanwhile, the average of household spending in Japan was down 4.2 percent on year in June, the Ministry of Internal Affairs and Communications said - coming in at 275,545 yen.

Back home, banking stocks are in focus with report that the aggregate net profit more than doubled to Rs 34,418 crore in Q1 owing to treasury gains and healthy growth in net interest income (NII), backed by strong credit offtake. In stocks specific development, Adani Green rallied after Qatar Investment Authority acquired a 2.7 percent of its equity at Rs. 920 each for a total amount of Rs 3,956 crore. However, Tata Chemicals slipped after reporting a decline in quarterly profit on lower prices and volumes.

The BSE Sensex is currently trading at 65920.80, down by 32.68 points or 0.05% after trading in a range of 65882.44 and 66057.53. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.29%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.62%, Healthcare up by 0.53%, PSU up by 0.40%, Oil & Gas up by 0.38% and Energy up by 0.33%, while Telecom down by 0.14%, FMCG down by 0.09%, TECK down by 0.08%, Power down by 0.02% and Utilities down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 0.69%, Wipro up by 0.43%, Tata Motors up by 0.40%, Asian Paints up by 0.40% and SBI up by 0.37%. On the flip side, Power Grid down by 2.06%, Mahindra & Mahindra down by 0.79%, Bharti Airtel down by 0.45%, Nestle down by 0.37% and Infosys down by 0.31% were the top losers.

Meanwhile, Sanjeev Sanyal, Member of the Economic Advisory Council to the Prime Minister, has said India should be rated at least one or two grades higher than what it is at present by global rating agencies in terms of sovereign rating. He added there is no reason for India to be at the bottom of the investment grade. He said India just about makes it past the investment grade in the ratings of the agencies, which is ‘utterly absurd’.

He said frameworks of the rating agencies should be questioned, and India should realise that those can be replaced with ‘ease’. He added ‘Why should we have to abide by rules and norms of the West, which we had no role in framing....just like the several indices where we feature below 100’.

Meanwhile, S&P Global Ratings has long-term sovereign credit ratings at 'BBB-' with a 'stable' outlook for India. Moody's Investors Service has a 'Baa3' sovereign credit rating on India, with a stable outlook. Fitch has sovereign rating at 'BBB-' (Triple B Minus) with a Stable Outlook for India. This is the last investment grade rating.

The CNX Nifty is currently trading at 19592.85, down by 4.45 points or 0.02% after trading in a range of 19578.65 and 19634.40. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.08%, Cipla up by 2.35%, Dr. Reddy's Lab up by 1.17%, LTIMindtree up by 0.73% and Titan Company up by 0.54%. On the flip side, Power Grid down by 2.02%, Adani Ports & SEZ down by 0.93%, Eicher Motors down by 0.84%, Mahindra & Mahindra down by 0.84% and Britannia Industries down by 0.68% were the top losers.

Asian markets are trading mixed; Hang Seng declined 252.29 points or 1.31% to 19,285.63, Taiwan Weighted lost 118.03 points or 0.7% to 16,877.97, KOSPI dropped 1.66 points or 0.06% to 2,579.05 and Straits Times fell 0.53 points or 0.02% to 3,309.34. On the other hand, Nikkei 225 surged 91.21 points or 0.28% to 32,345.77, Jakarta Composite gained 7.73 points or 0.11% to 6,894.10 and Shanghai Composite was up by 0.46 points or 0.01% to 3,269.29.