Sensex, Nifty hover near neutral lines

Indian equity benchmarks were hovering near their neutral lines in early afternoon deals, with both Sensex and Nifty managing to keep their heads above water, aided by positive cues from other Asian markets. The street took a note of reports that India’s inflation based on wholesale price index (WPI) remained in the negative territory for the fifth straight month in August 2023 at (-) 0.52% as against (-) 1.36% recorded in July 2023. The negative rate of inflation in August is primarily due to fall in prices food products. Traders were cautious, as the European Central Bank is set to decide on Thursday whether to raise its key interest rate to a record peak in what should be its final step in the fight against inflation, or take a break as the economy deteriorates. 

On the global front, Asian markets were trading higher, after Hong Kong's industrial production advanced in the second quarter, primarily driven by strong gains in the output of miscellaneous manufacturing industries and textiles and apparel. The provisional data from the Census and Statistics Department showed that the index of industrial production for manufacturing industries as a whole rose 2.6 percent annually in the second quarter, though slower than the 3.8 percent increase in the previous quarter.

The BSE Sensex is currently trading at 67477.13, up by 10.14 points or 0.02% after trading in a range of 67407.46 and 67771.05. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.71%, while Small cap index was up by 1.24%.

The top gaining sectoral indices on the BSE were Metal up by 1.66%, Realty up by 1.11%, Oil & Gas up by 1.08%, PSU up by 0.93% and Industrials up by 0.72%, while Consumer Durables down by 0.12% was the only losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 2.05%, Tech Mahindra up by 1.83%, Mahindra & Mahindra up by 1.05%, Nestle up by 0.77% and HCL Technologies up by 0.57%. On the flip side, Asian Paints down by 1.29%, ITC down by 0.52%, Titan Company down by 0.39%, ICICI Bank down by 0.38% and Sun Pharma down by 0.37% were the top losers.

Meanwhile, Commerce Minister Piyush Goyal has said the government's initiative to increase the use of green energy and some policy interventions will help the Indian industry tide over the impact of the European Union’s (EU's) decision to impose a carbon tax on sectors like steel and aluminium. 

Goyal said that India is in dialogue with the European Union and with other countries to see how these new initiatives like CBAM (carbon border adjustment mechanism) will impact Indian industry and manufacturers. However, he assured the industry that the government will protect its interest.

The EU is introducing the CBAM from October 1 this year. CBAM will translate into a 20-35 per cent tax on select imports into the EU starting January 1, 2026. The CBAM or carbon tax (a kind of import duty) will come into effect from January 1, 2026, but from October 1 this year, domestic companies from seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products, will have to share data with regard to carbon emissions with the EU. In 2022, India's 27 per cent exports of iron, steel, and aluminium products of value $8.2 billion went to the EU.

The CNX Nifty is currently trading at 20077.55, up by 7.55 points or 0.04% after trading in a range of 20062.15 and 20167.65. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.04%, UPL up by 3.27%, Tata Steel up by 2.05%, ONGC up by 1.96% and Tech Mahindra up by 1.74%. On the flip side, Asian Paints down by 1.38%, ITC down by 0.62%, Adani Ports and Special Economic Zone down by 0.61%, HDFC Life Insurance down by 0.53% and Titan Company down by 0.51% were the top losers.

All Asian markets were trading higher; KOSPI increased 38.19 points or 1.48% to 2,572.89, Nikkei 225 surged 461.58 points or 1.39% to 33,168.10, Taiwan Weighted added 226.05 points or 1.34% to 16,807.56, Straits Times rose 23.19 points or 0.72% to 3,242.12, Hang Seng advanced 86.28 points or 0.48% to 18,095.50, Jakarta Composite gained 22.76 points or 0.33% to 6,958.24 and Shanghai Composite strengthened 1.91 points or 0.06% to 3,124.98.