Benchmarks trade flat with negative bias in early deals

Indian equity benchmarks made cautious start on Friday amid mixed global cues. Markets soon gathered momentum but failed to hold it and are trading flat with negative bias in early deals. Selling in pharma and power stocks dragged the markets down. Persistent selling by FIIs dampened sentiments in domestic markets. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 3,007.36 crore on September 21. Escalating diplomatic tensions between India and Canada also impacting sentiments in the markets. India temporarily suspended visa operations with Canada for an indefinite period due to alleged ‘security threats’ against diplomatic staff, amidst a diplomatic crisis that arose following the latter’s allegation that India is responsible for the killing of a Sikh activist. 

On the global front, Asian market are trading mostly higher as traders await the Bank of Japan's decision on interest rates after the BoJ wraps up its monetary policy meeting later in the day. The BoJ is widely expected to keep its benchmark lending rate unchanged at -0.1 percent. 

Back home, in a positive development to India's debt market, JPMorgan will add Indian government bonds to its benchmark emerging-market index, a keenly awaited event that could drive billions of foreign inflows. In stock specific movements, NBCC rose on order win of Rs 100 crore. However, Glenmark Pharma traded under pressure on plan to divest 75% stake in Glenmark Life.

The BSE Sensex is currently trading at 66192.50, down by 37.74 points or 0.06% after trading in a range of 66163.39 and 66417.95. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.20%, while Small cap index was down by 0.13%.

The gaining sectoral indices on the BSE were Realty up by 0.46%, Bankex up by 0.33%, Capital Goods up by 0.27%, Auto up by 0.19%, PSU up by 0.19% while, Healthcare down by 1.22%, Power down by 0.71%, Utilities down by 0.68%, Metal down by 0.63%, IT down by 0.55% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.13%, Larsen & Toubro up by 1.04%, Mahindra & Mahindra up by 1.02%, SBI up by 1.01% and Bajaj Finserv up by 0.88%. On the flip side, Wipro down by 2.01%, Power Grid Corp down by 1.96%, Sun Pharma down by 1.19%, Tata Steel down by 1.10% and Ultratech Cement down by 0.88% were the top losers.

Meanwhile, with the support of pace of financial sector development and demographic advantage, the Reserve Bank of India (RBI) Deputy Governor Michael D Patra has said India will be a $5 trillion economy and the third largest in the world by market exchange rates by 2027. He said it is widely believed that during the next two decades -- if not for longer -- the centre of gravity of the global economy will shift eastward to Asia.  He said the IMF’s Regional Economic Outlook for Asia and the Pacific indicates that this region will contribute about two-thirds of global growth in 2023 itself and India will account for a sixth of world output growth in 2023 and 2024. 

In terms of market exchange rates, he said India is the fifth-largest economy in the world and the third-largest economy on the basis of purchasing power parity. He added a key driver in this transformation is likely to be the window of a demographic dividend that opened up in 2018 and will probably last till the 2040s, going by fertility and mortality rates. He also said ‘we are the most populous country in the world at 1.4 billion and the youngest at an average age of 28 years. The other major catalyst of India's progress will be the pace and quality of financial sector development’.

For a high saving rate economy, like the rest of Asia, he said a modern, efficient, and soundly functioning financial sector is essential for mobilising the resource requirements of India’s developmental aspirations. While the jury is still out on whether economic progress is finance or demand-led, Patra said a wealth of empirical evidence points to Asia’s growth trajectory being that of the real economy leading financial development, and India is no exception. He said there is also stylised evidence that the composition of the financial sector across Asia is changing, with hitherto bank-dominated systems giving space to alternative financial intermediaries like non-banks and capital markets, and added these developments, in turn, generate impulses of growth for the rest of the economy. 

In India, he said ‘additional dimensions have opened up exciting possibilities for leveraging our growth potential - the digital revolution; transformation of the payment and settlement ecosystem; and innovations in financial inclusion’. He said ‘more recently, India’s exponential expansion of the usage of space technology is reshaping every aspect of our lives, including the financial sector’. He noted the approach to the financial sector in India is reflecting a new paradigm in which macroeconomic and financial stability are seen as strongly complementary and providing the foundation for medium-term growth prospects. He also pointed out prudence is taking precedence over-exuberance, and this is reflected in the steady build-up of all types of buffers.

The CNX Nifty is currently trading at 19714.70, down by 27.65 points or 0.14% after trading in a range of 19707.20 and 19792.15. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.22%, Larsen & Toubro up by 1.09%, Mahindra & Mahindra up by 1.08%, SBI up by 0.95% and HDFC Life Insurance up by 0.81%. On the flip side, Cipla down by 2.49%, Wipro down by 2.16%, Dr. Reddy's Lab down by 1.93%, Power Grid down by 1.79% and Sun Pharma down by 1.25% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 213.27 points or 1.21% to 17,868.68, Jakarta Composite gained 33.49 points or 0.48% to 7,024.96, Shanghai Composite strengthened 23.75 points or 0.76% to 3,108.45, Taiwan Weighted added 7.01 points or 0.04% to 16,323.68 and Straits Times was up by 3.03 points or 0.09% to 3,205.84. On the other hand, KOSPI fell 3.66 points or 0.15% to 2,511.31 and Nikkei 225 was down by 70.39 points or 0.22% to 32,500.64.