Benchmarks trade in red in morning deals

Indian equity benchmarks were trading in red in morning deals, amid a weak trend in global markets and continuous foreign fund outflows. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,326.74 crore on Friday, according to exchange data. Foreign Portfolio Investors (FPIs) have pulled out over Rs 10,000 crore from Indian equities in the first three weeks of September. Some concern also came with report stating that India’s exports to the European Union (EU), worth $37 billion, could be impacted due to the trade bloc’s proposed Carbon Border Adjustment Mechanism (CBAM) and other green initiatives. The impact would translate into 43 per cent of India’s exports to the EU, which is among India’s key export markets after the United States (US). However, losses remain capped as some support came with Economic Affairs Secretary Ajay Seth’s statement that digital public infrastructure (DPI) has led to savings of over $27 billion in government schemes, and achieve greater financial inclusion in a short period. On the global front, Asian markets are trading mostly in red as central banks around the world warned of higher interest rates for longer and investors braced for key inflation data from the US and Europe. Markets will also be closely watching China's economic data for any signs of a recovery.

The BSE Sensex is currently trading at 65906.49, down by 102.66 points or 0.16% after trading in a range of 65810.22 and 66118.56. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.28%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.55%, Basic Materials up by 0.26% and Metal up by 0.02%, while Capital Goods down by 0.94%, TECK down by 0.68%, IT down by 0.63%, Industrials down by 0.60% and Power down by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.24%, Bajaj Finserv up by 2.38%, Maruti Suzuki up by 1.18%, Ultratech Cement up by 1.07% and Asian Paints up by 1.00%. On the flip side, Larsen & Toubro down by 1.31%, Infosys down by 1.14%, Indusind Bank down by 0.96%, Wipro down by 0.82% and HCL Technologies down by 0.79% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) V Anantha Nageswaran has said inclusion of Indian government bonds into JP Morgan’s benchmark emerging market index from next year will widen investor base, and may lead to appreciation of rupee. He also said there is potential for currency appreciation following inclusion of Indian bonds in JP Morgan index.

Global financial firm JP Morgan has said that it plans to include Indian government bonds or government securities (G-Secs) into its benchmark emerging market index from June, 2024, a move that will bring down borrowing cost for the government. The inclusion of G-Secs will be staggered over a 10-month period from June 28, 2024 to March 31, 2025, indicating one per cent increment on its index weight.

Nageswaran stated ‘Obviously, the investor base for Indian government bonds widens and it will also in a way, relieve the Indian financial institutions from having to be one of the biggest buyers or subscribers of government bonds and they can actually then lend that money for more productive purposes to private sector, the commercial sector individuals etc.’

The CNX Nifty is currently trading at 19638.20, down by 36.05 points or 0.18% after trading in a range of 19612.00 and 19713.65. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 4.30%, Bajaj Finserv up by 2.12%, Maruti Suzuki up by 1.43%, Tata Consumer Product up by 1.25% and UPL up by 1.16%. On the flip side, SBI Life Insurance down by 1.58%, Larsen & Toubro down by 1.31%, Infosys down by 1.15%, Indusind Bank down by 0.99% and Hero MotoCorp down by 0.98% were the top losers.

Asian markets are trading mostly in red; KOSPI dropped 11.56 points or 0.46% to 2,496.57, Jakarta Composite plunged 4.17 points or 0.06% to 7,012.67, Shanghai Composite weakened 12.19 points or 0.39% to 3,120.24 and Hang Seng declined 224.26 points or 1.26% to 17,833.19. On the flip side, Nikkei 225 surged 267.43 points or 0.83% to 32,669.84, Taiwan Weighted added 142.75 points or 0.87% to 16,487.23 and Straits Times rose 9.08 points or 0.28% to 3,213.90.