Sensex, Nifty hover near neutral lines

Indian equity benchmarks continued to hover near their neutral lines in early afternoon deals, amid negative cues from other Asian markets along with selling pressure at IT and Banking counters. Concerns over China's property sector and the possible impact of high oil prices on inflation and interest rates also dampened sentiments.  Traders failed to take any senses of relief, with Union Minister Narayan Rane’s statement that India is expected to become the third largest economy by 2030 and Uttar Pradesh will have a major role to play.

On the global front, Asian markets were trading mostly in red, after Singapore's industrial production registered a double-digit contraction in August. The Economic Development Board reported that industrial output declined 12.1 percent on a yearly basis in August, following a 1.1 percent drop in July. Production has been falling since October 2022. Excluding biomedical manufacturing, industrial production plunged 13.3 percent from a year ago.

Back home, banking stocks were in watch, as the Reserve Bank of India (RBI) Governor Shaktikanta Das has said the central bank is not comfortable with the gross non-performing assets (GNPAs) ratio of 8.7 per cent in urban cooperative banks (UCBs) and asked them to work towards improving the same.

The BSE Sensex is currently trading at 66016.97, down by 6.72 points or 0.01% after trading in a range of 65909.41 and 66078.26. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.20%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Telecom up by 1.14%, Basic Materials up by 0.60%, Utilities up by 0.60%, Industrials up by 0.54% and Metal up by 0.54%, while IT down by 0.38%, Bankex down by 0.31%, TECK down by 0.22% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.57%, Bajaj Finance up by 0.95%, NTPC up by 0.90%, Bharti Airtel up by 0.82% and Larsen & Toubro up by 0.79%. On the flip side, Indusind Bank down by 1.31%, Kotak Mahindra Bank down by 1.11%, Asian Paints down by 1.06%, Tech Mahindra down by 1.04% and Infosys down by 0.58% were the top losers.

Meanwhile, Credit rating agency ICRA in its latest report has said that business opportunities worth Rs 2.75 lakh crore are expected to open up for Indian Defence entities in the next two years, 22% of which (Rs 60,000 crore) would be available for the private sector entities. This is in the backdrop of the sustained increase in annual budgetary allocations, coupled with the government’s focus on reducing import dependence and the ambitious target of Rs. 1.75 lakh crore annual Defence production by FY2025. 

ICRA expects the share of private entities in the total production to gradually improve to 22% and their production to grow at a CAGR of around 20% in the next three years to reach Rs 34,000 crore by FY2026. It stated that the government has taken numerous measures in the past few years to enhance private sector participation, including tenders exclusively for the private sector, discontinuation of excise/customs duty exemptions, which were hitherto enjoyed by the Defence Public Sector Undertakings (DPSUs).

According to the report, sustaining the commitment towards augmentation in the area of modernisation and infrastructure development of the Defence services, the Government of India, in the Union Budget 2023-2024, continued the increasing trend of capital outlay allocation with a YoY increase of 6.6% in the FY2023-24 BE to Rs. 1.62 lakh crore, resulting in a CAGR of 10.1% during FY2019-FY2024. It noted that numerous policy initiatives, with Atmanirbhar Bharat at its core, have helped enhance domestic design capabilities, encouraged investments and enabled the sector to grow tremendously in the past few years, thus boosting the long-term prospects of the Indian Defence manufacturing sector.

The CNX Nifty is currently trading at 19682.50, up by 7.95 points or 0.04% after trading in a range of 19649.80 and 19699.35. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.38%, Bajaj Auto up by 1.63%, Tata Steel up by 1.45%, Hero MotoCorp up by 1.10% and Dr Reddy's Laboratories up by 1.04%. On the flip side, Indusind Bank down by 1.29%, Tech Mahindra down by 1.12%, Asian Paints down by 1.08%, Kotak Mahindra Bank down by 1.08% and Infosys down by 0.56% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 363.57 points or 1.13% to 32,315.05, Hang Seng declined 208.63 points or 1.18% to 17,520.66, Taiwan Weighted lost 176.16 points or 1.08% to 16,276.07, KOSPI dropped 32.79 points or 1.33% to 2,462.97. Jakarta Composite plunged 16.16 points or 0.23% to 6,982.22 and Shanghai Composite weakened 10.81 points or 0.35% to 3,104.80, while Straits Times rose 1.73 points or 0.05% to 3,217.13.