Benchmarks trade flat in early deals

Indian equity benchmarks started the holiday truncated week on cautious note as investors preferred to remain on sidelines amid Israel-Gaza tensions and high US bond yields. Markets are trading flat in early deals on Monday. Some cautiousness came in as the Reserve Bank of India’s data (October 2023 bulletin) said net foreign direct investment (FDI) in India, inflows minus outflows, declined sharply in April-August this year to $2.99 billion from $18.03 billion in the same period last year on moderation in global activities and a rise in repatriation. Traders took note of Finance Minister Nirmala Sitharaman’s statement that even though India’s debt levels are not very high compared global average, the Central government is looking at ways to bring down the liabilities so as not to burden future generations. However, downside remained capped as the RBI data showed that after multiple weeks of decline, India’s forex reserves increased by $1.153 billion to $585.895 billion during the week ended October 13. In the previous reporting week, the overall reserves had dropped by $2.166 billion to $584.742 billion. 

Global markets remained under pressure, with all the Asian markets are trading in red amid rising bond yields, concerns over the outlook for interest rates and an escalating conflict in the Middle East. Back home, the US has emerged as India’s biggest trading partner during the first half of the current financial year despite global economic uncertainties and declining exports and imports. According to the provisional data of the commerce ministry, the bilateral trade between India and the US has declined by 11.3 per cent to $59.67 billion during April-September 2023 against $67.28 billion in the same period last year. In stock specific development, ICICI Bank traded higher as it registered 35.7% year-on-year growth in standalone profit and a 24 percent rise in net interest income in the July-September quarter of the fiscal year 2023-24 (Q2), with a significant fall in bad loan provisions.

The BSE Sensex is currently trading at 65408.17, up by 10.55 points or 0.02% after trading in a range of 65342.58 and 65453.92. There were 13 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.28%, while Small cap index was down by 1.00%.

The top gaining sectoral indices on the BSE were Power up by 0.09%, FMCG up by 0.09%, Bankex up by 0.04% and Auto up by 0.01%, while Telecom down by 1.13%, Realty down by 0.85%, Metal down by 0.80%, Industrials down by 0.76% and IT down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.32%, ICICI Bank up by 1.02%, Mahindra & Mahindra up by 0.88%, Power Grid up by 0.84% and Ultratech Cement up by 0.64%. On the flip side, Kotak Mahindra Bank down by 1.62%, Tata Steel down by 1.10%, TCS down by 1.08%, Tech Mahindra down by 0.82% and Larsen & Toubro down by 0.81% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharman has said the government is mindful of the fiscal deficit management and will ensure the burden of servicing debt is not passed on to next generation. She said the government is looking at the ways in which it can bring down the overall debt. She said ‘We are conscious of matters related to macro-economic stability of the country and responsibility with which we deal with our fiscal and also the fiscal management and so for every decisions that we take today, we are conscious of what burden is going to leave for the next generations’. She said it is very easy to be profligate and burden the coming generations with the debt that you will be sitting with.

She also said ‘We are conscious of the debt of government of India. Compared to many others, it might not be as high as it is, but even then, we are consciously looking at experiments in different parts of the world’. She said the government actively look at the data related to debt of some emerging market countries and how they are managing them. The government is successful in managing debt burden because efforts are very well streamlined to meet India's aspirational requirements, but deal with it with a sense of responsibility so that coming generations don't feel the burden. During Covid days, she said, the government spent public money in creating public infrastructure so that there is better return for every rupee rather than go by the temptation of giving money in the hands of people who were suffering.

Observing that India is opening up and bringing greater transparency through the digital economy, Sitharaman said, there's no more powerful tool than digitisation to empower citizens, who otherwise would've remained very far from their developmental aspirations being met. She said ‘Jan-Dhan accounts have been the biggest instrument of bringing financial inclusion to the country. When it was launched in 2014, people raised questions, saying that these would be zero-balance accounts & would be a burden on the Public Sector Banks (PSBs)’. She also highlighted the challenges posed by global terror and stressed that investors and businesses will have to take into account such factors while making investment decisions.

The CNX Nifty is currently trading at 19,542.60, down by 0.05 points after trading in a range of 19,556.85 and 19,514.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 1.25%, ICICI Bank up by 0.94%, Divi's Laboratories up by 0.86%, Mahindra & Mahindra up by 0.82% and Power Grid up by 0.81%. On the flip side, Kotak Mahindra Bank down by 1.37%, Grasim Industries down by 1.35%, Tata Steel down by 1.14%, Bajaj Auto down by 1.05% and TCS down by 0.99% were the top losers on Nifty.

Asian markets are trading lower; Nikkei 225 slipped 227.95 points or 0.73% to 31,031.41, Taiwan Weighted plunged 150.38 points or 0.91% to 16,290.34, Jakarta Composite lost 85.29 points or 1.25% to 6,763.88, Shanghai Composite weakened 23.84 points or 0.81% to 2,959.22, KOSPI fell 9.93 points or 0.42% to 2,365.07 and Straits Times was down by 8.16 points or 0.27% to 3,068.53.