Markets trade flat in early deals; Manufacturing PMI eyed

Indian equity benchmarks made negative start on Wednesday amid nervousness ahead of the US Federal Reserve's meeting and continued Middle East worries. Markets soon turned volatile and are trading flat in early deals on Wednesday ahead of manufacturing PMI data to be out later in the day for more directional cues. Foreign fund outflows dented sentiments. Foreign institutional investors sold shares worth Rs 696.02 crore on October 31, provisional data from the National Stock Exchange showed. Traders are concerned as the output of eight key infrastructure industries - known as the core sector - slowed to a four-month low of 8.1 per cent in September, on the back of a high base and a slowdown in seven constituent sectors. However, downside remained capped as Shaktikanta Das, governor of the RBI, said India's second-quarter gross domestic product (GDP) growth figure, in all probability, will surprise everyone on the upside.

On the global front, most of the Asian markets are trading higher following overnight gains on Wall Street. Traders seemed reluctant to make significant moves and will pay close attention to the Fed's accompanying statement for clues about the outlook for interest rates. Back home, sugar industry stocks are in focus as Indian Sugar Mills Association (ISMA) said India’s gross sugar production is estimated to decline by 8% to 33.7 million tonne (MT) in the 2023-24 season (October-September) compared to previous season. In stock specific development, India Bulls Real Estate jumped after narrowing its Q2 net loss.

The BSE Sensex is currently trading at 63812.18, down by 62.75 points or 0.10% after trading in a range of 63680.94 and 63896.05. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.06%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Realty up by 1.40%, Oil & Gas up by 0.86%, Telecom up by 0.72%, Energy up by 0.56% and FMCG up by 0.36%, while Metal down by 0.36%, Bankex down by 0.31%, Basic Materials down by 0.19% and Power down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 0.65%, Wipro up by 0.48%, ITC up by 0.44%, Bajaj Finserv up by 0.36% and Tech Mahindra up by 0.34%. On the flip side, JSW Steel down by 1.37%, Kotak Mahindra Bank down by 0.71%, Asian Paints down by 0.64%, Axis Bank down by 0.63% and Power Grid down by 0.54% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said the growth momentum in the country continues to be strong, and the official data for GDP expansion in the second quarter will surprise on the upside. Das said inflation is the first priority for the RBI at the moment. He said ‘… looking at the momentum of economic activity, looking at a few early data points that have come in a few early indicators, I can say that the second quarter GDP number as and when it is released at the end of November, in all probability will surprise everyone on the upside’.

He said the RBI estimates the real GDP growth for the second quarter of the current fiscal to come at 6.4 per cent. He said geopolitical uncertainties are the biggest risk to global growth at present, but India is better placed to handle it as compared to other countries. The governor said rates in advanced countries and other international factors are taken into consideration while formulating the monetary policy, but was quick to add that eventually the monetary policy is driven by domestic factors of inflation and growth. He noted that ‘Our monetary policy is not influenced by what is the differential in bond yields (between India and the US) or if currency is depreciating’.

About the country's inclusion in the J P Morgan global bond indices, Das initially admitted that this is a double-edged sword with positives and negatives, but sought to allay fears saying any large volatilities in the financial markets are unlikely. He said the move can get an additional $25 billion into the country as estimated by market participants, but it can potentially lead to an outflow as passive investors' money can move out as the country weightage moves. He said the move to include the country in the indices announced last month speaks of confidence in the country's economy and the financial markets.

The CNX Nifty is currently trading at 19078.35, down by 1.25 points or 0.01% after trading in a range of 19032.60 and 19096.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.73%, Bajaj Auto up by 1.26%, Hero MotoCorp up by 1.25%, ONGC up by 0.94% and Wipro up by 0.72%. On the flip side, JSW Steel down by 0.99%, Kotak Mahindra Bank down by 0.75%, Axis Bank down by 0.62%, Asian Paints down by 0.57% and Power Grid down by 0.54% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 650.74 points or 2.07% to 31,509.59, Taiwan Weighted rose 25.84 points or 0.16% to 16,027.11, KOSPI increased 20.59 points or 0.9% to 2,298.58, Hang Seng advanced 8.96 points or 0.05% to 17,121.44, Straits Times added 6.23 points or 0.2% to 3,073.97 and Shanghai Composite was up by 4.87 points or 0.16% to 3,023.64, while Jakarta Composite was down by 52.39 points or 0.78% to 6,699.82.