Indices witness correction in early noon deals

Indian equity benchmarks witnessed correction in early afternoon deals, with both Sensex and Nifty trading near their neutral lines, despite positive cues from other Asian markets. Investors got cautious, as the Reserve Bank of India (RBI) in its ‘Inflation expectations survey of households (IESH) November 2023’ has showed that households expect some rise in price and inflationary pressures across major product groups for the year ahead. The survey was conducted during November 211, 2023 in 19 major cities, with responses from 6,036 urban households. 

However, indices managed to remain in green, amid reports that foreign portfolio investors (FPIs) injected Rs 26,505 crore into the Indian equity markets in the first six trading sessions of this month on expectations of political stability after the BJP stormed to power in three major states and robust economic growth.

On the global front, Asian markets were trading mostly in green, after sentiment among Japanese large manufacturers improved at the end of the year. The quarterly survey results from the Ministry of Finance showed that the business survey index of large manufacturers rose to 5.7 in the fourth quarter from 5.4 in the preceding period. Meanwhile, the BSI of non-manufacturing companies declined to 4.4 from 6.0. As a result, the BSI of overall industries dropped to 4.8 from 5.8 in the third quarter.

The BSE Sensex is currently trading at 69844.92, up by 19.32 points or 0.03% after trading in a range of 69782.48 and 70057.83. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.52%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were PSU up by 0.81%, Basic Materials up by 0.79%, Realty up by 0.59%, Metal up by 0.53% and Utilities up by 0.40%, while Healthcare down by 0.70% was the only losing index on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.76%, Power Grid up by 1.20%, Nestle up by 0.83%, Tata Motors up by 0.76% and HCL Tech. up by 0.74%. On the flip side, Axis Bank down by 1.04%, Mahindra & Mahindra down by 0.91%, Asian Paints down by 0.73%, Hindustan Unilever down by 0.70% and Titan down by 0.68% were the top losers.

Meanwhile, NITI Aayog CEO Subrahmanyam has said that India has a twotothreeyear window to capitalise on the global strategy of derisking from China and the government needs to be very alert to come up with a set of policies that make the shift of businesses to India attractive and easier. He further said India is in a sweet spot due to the outcome of geopolitics and the fact that the country has a young workingage population. He said 'so I think, in the next 15 to 20 years time span, India has an opportunity in manufacturing. But the opportunity and the window for India is at best two to three years, because supply chains are unwinding, they're becoming shorter, and they're looking for new geographies. This is going to be a twothree year phenomenon, and then supply chains will get frozen.’ 

Subrahmanyam pointed out that it is not just nonChinese companies but even Chinese companies which want to move out of China because of labour shortages. They are having a shortage of demand because there is a population shift in terms of the age, a shortage of labour supply, the rising cost of labour and the stressed capital markets. Noting that the capital market system is under stress in China, he also said it is a very clear signal to big MNCs from their capitals that derisk from Beijing. He emphasised ‘so even if global trade does not grow in total, there could be a shift in trade from one geography to the other. So that is something which India can capitalize in the short run.’

NITI Aayog CEO also pointed out India's customs rule doesn’t allow import of used goods when companies shift the factory as they move preowned stuff. On the carbon border adjustment mechanism (CBAM), he said Indian companies need to adapt fast to the carbon tax if the major markets are moving in that direction. He added that ‘the fights will be fought by the government at the international level. But at the bottom level, for survival’s sake, I think companies will need to adjust and the government would have to come up with policies to facilitate that.’

The CNX Nifty is currently trading at 20975.10, up by 5.70 points or 0.03% after trading in a range of 20923.70 and 21026.10. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 2.29%, UPL up by 1.79%, ONGC up by 1.74%, Ultratech Cement up by 1.68% and Adani Ports & SEZ up by 1.32%. On the flip side, Dr. Reddy's Lab down by 5.55%, Cipla down by 1.85%, Axis Bank down by 1.09%, Mahindra & Mahindra down by 0.84% and Hindustan Unilever down by 0.77% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted added 34.35 points or 0.2% to 17,418.34, Shanghai Composite strengthened 21.88 points or 0.73% to 2,991.44, KOSPI increased 7.51 points or 0.3% to 2,525.36 and Nikkei 225 surged 483.94 points or 1.48% to 32,791.80, while Hang Seng declined 174.67 points or 1.08% to 16,159.70, Jakarta Composite plunged 62.96 points or 0.89% to 7,096.64 and Straits Times fell 26.69 points or 0.87% to 3,084.04.