Markets trade slightly lower amid consolidation

Indian equity benchmarks made negative start on Monday, after rally in the previous session, tacking weakness in Asian counterparts as traders cautiously await the Bank of Japan's final monetary policy meeting of the year later in the week, with the central bank expected to maintain its ultra-dovish stance. Though, domestic markets managed to trim some of their opening losses and are trading slightly lower in early deals led by buying interest in IT and select financial shares. Some cautiousness came in with Former Reserve Bank Governor Raghuram Rajan’s statement that India will still remain a lower middle country if the growth rate remains at 6 per cent annually without any rise in population by 2047 (Amrit Kaal) and will be reaching the end of the demographic dividend by then. 

However, down side remained limited as the government data showed that India's merchandise trade deficit fell to $20.58 billion in November. It was primarily driven by a fall in imports, by 4.3 per cent, to $54.48 billion as compared to $56.95 billion in the same month last year, while the exports fell less sharply by 2.8 per cent to $33.90 billion from $34.89 billion a year ago. On the sectoral front, sugar industry stocks are in focus as industry body ISMA on Friday said the sudden ban on the use of cane juice for ethanol will have an adverse impact on capacity utilisation of mills, putting at risk their Rs 15,000 crore investment in the last three years to set up plants for green fuel.

The BSE Sensex is currently trading at 71343.60, down by 140.15 points or 0.20% after trading in a range of 71142.29 and 71534.14. 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 0.11%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.10%, Telecom up by 0.77%, Consumer Durables up by 0.70%, Auto up by 0.30% and Metal up by 0.28%, while Realty down by 0.74%, Bankex down by 0.46%, IT down by 0.37%, FMCG down by 0.34% and TECK down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.46%, Reliance Industries up by 0.83%, Titan Company up by 0.81%, Bajaj Finance up by 0.73% and Tata Steel up by 0.48%. On the flip side, ITC down by 1.37%, ICICI Bank down by 1.12%, Power Grid down by 0.93%, Indusind Bank down by 0.84% and Mahindra & Mahindra down by 0.84% were the top losers.

Meanwhile, expressing optimism over India’s growth, former Niti Aayog Vice Chairman Arvind Panagariya has said that the country will become the world’s third largest economy by 2026 as its Gross Domestic Product (GDP) in current dollar terms will reach $5 trillion in that year and further rise to $5.5 trillion in 2027. He said it is unlikely that GDP in current dollar terms of either Germany or Japan will cross $5 trillion-mark in the coming three years. Japan will have to sustain a growth rate of 3.5 per cent in current dollar terms to reach $5.03 trillion in 2027 from its 2022 level of $4.2 trillion. At the 4 per cent annual growth rate, German GDP will rise from $4.4 trillion in 2023 to $4.9 trillion in 2026 and $5.1 trillion in 2027.

He further said India has grown at an annual average rate of 10.22 per cent in current dollar terms. At this rate, India’s GDP in current dollars will reach $5 trillion in 2026 and $5.5 trillion in 2027. This means that there are good prospects that India will become the world’s third economy by the end of 2026, sooner than nearly all current predictions. To realise its full potential, Panagariya said India must take the steps necessary to help its economic units grow larger.

He noted ‘Small habitations, small farms, and small enterprises are intimately linked. Reforms that will help the enterprises in industry and services grow larger will create job opportunities for the masses, which will, in turn, pave the way for workers to migrate from rural to urban areas’. According to him, such migration will automatically increase land per worker in farming while also bringing more and more of the population to where development is.

He added ‘With the population becoming progressively concentrated in urban agglomerations, we will also see larger economic units replace some smaller ones in areas such as schools and colleges’. He said ‘I am confident we are on the cusp of a new chapter in India’s history’. He also said while the next two decades will see the fastest transformation in the country’s history, given the large economic base already established and a high expected growth rate, the following three will witness unsurpassed and steadily rising prosperity.

The CNX Nifty is currently trading at 21432.30, down by 24.35 points or 0.11% after trading in a range of 21365.35 and 21472.80. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.73%, Dr. Reddy's Lab up by 1.54%, Sun Pharma up by 1.52%, Eicher Motors up by 1.50% and Divi's Lab up by 1.48%. On the flip side, Coal India down by 1.66%, ITC down by 1.22%, ICICI Bank down by 1.22%, LTIMindtree down by 0.84% and Indusind Bank down by 0.84% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 268.27 points or 0.82% to 32,702.28, Hang Seng declined 155.97 points or 0.94% to 16,636.22, Taiwan Weighted lost 48.3 points or 0.27% to 17,625.57, Jakarta Composite weakened 16.18 points or 0.23% to 7,174.81, Straits Times fell 11.88 points or 0.38% to 3,104.63 and Shanghai Composite was down by 3.77 points or 0.13% to 2,938.79, while KOSPI was up by 4.68 points or 0.18% to 2,568.24.