Sensex, Nifty trade below neutral lines in early afternoon deals

Amid high volatility, Indian equity benchmarks were trading below their neutral lines during early afternoon deals, on the back of selling at Realty and Bankex counters along with negative cues from other Asian markets. Traders remained pessimistic, as economic think tank Global Trade Research Initiative (GTRI) in its latest report has showed that India's exports and imports of goods and services are likely to dip by 2.6 per cent to $1,609 billion in 2023 as against $1,651.9 billion in 2022. However, it noted that robust exports performance in electronic goods, particularly smartphones, and services sectors will help India contain the fall in growth rate of overall trade. Besides, Former Reserve Bank Governor Raghuram Rajan said 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.

On the global front, Asian markets were trading mostly in red, as Indonesia's foreign trade surplus decreased in November from a year ago as exports fell sharply amid an increase in imports. The figures from Statistics Indonesia showed that the trade surplus shrank to $2.4 billion in November from $5.1 billion in the same month last year.

The BSE Sensex is currently trading at 71407.74, down by 76.01 points or 0.11% after trading in a range of 71142.29 and 71552.24. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.43%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Telecom up by 1.00%, Healthcare up by 0.87%, Consumer Durables up by 0.75%, Industrials up by 0.41% and Consumer Discretionary up by 0.40%, while Realty down by 0.91%, Bankex down by 0.42%, FMCG down by 0.26%, Power down by 0.20% and Utilities down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.09%, Reliance Industries up by 1.23%, Bajaj Finance up by 0.79%, Hindustan Unilever up by 0.58% and HCL Tech. up by 0.57%. On the flip side, Power Grid down by 2.21%, JSW Steel down by 1.95%, ICICI Bank down by 1.74%, ITC down by 1.47% and Mahindra & Mahindra down by 0.89% were the top losers.

Meanwhile, Former Reserve Bank of India (RBI) Governor Raghuram Rajan has said that India will still remain a lower middle country if the potential 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. He said if the country does not grow faster, it will grow older (demographically) before it gets richer, which means there is the burden of an aging population to deal with also at that point.

Rajan said ‘the GDP growth in India for the past two quarters was in the region of 7.5 per cent and if one looks at the labor force participation, it is very low and when it comes to female participation, it is the lowest in the G20.’ He said some southern states are growing with regards to population at below reproduction rate, in other words, the fertility rate has fallen below reproduction rate thus slowing the growth.  He said ‘in other words, we will start the process of aging at some point around that time, which leads to the alarming question if we don't grow faster, we will grow old before we grow rich, which means we all have all the burdens of an aging population to deal with also at that point.’ According to him, the current pace of growth is not enough to employ all those who are entering the labour force and insufficient to make the country get richer, before it gets older.

Describing that the government’s vision of 100 years of Independence by 2017 as Amritsar Kaal, the former RBI chief said it is going to be an ear of plenty. He said some of the developed nations moved from manufacturing to services as part of moving up the value chain after they became richer. He noted that those countries are largely services economies with 70 per cent of the workforce in rich countries, typically in the service industry and 20 per cent in manufacturing, five per cent each in construction and agriculture.

The CNX Nifty is currently trading at 21449.30, down by 7.35 points or 0.03% after trading in a range of 21365.35 and 21482.80. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.74%, Sun Pharma Inds. up by 2.12%, Reliance Industries up by 1.37%, Eicher Motors up by 1.28% and Adani Ports &Special up by 1.01%. On the flip side, Power Grid Corp down by 2.17%, JSW Steel down by 1.87%, ICICI Bank down by 1.73%, ITC down by 1.45% and Coal India down by 0.97% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 215.42 points or 1.28% to 16,576.77, Taiwan Weighted lost 21.84 points or 0.12% to 17,652.03, Jakarta Composite plunged 55.19 points or 0.77% to 7,135.80, Straits Times fell 2.58 points or 0.08% to 3,113.93, Nikkei 225 slipped 211.57 points or 0.65% to 32,758.98 and Shanghai Composite weakened 11.76 points or 0.4% to 2,930.80, while KOSPI increased 3.30 points or 0.13% to 2,566.86.