Sensex, Nifty back in green during early noon deals

Erasing all of their losses, Indian equity benchmarks came back in green during early afternoon deals, with both Sensex and Nifty holding notable gains, aided by buying at Energy and FMCG counters along with positive cues from other Asian markets. Domestic sentiments were positive, as the International Monetary Fund (IMF) praised Indian authorities, adding that the economy's strong performance will likely continue going ahead and that it has the potential to grow faster and more sustainably if a comprehensive structural reform agenda is implemented.

However, there was some anxiety among traders, as economic think tank the Global Trade Research Initiative (GTRI) in its latest report has said that India's exports worth $775 million to the UK may be impacted due to Britain's decision to introduce carbon tax on products such as iron and steel, aluminium, fertiliser and cement, from 2027.  The UK government on December 18 decided to implement its Carbon Border Adjustment Mechanism (CBAM) starting 2027.

On the global front, Asian markets were trading mostly in green, after the Bank of Japan retained its massive monetary policy stimulus, as widely expected. The BoJ policy board, led by Governor Kazuo Ueda, unanimously decided to maintain a negative interest rate of 0.1 percent on current accounts that financial institutions maintain at the central bank. The bank also decided to regard the upper bound of 1.0 percent for 10-year JGB yields as a reference in its market operations.

The BSE Sensex is currently trading at 71509.80, up by 194.71 points or 0.27% after trading in a range of 71071.98 and 71569.20. There were 14 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index fell by 0.12%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Energy up by 1.24%, FMCG up by 1.21%, Utilities up by 0.79%, PSU up by 0.75% and Oil & Gas up by 0.75%, while IT down by 0.93%, TECK down by 0.75%, Auto down by 0.63%, Realty down by 0.24% and Metal down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 4.01%, NTPC up by 2.28%, Reliance Industries up by 1.88%, SBI up by 1.26% and Hindustan Unilever up by 1.05%. On the flip side, HCL Tech. down by 1.68%, Wipro down by 1.64%, TCS down by 1.37%, Tech Mahindra down by 1.36% and Bajaj Finserv down by 0.74% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has said that growing at a robust rate due to economic reforms in key sectors like digitisation and infrastructure, India has emerged as a star performer and is projected to contribute more than 16 per cent of the global growth. The IMF released its annual Article IV consultation with India, according to which the South Asian country, underpinned by prudent macroeconomic policies, is on track to be one of the fastest-growing major economies in the world this year. It also said that the government has done several structural reforms, the flagship one being the digitalisation, which has been building up over many years and has put India on a strong platform for increased productivity and growth in the future. 

The IMF in its annual report recommended that policy priorities should focus on replenishing fiscal buffers, securing price stability, maintaining financial stability, and accelerating inclusive growth through comprehensive structural reforms while preserving debt sustainability. India's economy has rebounded strongly from the pandemic to become an important driver of global growth. After surging during FY2022/23, headline inflation has, on average, moderated although it remains volatile. Employment has surpassed the pre-pandemic level and the informal sector continues to dominate while formalisation has progressed.

It further said the financial sector has been resilient, largely unaffected by global financial stress in early 2023. While the budget deficit has eased, public debt remains elevated, and fiscal buffers need to be rebuilt. Globally, India's 2023 G20 presidency has demonstrated the country's important role in advancing multilateral policy priorities. Observing that GDP growth reached 7.2 per cent in fiscal 2022/23, moderating from 9.1 per cent in FY2021/22, the IMF said growth has been supported by robust consumption stemming from pent-up demand of households and strong investment, with historically high levels of public capital expenditure.

The CNX Nifty is currently trading at 21469.25, up by 50.60 points or 0.24% after trading in a range of 21337.75 and 21480.00. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Nestle up by 4.15%, Tata Consumer Products up by 2.35%, NTPC up by 2.23%, Reliance Industries up by 1.90% and Coal India up by 1.74%. On the flip side, Wipro down by 1.63%, Hero MotoCorp down by 1.56%, HCL Tech. down by 1.36%, Eicher Motors down by 1.24% and TCS down by 1.15% were the top losers. 

Asian markets were trading mostly in green; Jakarta Composite gained 31.77 points or 0.45% to 7,151.30, Straits Times rose 9.08 points or 0.29% to 3,122.31, Shanghai Composite strengthened 1.59 points or 0.05% to 2,932.39, KOSPI increased 1.69 points or 0.07% to 2,568.55 and Nikkei 225 surged 460.41 points or 1.39% to 33,219.39, while Hang Seng declined 161.03 points or 0.97% to 16,468.20 and  Taiwan Weighted lost 75.48 points or 0.43% to 17,576.55.