Domestic markets trade flat in early noon session

Domestic equity markets were trading flat in early noon session as investors preferred to stay on the sidelines ahead of inflation data and key earnings this week. Weak cues from global markets weighed on the domestic sentiments. Traders were concerned with a private report stating that India's retail inflation likely edged up in December on higher food prices but stayed within the Reserve Bank of India's target range for a fourth consecutive month. However, downside remained capped as the World Bank in its Global Economic Prospects report has retained India’s economic growth forecast at 6.3% for the current financial year (FY2023-24 -- April 2023 to March 2024). On the Sectoral front, traders were seen pilling up position in TECK, Consumer Durables, IT, Telecom and Industrials, while selling was witnessed in Oil & Gas, PSU, Realty, Energy and FMCG.  

On the global front, Asian markets were trading mostly in red following mostly negative cues from the US markets overnight. Traders were cautious as the World Bank warned that global growth in 2024 is set to slow for a third year in a row amidst mounting geopolitical tensions and slowing growth in most major economies.  Back home, Adani group related stocks were in focus as Adani Group will invest 2 trillion rupees ($24 billion) in five years in the green energy and renewable energy sectors in the western state of Gujarat. 

The BSE Sensex is currently trading at 71401.75, up by 15.54 points or 0.02% after trading in a range of 71110.98 and 71498.83. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.26%, while Small cap index up by 0.07%.

The top gaining sectoral indices on the BSE were TECK up by 0.47%, Consumer Durables up by 0.35%, IT up by 0.34%, Telecom up by 0.15% and Industrials up by 0.07%, while Oil & Gas down by 1.21%, PSU down by 1.09%, Realty down by 1.08%, Energy down by 0.94% and FMCG down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were HCL up by 2.57%, ICICI Bank up by 1.09%, TCS up by 0.73%, Bharti Airtel up by 0.65% and Tech Mahindra up by 0.61%. On the flip side, NTPC down by 2.72%, Ultratech Cement down by 1.10%, Axis Bank down by 1.00%, Bajaj Finserv down by 0.81% and ITC down by 0.72% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that the weighted average rates of state debt continued to remain at an over two-year high of 7.72 per cent at the second weekly auction of the quarter on January 9, 2023, making it the highest so far this fiscal (FY24). Accordingly, the spread between 10-year state bonds and benchmark G-sec yield also remained firm at 54 bps, with both inching up by 1 bps from the previous week. 

According to the report, nine states raised Rs 19,300 crore from the market selling government securities, which was 34 per cent lower than the amount indicated for this week in the auction calendar. Despite lower supply, the weighted average cut-off inched up to 7.72 per cent, which is the highest so far in FY24 from 7.71 per cent last week.

The report further said the payout increased in spite of the weighted average tenor remaining unchanged at 11 years. Both this had the spread between the cut-off of the 10-year state bonds and the 10-year benchmark G-sec yield inching up to 54 bps from 53 bps last week, which again is the highest so far this fiscal. Both the rates are also at an over two-year high. Cumulatively, the state borrowed Rs 6.4 lakh crore from the market so far this fiscal, which is 34 per cent more than they had raised a year ago at Rs 4.8 lakh crore.

The CNX Nifty is currently trading at 21536.85, down by 8.00 points or 0.04% after trading in a range of 21448.65 and 21573.90. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 3.03%, HCL up by 2.59%, Cipla up by 2.23%, Adani Ports up by 1.43% and ICICI Bank up by 1.09%. On the flip side, NTPC down by 2.91%, ONGC down by 2.72%, BPCL down by 2.23%, Divi's Lab down by 1.37% and Coal India down by 1.34% were the top losers. 

Asian markets were trading mostly in red; Hang Seng declined 83.76 points or 0.52% to 16,106.26, Taiwan Weighted lost 69.86 points or 0.4% to 17,465.63, Straits Times fell 34.05 points or 1.08% to 3,163.91, KOSPI dropped 18.10 points or 0.71% to 2,543.14 and Shanghai Composite weakened 6.68 points or 0.23% to 2,886.57. However, Jakarta Composite gained 46.71 points or 0.64% to 7,246.91 and Nikkei 225 surged 678.54 points or 1.97% to 34,441.72.