Domestic indices wipe out opening losses to trade in green in early deals

Indian equity benchmarks made negative start on Wednesday, following the mixed cues from Wall Street overnight and weakness in Asian counterparts, as traders are cautious and look ahead to the US Fed's interest rate decision later in the day. The Fed is widely expected to leave interest rates unchanged, but the accompanying statement could have a significant impact on the outlook for interest rates. Foreign fund outflows also dented sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 1,970.52 crore on January 30, provisional data from the NSE showed.

However, domestic indices soon wiped out losses and entered into green terrain. Sensex and Nifty are trading higher with marginal gains in early deals as investors went for bargain hunting after previous session’s sharp fall. Some support came in as the International Monetary Fund (IMF) raised India’s growth projection for 2024-25 (FY25) by 20 basis points (bps) to 6.5 per cent in its World Economic Outlook (WEO) update, citing buoyant domestic spending and improved global growth prospects. 

On the sectoral front, fertilizer industry stocks are in focus after the government allowed a profit margin of up to 12 per cent for manufacturers of potassium and potassic fertilisers as part of guidelines issued to evaluate the reasonableness of maximum retail prices for these fertilisers. In stock specific development, KPI Green soars as its arm wins 5 MW solar power project.

The BSE Sensex is currently trading at 71166.70, up by 26.80 points or 0.04% after trading in a range of 70846.04 and 71228.75. There were 19 stocks advancing against 10 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.46%, while Small cap index was up by 1.05%.

The top gaining sectoral indices on the BSE were Energy up by 1.17%, Oil & Gas up by 1.07%, Basic Materials up by 0.99%, Metal up by 0.94% and Healthcare up by 0.81%, while Capital Goods down by 1.76%, Industrials down by 0.86%, Bankex down by 0.35%, Consumer Durables down by 0.35%, Telecom down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.22%, Reliance Industries up by 1.54%, Tata Steel up by 1.15%, Ultratech Cement up by 1.14% and JSW Steel up by 1.12%. On the flip side, Larsen & Toubro down by 4.70%, Titan down by 1.01%, Kotak Mahindra Bank down by 0.98%, ICICI Bank down by 0.81% and SBI down by 0.32% were the top losers.

Meanwhile, raising India’s economic growth projection for 2024 and 2025 by 20 basis points (bps) to 6.5%, the International Monetary Fund (IMF) in its latest World Economic Outlook update has said that the country will emerge as the fastest-growing economy yet again. It said growth in India is projected to remain strong reflecting resilience in domestic demand. On the other hand, it said other major economies will be showing modest growth. As per the report, the US will grow at 2.1 per cent, Germany will grow at 0.5 per cent, France at 1 per cent, Japan at 0.9 per cent and China at 4.6 per cent.

The IMF said that with disinflation and steady growth, the risks to global growth are broadly balanced and there is a possibility of a 'soft landing'. It noted ‘Global growth is projected at 3.1 per cent in 2024 and 3.2 per cent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China’.

It said that faster disinflation could lead to further easing of financial conditions and stronger structural reform momentum could bolster productivity with positive cross-border spillovers However, it also highlighted that a spike in new commodity price spikes from geopolitical shocks -- including continued attacks in the Red Sea -- and deepening property sector woes in China could also cause growth disappointments.

The CNX Nifty is currently trading at 21576.35, up by 54.25 points or 0.25% after trading in a range of 21448.85 and 21583.80. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.42%, ONGC up by 1.97%, Adani Ports & SEZ up by 1.65%, Dr. Reddy's Lab up by 1.63% and Reliance Industries up by 1.43%. On the flip side, Larsen & Toubro down by 5.10%, Kotak Mahindra Bank down by 0.98%, Titan down by 0.88%, Hero MotoCorp down by 0.62% and SBI Life Insurance down by 0.40% were the top losers.

Asian markets are trading mostly in red; Hang Seng slipped 163.09 points or 1.04% to 15,540.36, Taiwan Weighted lost 128.08 points or 0.71% to 17,906.55, Nikkei 225 declined 71.49 points or 0.2% to 35,994.37, Shanghai Composite weakened 10.62 points or 0.38% to 2,819.91, KOSPI fell 7.11 points or 0.28% to 2,491.70 and Straits Times was down by 1.23 points or 0.04% to 3,148.81, while Jakarta Composite was up by 20.12 points or 0.28% to 7,212.34.