Markets trade with traction after flat opening

Indian equity benchmarks made flat-to-positive start on Tuesday amid weakness in global peers and spike in the US 10-year yields. Investors are eyeing the three-day monetary policy meeting of the Reserve Bank of India to start today. Soon, markets gained traction and are trading higher with decent gains in early deals led by bargain hunting in IT and TECK counters. Foreign fund inflows aided sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 518.88 crore on February 5, provisional data from the NSE showed. Traders took encouragement as the Organization for Economic Co-operation and Development (OECD) raised India’s growth outlook for 2024-25 (FY25) to 6.2 per cent from the 6.1 per cent estimated earlier in its November outlook. 

On the global front, Asian markets are trading mixed, following the broadly negative cues from global markets overnight, amid fading prospects of an early interest rate cut in March by the US Fed following recent upbeat U.S. economic data and hawkish comments from Fed Chair Jerome Powell. Traders are cautious ahead of the Reserve Bank of Australia's monetary policy decision later in the day, where it is expected to hold interest rates steady. Meanwhile, Taiwan is closed for Lunar New Year holidays until February 15.

Back home, banking stocks are in focus as S&P Global Ratings said strong credit growth of Indian banks could moderate to 12-14 per cent in the next fiscal if deposit growth remains tepid. It added rising cost of funds and potential rate cuts in fiscal 2025 will squeeze net interest margins. In stock specific development, India Energy Exchange traded higher on highest-ever volume in Jan 2024. The company has achieved the highest ever total volumes in January 2024, reaching 10,893 million units (MU) - marking a 26.1 per cent year-over-year increase. 

The BSE Sensex is currently trading at 72047.38, up by 315.96 points or 0.44% after trading in a range of 71625.18 and 72072.92. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.72%, while Small cap index was up by 1.19%.

The top gaining sectoral indices on the BSE were IT up by 2.52%, TECK up by 2.47%, Telecom up by 1.74%, Auto up by 1.08% and Healthcare up by 0.91%, while Power down by 0.64%, Utilities down by 0.46%, Metal down by 0.31%, Bankex down by 0.21% and PSU down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.86%, Bharti Airtel up by 2.92%, Wipro up by 2.89%, HCL Technologies up by 2.82% and Maruti Suzuki up by 2.04%. On the flip side, Power Grid down by 3.02%, NTPC down by 1.06%, Indusind Bank down by 0.66%, Kotak Mahindra Bank down by 0.50% and Reliance Industries down by 0.48% were the top losers.

Meanwhile, the Organisation for Economic Co-operation and Development (OECD), in its latest interim economic outlook, has raised India's growth outlook for 2024 to 6.2 per cent. OECD, which represents the developed countries, in its earlier outlook in November last year had projected India’s growth at 6.1 per cent. It noted ‘The emerging-market economies have generally continued to grow at a solid pace, despite tighter financial conditions, reflecting the benefits of improved macroeconomic policy frameworks, strong investment in infrastructure in many countries, including India, and steady employment gains’.

For 2025, OECD has kept its growth forecast for India unchanged at 6.5 per cent. The outlook observes that high-frequency activity indicators generally suggest a continuation of recent moderate growth. The report stated the global economy is on course to perform better this year than expected only a few months ago as an improved outlook in the United States offsets euro zone weakness. 

According to it, world economic growth is expected to ease from 3.1 per cent in 2023 to 2.9 per cent this year, better than the 2.7 per cent projected in the November outlook. It said ‘Across countries, there continues to be clear signs of strong near-term momentum in India, relative weakness in Europe, and mild near-term growth in most other major economies’. The better outlook for the global economy is a welcome sign as it also has the potential of creating a higher demand for Indian exports.

The CNX Nifty is currently trading at 21854.75, up by 83.05 points or 0.38% after trading in a range of 21737.55 and 21870.05. There were 31 stocks advancing against 18 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were TCS up by 3.72%, Bharti Airtel up by 3.52%, Wipro up by 2.89%, HCL Technologies up by 2.85% and HDFC Life Insurance up by 2.48%. On the flip side, Power Grid down by 3.00%, Hindalco down by 1.20%, NTPC down by 1.09%, Britannia Industries down by 0.87% and Reliance Industries down by 0.73% were the top losers.

Asian markets are trading mixed; Hang Seng surged 382.84 points or 2.41% to 15,892.85, Jakarta Composite rose 31.3 points or 0.43% to 7,229.92 and Shanghai Composite was up by 22.07 points or 0.81% to 2,724.26. On the other hand, Nikkei 225 slipped 188.14 points or 0.52% to 36,166.02, KOSPI fell 11.23 points or 0.44% to 2,580.08 and Straits Times was down by 4.72 points or 0.15% to 3,129.57.