Sensex, Nifty trade flat with positive bias in early deals

Indian equity benchmarks made cautious start on Thursday despite broadly positive cues from global peers. Domestic indices soon turned volatile and slipped sharply below neutral lines, but managed to recover losses. At this point of trade, Sensex and Nifty are trading flat with positive bias on the back of healthy buying in IT and metal counters. Sentiments got a boost as the country's G20 Sherpa Amitabh Kant said India will be the third largest economy by 2027 and it needs to grow at rapid rates to become a $35 trillion economy by 2047. However, upside remained capped amid concerns as a research report by CRISIL Market Intelligence and Analytics showed that financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates. The report released during the month also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions. 

Most of the Asian markets are trading higher, following broadly positive cues from Wall Street overnight, boosted by strong gains in the technology sector after US chipmaker Nvidia's upbeat outlook on robust demand for AI related chips. Traders shrugged off the US Fed's latest monetary minutes, where officials remain wary of cutting interest rates too quickly. Meanwhile, the manufacturing sector in Japan continued to contract, and at a faster pace, the latest survey from Jibun Bank revealed on Thursday with a manufacturing PMI score of 47.2.

Back home, sugar stocks are in focus as the Cabinet Committee on Economic Affairs approved a hike in the Fair and Remunerative Price (FRP) of sugarcane to Rs 340 per quintal from Rs 315 per quintal for the 2024-25 (October-September) season. The Rs 25-per-quintal increase in the FRP of sugarcane is significantly higher than what was announced last year, when the government had raised it by Rs 10 per quintal to Rs 315. 

The BSE Sensex is currently trading at 72646.87, up by 23.78 points or 0.03% after trading in a range of 72346.87 and 72724.53. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.03%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were IT up by 0.83%, Metal up by 0.68%, TECK up by 0.50%, Realty up by 0.42% and Capital Goods up by 0.42%, while Oil & Gas down by 0.72%, Utilities down by 0.57%, PSU down by 0.52%, Telecom down by 0.49% and Energy down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.01%, HCL Technologies up by 1.70%, Tech Mahindra up by 1.43%, Wipro up by 1.39% and TCS up by 1.31%. On the flip side, Bharti Airtel down by 1.65%, Asian Paints down by 1.45%, Power Grid down by 1.21%, Ultratech Cement down by 0.91% and HDFC Bank down by 0.84% were the top losers.

Meanwhile, rating agency ICRA in its latest report has projected India’s Gross Domestic Product (GDP) growth to moderate sequentially to 6 per cent in the third quarter (Q3) of FY24 from 7.6 per cent in the preceding three months mainly due to subdued performance of agriculture and industrial sectors. Further, it said the GVA (Gross Value Added) growth is estimated to ease to 6 per cent in the October-December quarter FY24 from 7.4 per cent in the second quarter of the last fiscal.

The anticipated deterioration in the industrial sector growth in the third quarter is partly attributable to an adverse base effect and a deceleration in volume expansion, even as the continued deflation in commodity prices kept the profitability of some sectors favourable. Additionally, a mild 0.2 per cent contraction in the total spending of the government of India and the 25 state governments (all states except Arunachal Pradesh, Goa, and Manipur) in the October-December period is expected to have dulled the GVA growth in the quarter. Aditi Nayar, Chief Economist, ICRA said ‘Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in government expenditure, and an uneven monsoon are expected to dampen the GDP growth to 6 per cent in Q3 FY24 from 7.6 per cent in Q2 FY24’.

In contrast to industry and agriculture, ICRA estimates the services sectors' GVA growth year-on-year to rise to 6.5 per cent in the third quarter of the current fiscal from 5.8 per cent in the July-September period of 2023-24, led by trade, hotels, transport, communication, and services related to broadcasting. It also said that the Centre's non-interest revenue expenditure contracted by a significant 19.1 per cent in the third quarter of the current fiscal, after having expanded by 23.2 per cent in the preceding three months, which would dampen the performance of public administration, defence, and other services.

The CNX Nifty is currently trading at 22055.55, up by 0.50 points after trading in a range of 21964.55 and 22094.30. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.02%, Eicher Motors up by 1.90%, HCL Technologies up by 1.69%, Hindalco up by 1.36% and Tech Mahindra up by 1.30%. On the flip side, BPCL down by 1.71%, Bharti Airtel down by 1.66%, Asian Paints down by 1.39%, Power Grid down by 1.11% and Dr. Reddy's Lab down by 0.98% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 711.88 points or 1.86% to 38,974.04, Taiwan Weighted jumped 151.78 points or 0.81% to 18,828.09, Hang Seng rose 24.16 points or 0.15% to 16,527.26, Shanghai Composite strengthened 14.52 points or 0.49% to 2,965.48, KOSPI added 6.85 points or 0.26% to 2,660.16 and Jakarta Composite was up by 5.61 points or 0.08% to 7,354.63, while Straits Times was down by 17.45 points or 0.54% to 3,199.66.