Sensex, Nifty manage to wipe out opening losses; trade tad higher

Indian equity benchmarks extended their previous session’s losses and made negative start on Tuesday following the broadly negative cues from Wall Street overnight as well as weakness in Asian counterparts, as traders largely stayed cautious and seem reluctant to make significant moves ahead of some key economic data, including a report on US consumer price inflation said to be preferred by the US Fed. The inflation data could have a notable impact on the outlook for interest rates, as Fed officials have said they need greater confidence inflation is slowing before cutting rates.

Soon, domestic indices managed to wipe out losses and lingering around neutral lines. At this point of trade, Sensex and Nifty are trading tad higher on the back of healthy buying in Realty and Industrials counters. Some support came in with a private report stating that India’s real GDP growth for the December quarter is all set to come at a higher-than-anticipated 7 per cent. The official data on quarterly growth will be released on February 29. Broader indices -- BSE Mid & Small Cap – are outperforming larger peers with decent gains.

However, upside remained limited amid foreign fund outflows. Provisional data from the NSE showed that foreign institutional investors (FIIs) net sold shares worth Rs 285.15 crore on February 26. On the sectoral front, textile industry stocks are in focus after Prime Minister Narendra Modi promised all support to the textiles sector, stressing that it will play a crucial role in making India a developed nation by 2047, when India will complete hundred years of independence. In stock specific development, Power Mech Projects traded higher after it received an order worth Rs 396 crore for a railway project in Chhattisgarh.

The BSE Sensex is currently trading at 72825.65, up by 35.52 points or 0.05% after trading in a range of 72660.13 and 72864.49. There were 17 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.51%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Realty up by 0.92%, Industrials up by 0.74%, Consumer Durables up by 0.71%, Telecom up by 0.66% and Capital Goods up by 0.65%, while Bankex down by 0.11% and Oil & Gas down by 0.05% were the only losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.65%, Power Grid up by 1.06%, Larsen & Toubro up by 0.71%, Maruti Suzuki up by 0.68% and Titan Company up by 0.65%. On the flip side, Bajaj Finance down by 0.61%, Axis Bank down by 0.53%, Hindustan Unilever down by 0.41%, HDFC Bank down by 0.37% and Reliance Industries down by 0.36% were the top losers.

Meanwhile, India has expressed ‘serious’ concerns in the World Trade Organization (WTO) meeting in Abu Dhabi over increase in the use of trade protectionist measures by certain countries in the name of environment protection. The remarks assume significance as the country has earlier flagged issues over the European Union’s (EU) decision to impose carbon tax (a kind of import tax) on sectors such as steel and fertiliser; and adoption of deforestation regulation by the 27-nation bloc.

Regarding sustainable development and policy space for industrialisation, Commerce Secretary Sunil Barthwal said developing countries require flexibility in the existing WTO agreements to overcome the constraints faced by them in their industrialisation. He also expressed concerns on the concerted attempt by the developed countries to club long-standing development issues like policy space for industrial development with new issues of ‘Trade and Industrial policy’.

The CBAM (Carbon Border Adjustment Mechanism), or carbon tax, will come into effect from January 1, 2026 for seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products. The CBAM will translate into a 20-35 per cent tax on select imports into the EU starting January 1, 2026. India’s 26.6 per cent of exports of iron ore pellets, iron, steel, and aluminium products go to the EU. These products will be hit by CBAM. India exported these goods worth $7.4 billion in 2023 to the EU. India’s exports of products like coffee, leather hides, and paperboard worth $1.3 billion annually to the European Union are likely to be impacted due to the deforestation regulation adopted by the EU in May 2023.

The CNX Nifty is currently trading at 22143.10, up by 21.05 points or 0.10% after trading in a range of 22085.65 and 22145.25. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.60%, Power Grid up by 1.08%, Eicher Motors up by 0.90%, Cipla up by 0.86% and Larsen & Toubro up by 0.74%. On the flip side, UPL down by 1.37%, Bajaj Finance down by 0.67%, ONGC down by 0.59%, Axis Bank down by 0.51% and Hero MotoCorp down by 0.50% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted slipped 95.72 points or 0.51% to 18,852.33, Hang Seng declined 81.08 points or 0.49% to 16,553.66, Straits Times fell 32.87 points or 1.05% to 3,138.25, KOSPI dropped 9.33 points or 0.35% to 2,637.75, Jakarta Composite lost 8.12 points or 0.11% to 7,275.70 and Nikkei 225 was down by 6.72 points or 0.02% to 39,226.99, while Shanghai Composite was up by 15.28 points or 0.51% to 2,992.30.