Sensex, Nifty trade firm with notable gains in early deals

Indian equity benchmarks made cautious start ahead of Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be out later in the day for more directional cues, and amid mixed global cues. Soon, Sensex and Nifty gained traction and are trading firm with notable gains of around half a percent each in early deals amid foreign fund inflows. Foreign institutional investors (FIIs) net bought shares worth Rs 4,212.76 crore on March 11, provisional data from the NSE showed. Sentiments got a boost as a report by India Ratings and Research said India will join the coveted club of upper-middle income countries by FY36. The ratings agency’s report estimated that by FY47, it will become a $15 trillion economy. 

On the global front, Asian markets are trading mostly higher, following the mixed cues from global markets overnight, amid optimism about the outlook for interest rates as traders looked ahead to a slew of crucial economic data, including reports on consumer and producer price inflation, for more clarity about the US central bank's interest rate moves. Indonesia market remained closed in observance of the Hindi Saka New Year.

Back home, the pharma stocks are in focus as the Department of Pharmaceutical announced the revamped Pharmaceuticals Technical Upgradation Assistance (PTUAS) scheme, aiming to provide financial assistance to drug manufacturers for upgrading their technological capabilities and conforming with global standards. In stock specific development, AB Capital gained as board approves merger with arm.

The BSE Sensex is currently trading at 73935.61, up by 432.97 points or 0.59% after trading in a range of 73461.89 and 73942.19. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.22%, while Small cap index was down by 0.93%.

The top gaining sectoral indices on the BSE were Bankex up by 0.93%, TECK up by 0.69%, IT up by 0.69%, Oil & Gas up by 0.44% and Energy up by 0.39%, while Realty down by 1.49%, FMCG down by 1.20%, Utilities down by 0.74%, Power down by 0.70% and Metal down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.71%, HDFC Bank up by 1.54%, Axis Bank up by 1.23%, Reliance Industries up by 1.22% and ICICI Bank up by 1.22%. On the flip side, ITC down by 2.33%, Nestle down by 1.15%, JSW Steel down by 1.00%, Ultratech Cement down by 0.85% and Hindustan Unilever down by 0.83% were the top losers.

Meanwhile, India will have the option of temporarily withdrawing customs duty concessions on European Free Trade Association (EFTA) country goods under the trade agreement between the two sides, if the four European nation bloc would not fulfil its $100 billion investment obligations. According to the documents accompanying the agreement, though the investments have to flow in 15 years -- $50 billion in the first 10 years (counted after implementation of the pact) and another $5 billion in next five years, the trade deal also provides for a three-year grace period to the EFTA bloc to meet the obligations. India and four-nation EFTA bloc signed Trade and Economic Partnership Agreement (TEPA) on March 10 under which New Delhi received a foreign direct investment commitment of $100 billion in 15 years from the member countries of the grouping. The EFTA members are Iceland, Liechtenstein, Norway, and Switzerland. There is a three-stage government-to-government consultation process prescribed in the document for resolution of differences raised in relation to the obligations.

According to the agreement documents, ‘If, after the consultation period, India is still of the opinion that the EFTA states have not fulfilled their obligations, India may, after a further grace period of three years, suspend concessions. The suspension of concessions needs to be proportionate and temporary’. It would take around a year for the agreement to come into force. The investment promotion and cooperation chapter of the agreement talks about a regular review by a specially appointed sub-committee, and it provides for a three-stage consultation procedure which can be invoked by India if the defined target has not been reached after 15 years.

An investment sub-committee would review progress towards the achievement of the shared objectives. The first review by the committee will be held no later than 5 years after entry into force of this agreement. Similarly, the second review would take place after 10 years. The final review shall take place 15 years after entry into force of this agreement. However, the document stated that in case of occurrence of any unforeseen circumstances like global pandemic, war, geopolitical disruptions, financial crisis or sustained economic underperformance, which have had a material bearing on the progress to achieve the shared objectives, the two sides will adjust the shared objectives accordingly.

To facilitate investments India will have to ensure a favourable investment climate while taking into account the need to identify, assess and mitigate potential risks for security or public order. As per the documents, all the duty cuts would be carried out over a period of 10 years with different timelines for each category of goods by India for EFTA member countries. The joint committee will be the apex body to supervise and administer the TEPA and to oversee its further development. India has received about $10 billion in foreign direct investments (FDI) from Switzerland between April 2000 and December 2023. It is the 12th largest investor in India. The FDI inflow was $721.52 million from Norway, $29.26 million from Iceland and $105.22 million from Liechtenstein during the period.

The CNX Nifty is currently trading at 22428.55, up by 95.90 points or 0.43% after trading in a range of 22315.00 and 22434.10. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.65%, HDFC Bank up by 1.50%, Axis Bank up by 1.21%, Reliance Industries up by 1.14% and ICICI Bank up by 1.13%. On the flip side, ITC down by 2.34%, Cipla down by 1.44%, Nestle down by 1.05%, JSW Steel down by 1.04% and Hindustan Unilever down by 0.96% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 282.74 points or 1.68% to 16,870.31, Taiwan Weighted surged 161.34 points or 0.81% to 19,887.42, KOSPI rose 13.12 points or 0.49% to 2,672.96 and Straits Times added 10.1 points or 0.32% to 3,148.52. On the other hand, Nikkei 225 slipped 179.03 points or 0.46% to 38,641.46 and Shanghai Composite weakened 14.34 points or 0.47% to 3,054.12.