Sensex, Nifty wipe out opening losses to trade flat in early deals

Indian equity benchmarks made slightly negative start on Tuesday tracking weakness on Wall Street overnight as hopes of an early rate cut suffered fresh jolt after data showed that the US manufacturing sector grew for the first time since September 2022. Soon, markets turned volatile and swinging between gains and losses. At this point of trade, Sensex and Nifty are trading flat with negative bias amid foreign fund outflows. Provisional data from the NSE showed that foreign institutional investors (FIIs) net sold shares worth Rs 522.30 crore on April 1. Investors also remained on sidelines ahead of the manufacturing PMI data to be out later in the day for more directional cues. However, downside remained capped with report that the Centre collected Rs 1.78 lakh crore as gross goods and services tax in the month of March, up 11.5% against the same month last year. This is the second highest monthly gross GST collection. This surge was driven by a significant rise in GST collections from domestic transactions at 17.6%. 

On the global front, most of the Asian markets are trading higher as investors cheered data showing China's manufacturing grew more than forecast last month. On the sectoral front, defence industry stocks are buzzing with report that steadily rising exports of defence and aerospace equipment touched a record Rs 21,083 crore (about $2.63 billion) in the financial year 2023-24 (FY24), a growth of 32.5 per cent over last year’s figure of Rs 15,920 crore. In stock specific development, Aditya Birla Fashion and Retail (ABFRL) traded higher on demerger plan.

The BSE Sensex is currently trading at 73985.86, down by 28.69 points or 0.04% after trading in a range of 73792.53 and 74099.78. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.96%, Oil & Gas up by 1.02%, Utilities up by 0.96%, Realty up by 0.92% and Industrials up by 0.84%, while Telecom down by 0.52%, TECK down by 0.46%, IT down by 0.40% and Healthcare down by 0.17% were the few losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.62%, Indusind Bank up by 1.33%, Titan Company up by 0.91%, Tata Motors up by 0.60% and Nestle up by 0.49%. On the flip side, ICICI Bank down by 1.66%, Bajaj Finance down by 0.90%, TCS down by 0.89%, Wipro down by 0.88% and Bajaj Finserv down by 0.78% were the top losers.

Meanwhile, despite challenges like rise in borrowing cost, sluggish exports and certain global events, rating agency ICRA has said domestic consumption demand, government's infrastructure spending and healthy balance sheets lent support to India Inc's credit profile in the 2023-24 fiscal. In the just-concluded fiscal year, ICRA upgraded two entities for every entity downgraded, in continuation of the upgrade momentum that had been set in motion in FY22. Aviation, hospitality, auto and auto components, and banks were the few sectors in 2023-24 where the rating upgrades were induced mostly by industry tailwinds.

The domestic rating agency said India Inc bore direct and the indirect effects of multiple challenges in FY24, including inflation, rise in borrowing costs, sub-par monsoon, supply-effects of the continued war between Russia and Ukraine, start of another conflict between Israel and Palestine, the Red Sea crisis, and sluggish exports. Yet, these did not feel heavier as domestic consumption demand across several sectors, government spending on public infrastructure, and healthy balance sheets lent support to the credit profiles of entities. It maintained a positive outlook for the hospitality sector for 2024-25. Sectors where industry headwinds played spoilsport in FY24 and may continue to do so in the near term include chemicals, cut and polished diamonds, and bulk tea. It said overall, as credit profiles continued to improve last year, the number of instances of defaults dipped to five in FY24, compared with 22 in FY23 and 42 in FY22. 

The agency expects India's GDP to expand 6.5 per cent in the current fiscal year, lower than 7.6 per cent in the last year. The asset quality of banks and non-banking financial companies (NBFCs) has also been at its decadal best with the profitability and the capitalisation indicators expected to remain healthy in the near term. It noted the series of proactive actions taken by the regulators (RBI and Sebi) in the recent years would work to further strengthen the financial system and the capital markets. The key downside factors that could throw a spanner in the works to this radiant prognosis would be how the monsoon pan out this year and how the complicated geopolitical landscape evolves.

The CNX Nifty is currently trading at 22461.55, down by 0.45 points or after trading in a range of 22414.35 and 22497.60. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.55%, Adani Ports & SEZ up by 2.11%, Bajaj Auto up by 1.97%, HDFC Bank up by 1.59% and Indusind Bank up by 1.26%. On the flip side, ICICI Bank down by 1.70%, TCS down by 0.92%, Bajaj Finance down by 0.90%, Wipro down by 0.82% and JSW Steel down by 0.75% were the top losers.

Asian markets are trading mostly in green; Hang Seng surged 393.42 points or 2.38% to 16,934.84, Taiwan Weighted jumped 206.63 points or 1.02% to 20,428.96, Straits Times rose 13.34 points or 0.41% to 3,248.23, KOSPI strengthened 7.66 points or 0.28% to 2,755.52 and Shanghai Composite added 0.95 points or 0.03% to 3,078.33. On the other hand, Jakarta Composite fell 43.01 points or 0.6% to 7,162.05 and Nikkei 225 was down by 24.13 points or 0.06% to 39,778.96.