Domestic indices trim opening gains to trade flat in early deals

Indian equity benchmarks made positive start on Wednesday on account of bargain hunting after yesterday’s sell-off and following overnight gains on Wall Street. Tumbling oil prices and easing bond yields on hopes for interest-rate cuts by the Federal Reserve later this year also added to the optimism among investors. Soon, domestic indices turned volatile and are trading flat with positive bias in early deals amid concerns with a private report stating that a smaller majority will see Prime Minister Modi face more difficulty in doling out reforms and infrastructure spending. Investors are eyeing the Services PMI data to out later in the day for more directional cues. 

On the global front, Asian markets are trading mixed, following the broadly positive cues from Wall Street overnight, amid easing of global yields and on optimism that data showing weakness in the US labor market will encourage the US Fed to lower interest rates in the coming months. Traders appeared a bit reluctant to make significant moves, with the Bank of Canada and the European Central Bank scheduled to make their monetary policy announcements on Wednesday and Thursday, respectively, and the crucial U.S.jobs data due on Friday.

Back home, the Central Board of Indirect Taxes and Custom (CBIC) has come out with a draft Central Excise Bill, 2024, which seeks to replace the eight-decade old Central Excise Act, 1944. The move could pave the way for petroleum products to come under the ambit of Goods and Services Tax (GST). In stock specific development, Hindalco traded under pressure on postponing IPO plans of its arm Novelis.

The BSE Sensex is currently trading at 72110.57, up by 31.52 points or 0.04% after trading in a range of 71893.21 and 73027.88. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.54%, while Small cap index was down by 1.50%.

The top gaining sectoral indices on the BSE were FMCG up by 3.74%, Auto up by 0.87%, Healthcare up by 0.80%, IT up by 0.54% and TECK up by 0.39%, while Capital Goods down by 4.47%, Power down by 4.02%, PSU down by 3.80%, Realty down by 3.72% and Industrials down by 3.60% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 6.24%, Asian Paints up by 4.08%, Nestle up by 3.69%, HCL Technologies up by 2.46% and Kotak Mahindra Bank up by 2.43%. On the flip side, Larsen & Toubro down by 5.08%, Power Grid down by 4.38%, NTPC down by 3.89%, SBI down by 2.24% and ICICI Bank down by 0.90% were the top losers.

Meanwhile, in order to compete with China on the economic front, External Affairs Minister S Jaishankar has said India should focus on manufacturing, a key sector which was ignored by governments before Prime Minister Narendra Modi came to power in 2014. Noting that tension at the border with China has caused ‘abnormality’ in New Delhi-Beijing relations, he said India's thinking is absolutely clear that unless there is peace and stability in the border areas, the ties between the two Asian powers will not improve. There is no other way to counter China on the economic front, insisted the career diplomat-turned-politician while replying to questions from audience members on how he saw India's relationship with the world's second largest economy as it moves towards becoming a $5 trillion economy.

Jaishankar said ‘If we talk of rising Bharat, it will rise through technology. You cannot build strong technology on weak manufacturing. At any cost, we should put special emphasis on manufacturing, because that is the only economic response’. He emphasised that tension at the border has affected Sino-Indian ties. He said ‘As you know, there is tension at the border (with China). And this has caused abnormality in our relations. For that our thinking is very clear that unless there is peace and stability at the border, the relations will remain in the same deteriorated condition’.

About the future of the World Trade Organisation amid China dumping goods in India through dubious methods and advanced countries using the WTO to their own convenience, the Minister said while it has its own set of challenges, New Delhi should never leave the global forum. He noted ‘It (WTO) is a formal and accepted forum for talks. Here we would put forward our point, work with allies to save our interest. We recently held a meeting on fishing. We should also explore arrangements at bilateral and group levels’.

He also emphasised that reforms carried out by the government and policies framed to counter Covid-19 have helped India emerge from the pandemic and strengthen its economic position to such an extent that today ‘we are the fastest growing large economy’. He added ‘This is one reason why global perception about India has changed’. He said given India's leadership role, vision, stability, confidence and foreign investment figures, the world wants to collaborate with ‘us in our journey’.

The CNX Nifty is currently trading at 21898.05, up by 13.55 points or 0.06% after trading in a range of 21791.95 and 22131.60. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 6.35%, Britannia Industries up by 5.41%, Tata Consumer Products up by 4.69%, Hero MotoCorp up by 4.55% and Asian Paints up by 4.20%. On the flip side, Larsen & Toubro down by 5.07%, Power Grid down by 4.54%, BPCL down by 4.36%, NTPC down by 3.82% and Adani Enterprises down by 3.43% were the top losers.

Asian markets are trading mixed; Taiwan Weighted surged 112.53 points or 0.53% to 21,469.15, Hang Seng advanced 61.45 points or 0.33% to 18,505.56, KOSPI rose 29.89 points or 1.12% to 2,691.99 and Straits Times added 8.22 points or 0.25% to 3,347.16. On the other hand, Nikkei 225 slipped 412.29 points or 1.06% to 38,425.17, Jakarta Composite fell 80.34 points or 1.13% to 7,018.97 and Shanghai Composite was down by 11.28 points or 0.37% to 3,079.92.