Sensex, Nifty trade flat with positive bias in early deals

Indian equity benchmarks made slightly positive start on Tuesday tracking overnight gains on Wall Street. Soon, markets turned volatile and are hovering around neutral lines. Sensex and Nifty are trading flat with positive bias in early deals on account of value buying. Foreign fund inflows aided sentiments. Foreign institutional investors (FIIs) extended their buying on the second day on June 10 as they bought Indian equities worth Rs 2,572.38 crore. Investors avoided taking any long position ahead of domestic IIP and inflation numbers due to be announced on Wednesday.

Traders took encouragement as in his first decision after taking charge for the third time, Prime Minister Narendra Modi signed a file transferring the 17th instalment of the PM-Kisan Samman Nidhi (PM-KISAN) fund, amounting to nearly Rs 20,000 crore, to around 9.3 crore farmers. However, upside remained capped amid cautiousness with a private report that India consumer inflation likely snapped a four-month downward trend in May due to rapidly rising food costs, suggesting the Reserve Bank of India is still several months away from cutting interest rates. 

On the global front, most of the Asian markets are trading lower as traders seemed reluctant to make significant moves ahead of several key events later this week, including the US Fed's monetary policy meeting and release of U.S. consumer price inflation data. The Fed is widely expected to leave interest rates unchanged, but traders are likely to pay closer attention to Fed officials' latest projections for the economy and rates.

Back home, insurance industry stocks are in focus as Life Insurance Council’s data showed that the life insurance industry’s new business premium (NBP) increased by 15.5 per cent year-on-year (Y-o-Y) in May 2024, aided by growth across segments. The industry earned premiums worth Rs 27,034.2 crore in May 2024 compared to Rs 23,477.8 crore in the year-ago period. In stock specific development, Rail Vikas Nigam jumped after winning two new orders.

The BSE Sensex is currently trading at 76522.87, up by 32.79 points or 0.04% after trading in a range of 76296.44 and 76680.90. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.50%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Realty up by 1.49%, Capital Goods up by 1.24%, Industrials up by 1.07%, PSU up by 0.84% and Oil & Gas up by 0.67%, while TECK down by 0.02% and Telecom down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.68%, Larsen & Toubro up by 1.43%, Tech Mahindra up by 0.87%, Tata Steel up by 0.64% and Ultratech Cement up by 0.61%. On the flip side, Bharti Airtel down by 0.83%, JSW Steel down by 0.83%, Kotak Mahindra Bank down by 0.82%, Asian Paints down by 0.81% and Reliance Industries down by 0.67% were the top losers.

Meanwhile, in a move to support state finances and spur economic development, the Centre has authorised the release of tax devolution of Rs 1.39 lakh crore to states for June. This decision aims to provide states with the financial resources needed to accelerate their development projects and capital spending.

The Finance Ministry said it was decided that apart from the regular release of the devolution amount for the month of June 2024, one additional instalment will be released. This will enable State Governments to accelerate development and capital spending. Currently, 41 per cent of taxes collected by the Centre is devolved in 14 instalments among states during a fiscal year.

The additional installment of funds is part of a broader fiscal strategy outlined in the Interim Budget for 202425, which has allocated Rs 12,19,783 crore towards the devolution of taxes to states. With the additional funds being released this month, the cumulative amount devolved to states for the fiscal year 202425 has reached Rs. 2,79,500 crore as of June 10.

The CNX Nifty is currently trading at 23263.90, up by 4.70 points or 0.02% after trading in a range of 23206.65 and 23289.80. There were 30 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were ONGC up by 3.51%, Mahindra & Mahindra up by 1.67%, Britannia Industries up by 1.61%, Larsen & Toubro up by 1.40% and Tech Mahindra up by 0.79%. On the flip side, Dr. Reddy's Lab down by 1.18%, BPCL down by 1.06%, Shriram Finance down by 1.06%, JSW Steel down by 0.92% and Bharti Airtel down by 0.88% were the top losers.

Asian markets are trading mixed; Hang Seng declined 306.99 points or 1.67% to 18,059.96, Shanghai Composite weakened 33.55 points or 1.11% to 3,017.73, Jakarta Composite fell 9.56 points or 0.14% to 6,911.99 and Straits Times was down by 7.49 points or 0.23% to 3,314.59. On the other hand, Nikkei 225 surged 163.97 points or 0.42% to 39,202.13, KOSPI increased 10.37 points or 0.38% to 2,711.54 and Taiwan Weighted added 2.6 points or 0.01% to 21,860.98.