Sensex, Nifty trade lower in early deals

Indian equity benchmarks made cautious start on Monday tracking weakness in Asian counterparts. Sensex and Nifty are trading lower in early deals amid cautiousness ahead of corporate earnings reactions with TCS kick-in the Q1 result season on Thursday. Traders were concerned as the Reserve Bank of India (RBI) said India's forex reserves dropped $1.713 billion to $651.997 billion for the week ended June 28. Some cautiousness came with a private report that India will struggle to create enough jobs for its growing workforce over the next decade even if the economy grows at a rapid pace of 7 per cent, and it suggested the world’s most-populous nation will need more concerted steps to boost employment and skills. However, downside remained capped with report that foreign investors infused over Rs 7,900 crore in Indian equities in the first week of the month amid a healthy economic and earnings growth momentum. With this, total FPI investment in equities reached Rs 1.16 trillion so far this year, data with the depositories showed. 

On the global front, Asian markets are trading mixed despite the broadly positive cues from Wall Street on Friday, as traders cautiously await key US inflation data that includes reports on consumer and producer prices in June later in the week. The data will provide more clues on the direction the US Fed will take on interest rates. Back home, auto industry stocks are in focus as the Federation of Automobile Dealers Associations (FADA) said automobile retail sales in India grew 0.73 per cent year-on-year (Y-o-Y) in June as heatwaves deterred customers from purchases despite substantial discounts. In stock specific development, Titan Company dipped after it reported a disappointing growth in jewelry business for the April-June quarter of the financial year 2024-25 (Q1FY25).

The BSE Sensex is currently trading at 79835.84, down by 160.76 points or 0.20% after trading in a range of 79767.97 and 80022.38. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.16%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were FMCG up by 1.08%, Capital Goods up by 0.69%, PSU up by 0.62%, Industrials up by 0.53% and Telecom up by 0.24%, while Consumer Durables down by 1.42%, Realty down by 0.32%, Bankex down by 0.30%, Utilities down by 0.26% and Metal down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.46%, Hindustan Unilever up by 1.07%, ITC up by 0.78%, Nestle up by 0.64% and Tech Mahindra up by 0.42%. On the flip side, Titan Company down by 4.07%, Asian Paints down by 1.32%, Adani Ports & SEZ down by 1.03%, Bajaj Finance down by 0.82% and JSW Steel down by 0.77% were the top losers.

Meanwhile, with an aim to resolve the pending issues and close the negotiations, India and the UK will hold the next round of talks this month for the proposed free trade agreement (FTA) amid the new government taking charge in Britain. The India-UK talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles. Britain's newly-elected Prime Minister Keir Starmer spoke to Prime Minister Narendra Modi and said he stood ready to conclude an FTA that worked for both sides. The two leaders agreed to work towards the early conclusion of a mutually beneficial India-UK FTA. There are pending issues in both the goods and services sectors.

The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty. On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates and certain confectionary items. Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance). The two countries are also negotiating a bilateral investment treaty (BIT).

There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights. The bilateral trade between India and the UK increased to $21.34 billion in 2023-24 from $20.36 billion in 2022-23. The Labour Party's election manifesto for the recent polls also committed to clinching the deal. The new Starmer-led government's new Foreign Secretary David Lammy is also on the record saying that he wants to finish the job on the FTA and plans to visit India within the first month of being elected.

The CNX Nifty is currently trading at 24276.55, down by 47.30 points or 0.19% after trading in a range of 24262.55 and 24338.85. There were 20 stocks advancing against 29 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tata Motors up by 1.51%, Tata Consumer Products up by 1.45%, Hindustan Unilever up by 1.26%, HDFC Life Insurance up by 1.01% and Hero MotoCorp up by 0.93%. On the flip side, Titan Company down by 4.12%, Divi's Lab down by 1.91%, Shriram Finance down by 1.43%, Asian Paints down by 1.39% and Adani Ports & SEZ down by 1.14% were the top losers.

Asian markets are trading mixed; Hang Seng declined 238.22 points or 1.36% to 17,561.39, Shanghai Composite weakened 15.7 points or 0.53% to 2,934.23, Straits Times fell 7.39 points or 0.22% to 3,403.42 and Jakarta Composite was down by 7.06 points or 0.1% to 7,246.31. On the other hand, Taiwan Weighted surged 396.78 points or 1.68% to 23,953.37, Nikkei 225 rose 59.54 points or 0.15% to 40,971.91 and KOSPI was up by 1.36 points or 0.05% to 2,863.59.