Sensex, Nifty trim opening gains; trade flat in early deals

Indian equity benchmarks made positive start on Thursday tracking gains in global peers. Sensex and Nifty soon trimmed some of their gains and are hovering near neutral lines with marginal gains in early deals. Foreign fund inflows aided domestic sentiments. On July 10, foreign institutional investors (FIIs) purchased shares worth Rs 583.96 crore. Traders took encouragement as labour ministry said retail inflation for industrial workers eased to 3.86 per cent in May compared to 4.42 per cent in the same month a year ago. Some optimism came as a State Bank of India (SBI) report showed that between FY14 and FY23, India generated 125 million jobs, which is 4.3 times more than the preceding decadal period of FY04-FY14. 

On the global front, all the Asian markets are trading higher following the broadly positive cues from global markets overnight, amid optimism about an interest rate cut by the US Fed in September ahead of the release of closely watched US consumer price inflation data later in the day. The data is expected to show inflation continued to moderate in June. Meanwhile, the value of core machine orders in Japan was down a seasonally adjusted 3.2 percent on month in May, the Cabinet Office said - coming in at 857.8 billion yen.

Back home, banking stocks are in focus after the Reserve Bank of India permitted banks to use ratings by Brickwork Ratings India for loans of up to Rs 250 crore. The RBI, in October 2022, asked banks and other regulated entities not to obtain any fresh ratings from Brickwork Ratings India. In stock specific development, HPL Electric & Power traded with traction on receiving work orders/Letter of Award of Rs 2,100.71 crore from their regular leading customers for the supply of smart meters in the normal course of business.

The BSE Sensex is currently trading at 79974.84, up by 50.07 points or 0.06% after trading in a range of 79870.38 and 80170.09. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.48%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Metal up by 0.80%, PSU up by 0.64%, Capital Goods up by 0.59%, Basic Materials up by 0.59% and IT up by 0.54%, while FMCG down by 0.24%, Realty down by 0.23%, Healthcare down by 0.21%, Power down by 0.08% and Utilities down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.65%, Tata Steel up by 1.43%, TCS up by 1.03%, HCL Technologies up by 0.96% and SBI up by 0.79%. On the flip side, Nestle down by 1.42%, HDFC Bank down by 0.74%, Sun Pharma down by 0.71%, Power Grid down by 0.65% and NTPC down by 0.45% were the top losers.

Meanwhile, expressing optimism over India and the UK free trade agreement (FTA), Commerce and Industry Minister Piyush Goyal has said both the countries are committed to the proposed FTA. He said that the initial comments made by the new UK government are ‘very’ encouraging. Britain's newly-elected Prime Minister Keir Starmer said he stood ready to conclude an FTA that worked for both sides. 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 India-UK talks for the proposed free trade agreement (FTA) began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles. In an FTA, two or more trading partners either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they also ease norms to promote and facilitate trade in services and investments. 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).

The CNX Nifty is currently trading at 24350.40, up by 25.95 points or 0.11% after trading in a range of 24310.15 and 24402.65. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.65%, Coal India up by 1.63%, Tata Steel up by 1.46%, BPCL up by 1.30% and HCL Technologies up by 1.08%. On the flip side, Nestle down by 1.21%, Sun Pharma down by 0.96%, Power Grid down by 0.72%, HDFC Bank down by 0.70% and Divi's Lab down by 0.55% were the top losers.

All Asian markets are trading higher; Nikkei 225 surged 438.91 points or 1.05% to 42,270.90, Taiwan Weighted jumped 362.63 points or 1.51% to 24,369.71, Hang Seng rose 268.77 points or 1.52% to 17,740.44, Shanghai Composite strengthened 22.63 points or 0.76% to 2,961.99, Jakarta Composite gained 20.46 points or 0.28% to 7,307.50, KOSPI added 17.24 points or 0.6% to 2,885.23 and Straits Times was up by 14.53 points or 0.42% to 3,474.46.