Sensex, Nifty trade lower in early deals amid heightened U.S.-China tensions

Indian equity benchmarks made negative start on Thursday as investors fretted about rising oil prices and heightened U.S.-China tensions. Sensex and Nifty are trading lower in early deals amid selling in Capital Goods, Industrials and Realty stocks. Mostly negative cues from Wall Street overnight as well as weakness in Asian counterparts also dampened sentiments in the markets, as technology stocks tumbled following a sell-off in U.S. semiconductor stocks amid prospects of tighter trade curbs on Chinese companies by the US administration. There are also concerns that another Trump presidency could disrupt global trade. However, lowerside remained capped as some support came in after the International Monetary Fund in its World Economic Outlook raised India’s growth forecast for FY25 to 7 percent from 6.8 percent projected in April. It noted the forecast for growth in India has been revised upward, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas. 

On the sectoral front, jewelary industry are in focus after data by Gem and Jewellery Export Promotion Council (GJEPC) showed that India's overall gems and jewellery exports witnessed an on-year decline of 13.44 per cent in June 2024 at Rs 15,939.77 crore ($1,909.57 million) against Rs 18,413.88 crore ($2,240.77 million) during June 2023 amid muted demand in overseas markets. In stock specific development, ONGC soared after the company announced that it has commenced production from Coal Bed Methane Block (CBM) in Bokaro, Jharkhand.

The BSE Sensex is currently trading at 80636.60, down by 79.95 points or 0.10% after trading in a range of 80390.37 and 80652.18. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.74%, while Small cap index was down by 0.74%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.62%, Energy up by 0.22%, FMCG up by 0.18% and Bankex up by 0.18%, while Capital Goods down by 1.69%, Industrials down by 1.46%, Realty down by 1.03%, Power down by 0.98% and Consumer Durables down by 0.84% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 0.78%, TCS up by 0.39%, Sun Pharma up by 0.32%, ICICI Bank up by 0.29% and SBI up by 0.27%. On the flip side, Asian Paints down by 1.80%, Tata Steel down by 1.02%, Adani Ports & SEZ down by 0.88%, Bajaj Finance down by 0.83% and Tata Motors down by 0.79% were the top losers.

Meanwhile, the International Monetary Fund (IMF), in its latest ‘World Economic Outlook Update, July 2024’, has revised India’s growth projection upward to 7 per cent for 2024 from 6.8 per cent projected earlier, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas. The country maintaining the fastest-growing status in emerging markets and developing economies. 

The IMF had earlier projected growth rate of 6.5 per cent for 2024, revising it to 6.8 per cent and now 7 per cent. For the year 2025, the IMF has maintained its growth projection for the country at 6.5 per cent. It attributed robustness and strength in domestic demand and a rising working-age population behind its growth projections.

IMF said the forecast for growth in emerging market and developing economies has been revised upward and the projected increase is powered by stronger activity in Asia, particularly China and India. For China, the growth forecast has been revised upward to 5 percent in 2024, primarily on account of a rebound in private consumption and strong exports in the first quarter.

According to the Indian government data, India’s GDP grew at an impressive 8.2 per cent during the financial year 2023-24, and it continued to remain the fastest-growing major economy. India’s economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22 respectively.

The CNX Nifty is currently trading at 24647.90, up by 34.90 points or 0.14% after trading in a range of 24515.10 and 24649.40. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.65%, LTIMindtree up by 2.47%, Axis Bank up by 0.95%, Apollo Hospital up by 0.94% and Shriram Finance up by 0.86%. On the flip side, Bajaj Auto down by 2.46%, Asian Paints down by 1.63%, Hero MotoCorp down by 0.86%, Tata Steel down by 0.73% and Coal India down by 0.72% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 762.22 points or 1.85% to 40,335.47, Taiwan Weighted lost 545.3 points or 2.29% to 23,224.52, KOSPI dropped 35.45 points or 1.25% to 2,807.84, Straits Times fell 20.55 points or 0.59% to 3,469.02 and Shanghai Composite weakened 3.6 points or 0.12% to 2,959.25. On the other hand, Jakarta Composite rose 88.21 points or 1.22% to 7,312.43 and Hang Seng was up by 47.61 points or 0.27% to 17,787.02.