Domestic indices trade flat in late morning deals

Domestic equity markets erased gains and were trading flat in late morning deals as market participants remained on sidelines ahead of the Union Budget 2024 presentation on July 23. Selling in Reliance Industries, Kotak Mahindra Bank, ITC, Indusind Bank and SBI companies’ stocks weighed on the markets. Further, weak cues from the global markets weighed the domestic sentiments. Traders overlooked report that the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) said India is likely to have the highest per-capita income growth in the world at 5.4 per cent per annum during 2024-33, allowing it and other emerging economies to drive global consumption of agricultural and fisheries products in the next decade. On the BSE sectoral front, traders were seen pilling up positions in Power, Utilities, PSU, Basic Materials and Healthcare, while selling was witnessed in Realty, FMCG, Bankex and Energy. 

On the global front, Asian markets were mostly trading in red amid political uncertainty after U.S. President Joe Biden decided to end his re-election campaign against former President Donald Trump and offered his full support and endorsement' for Vice-President Kamala Harris as the presidential nominee for the Democratic Party. Back home, in the stock specific developments, Wipro tumbled after posting disappointing quarterly result.

The BSE Sensex is currently trading at 80596.66, down by 7.99 points or 0.01% after trading in a range of 80100.65 and 80800.92. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.26%, while Small cap index up by 0.78%.

The top gaining sectoral indices on the BSE were Power up by 1.42%, Utilities up by 1.41%, PSU up by 1.37%, Basic Materials up by 1.24% and Healthcare up by 1.15%, while Realty down by 0.18%, FMCG down by 0.17%, Bankex down by 0.17% and Energy down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.66%, HDFC Bank up by 2.14%, Ultratech Cement up by 1.89%, Mahindra & Mahindra up by 1.70% and Power Grid up by 1.66%. On the flip side, Reliance Industries down by 3.24%, Kotak Mahindra Bank down by 2.87%, ITC down by 1.33%, Indusind Bank down by 1.09% and SBI down by 0.98% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the monetary policy has to be ‘clearly and unambiguously’ focused on inflation in an environment like the current one, where growth is steady. Amid a debate around neutral rates, he said theoretical and abstract concepts as arrived at are based on a person’s judgment and cannot determine the policy in the real world. It can be noted that the RBI has been steadfastly maintaining the status quo on interest rates, and there is increasing dissent among some members of the rate-setting panel who are in favour of rate cuts to promote economic growth lately. 

Talking about the impact on growth because of the elevated interest rates, Das said that the growth has been robust even with the current interest rates and the RBI is optimistic that its 7.2 per cent real GDP expansion estimate for FY25 is being achieved. Moreover, the nowcast team is pointing towards a 7.4 per cent growth in the June quarter (Q1FY25) as against the monetary policy committee’s expectation of 7.3 per cent, and that the momentum will continue into the Q2 as well. In the last three years, the average growth of India has been 8.3 per cent. 

The Governor further said the RBI is looking specifically on the food inflation front, and also if there is a spillover of - Wholesale Price Inflation (WPI), which moved up to a 16-month high for June into consumer price inflation. He said ‘it is the food inflation which is drawing our greatest attention because that is actually giving the push to the headline numbers because core and fuel inflation are quite low. Food inflation is the worry’.

The CNX Nifty is currently trading at 24530.00, down by 0.90 points after trading in a range of 24362.30 and 24595.20. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.75%, NTPC up by 2.65%, HDFC Bank up by 2.07%, Dr. Reddy's Lab up by 1.84% and Ultratech Cement up by 1.78%. On the flip side, Wipro down by 8.44%, Reliance Industries down by 3.25%, Kotak Mahindra Bank down by 2.91%, ITC down by 1.53% and Indusind Bank down by 1.10% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite weakened 30.05 points or 1.01% to 2,952.26, Straits Times fell 4.67 points or 0.14% to 3,442.89, KOSPI dropped 28.16 points or 1.01% to 2,767.30, Nikkei 225 slipped 523.7 points or 1.31% to 39,540.09 and Taiwan Weighted lost 581.42 points or 2.61% to 22,287.84. However, Hang Seng advanced 109.85 points or 0.63% to 17,527.53 and Jakarta Composite gained 11.86 points or 0.16% to 7,306.36.