Sensex, Nifty wipe out opening gains to trade flat in early deals

Indian equity benchmarks made positive start on Thursday amid overnight fall in crude oil prices on pessimism about demand in the coming months as crude producers offered mixed signals about supply increases. Soon, markets wiped out their gains and hovering around neutral lines. At this point of trade, Sensex and Nifty are trading flat with positive bias amid buying at basic materials and metal counters. Foreign fund inflows aided the domestic markets. Foreign institutional investors (FII) bought shares net worth Rs 975.46 crore on September 04, 2024, according to the provisional data available on the NSE. Some support came as NITI Aayog CEO B.V.R. Subrahmanyam said the Free Trade Agreement (FTA) being negotiated between India and the UK is in the final stages with both sides within finger-touching distance to clinch an agreement. The FTA is aimed at significantly enhancing the estimated GBP 38.1 billion a year bilateral trading partnership. 

However, markets trimmed their gains tracking overnight weakness in Wall Street coupled with mixed cues from Asian counterparts as traders assess the outlook for US interest rate cuts after another set of below-par data put extra focus on the upcoming jobs report. On the sectoral front, paper industry stocks are in focus as a report by Indian Paper Manufacturers Association (IPMA) for 2023-24 noted that India remains the fastest-growing paper market in the world with domestic consumption of packaging paper and paperboard growing at 8.2 per cent in 2023-24. In stock specific development, Sona BLW Precision Forgings traded higher as it received certification for another Product i.e. Hub Wheel Motor for electric two wheelers under the Production-Linked Incentive (PLI) Scheme for Automobile.

The BSE Sensex is currently trading at 82365.74, up by 13.10 points or 0.02% after trading in a range of 82319.05 and 82617.49. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.38%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.81%, Healthcare up by 0.65%, Consumer Durables up by 0.48%, Consumer Discretionary up by 0.44% and Metal up by 0.43%, while Realty down by 0.32%, Capital Goods down by 0.21%, TECK down by 0.18%, Power down by 0.14% and PSU down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.69%, Titan Company up by 1.27%, JSW Steel up by 1.09%, Tata Steel up by 0.63% and ITC up by 0.60%. On the flip side, Nestle down by 0.66%, HCL Technologies down by 0.64%, Bharti Airtel down by 0.59%, Maruti Suzuki down by 0.47% and NTPC down by 0.47% were the top losers.

Meanwhile, with an aim to accelerate capex (capital expenditure) for the current fiscal (FY 2024-25) and provide requisite operational flexibility in the execution of the Budget, the finance ministry has relaxed norms for big releases above Rs 500 crore for all items of expenditure in the current financial year. This will give a push to government spending which suffered a slowdown for a couple of months due to general elections. Finance Minister Nirmala Sitharaman in the Budget proposed to raise the capital expenditure target by 11.1 per cent to record Rs 11.11 lakh crore for 2024-25.

It added the relaxation permitted is subject to strict compliance by all ministries and departments. All expenditures should be in compliance of the guidelines of the Single Nodal Agency (SNA)/Central Nodal Agency (CNA) and Monthly Expenditure Plan (MEP) and Quarterly Expenditure Plan (QEP) ceiling prepared by ministries for both scheme and non-scheme expenditure. It also said that Financial Advisers would review and freeze the timing of the receipts of dividends of various other non-tax receipts of their respective ministry and department. It added the dividend payments and buyback considerations would be targeted in the H1 part of the financial year.

Earlier, according to a May 2022 memorandum, the release of amounts ranging between Rs 500 crore and Rs 2,000 crore had to be prepared to enable tracking of expenditure and cash flow. The range of dates for such releases may be kept between the 21st and 25th of a month to take advantage of the Goods and Services Tax (GST) inflows. Similarly, bulk expenditure items of over Rs 2,000 crore in value were to be timed during the second fortnight in the last month of the quarter to avail of direct tax receipts inflow. Now, these conditions will not exist.

The CNX Nifty is currently trading at 25208.90, up by 10.20 points or 0.04% after trading in a range of 25187.00 and 25275.45. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.79%, Titan Company up by 1.33%, Shriram Finance up by 1.24%, JSW Steel up by 0.95% and ITC up by 0.75%. On the flip side, HDFC Life Insurance down by 0.80%, Nestle down by 0.64%, HCL Technologies down by 0.60%, Bharti Airtel down by 0.53% and Britannia Industries down by 0.51% were the top losers.

Asian markets are trading mixed; Taiwan Weighted jumped 286.74 points or 1.34% to 21,379.49, Jakarta Composite gained 30.93 points or 0.4% to 7,703.83, Straits Times rose 6.32 points or 0.18% to 3,447.70 and Shanghai Composite strengthened 1.1 points or 0.04% to 2,785.38. On the other hand, Nikkei 225 slipped 375.07 points or 1.02% to 36,672.54, Hang Seng declined 86.62 points or 0.5% to 17,370.72 and KOSPI dropped 7.10 points or 0.28% to 2,573.70.