Sensex, Nifty trade below neutral lines during early noon

Indian equity benchmarks were trading below their neutral lines in early afternoon deals, with both Sensex and Nifty trading lower, as investors weighed escalating tensions between Israel and Hezbollah and kept a close eye on oil price movements for direction. Israeli airstrikes on Hezbollah strongholds in Lebanon early Monday resulted in the deaths of at least 492 people, including 35 children, according to Lebanon's health ministry. Sentiments were pessimistic, as the annual Periodic Labour Force Survey report stated that India's unemployment rate remained unchanged at 3.2% in 2023-24 (July-June), as female unemployment rose to 3.2 percent from 2.9 percent in the previous year. 

On the global front, Asian markets were trading higher, following dovish comments from the Bank of Japan and expectations that Beijing will ramp up efforts to boost growth.  However, Japan's private sector growth softened in September as manufacturing output fell back into the contraction territory. The survey results from S&P Global showed that the au Jibun Bank flash composite output index fell to 52.5 in September from 52.9 in the prior month. The services activity growth strengthened to a five-month high in September, while manufacturing output contracted for the second time in three months.

The BSE Sensex is currently trading at 84870.88, down by 57.73 points or 0.07% after trading in a range of 84716.07 and 85058.55. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose by 0.05%, while Small cap index was down by 0.06%.

The top gaining sectoral indices on the BSE were Metal up by 1.93%, Utilities up by 0.98%, Power up by 0.89%, Basic Materials up by 0.66% and Oil & Gas up by 0.48%, while FMCG down by 0.76%, Telecom down by 0.65%, IT down by 0.33%, TECK down by 0.30% and Realty down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.18%, Power Grid up by 2.43%, Larsen & Toubro up by 0.82%, Mahindra & Mahindra up by 0.64% and Maruti Suzuki up by 0.56%. On the flip side, Hindustan Unilever down by 1.80%, Nestle down by 1.64%, Ultratech Cement down by 1.52%, Kotak Mahindra Bank down by 1.35% and Indusind Bank down by 0.84% were the top losers.

Meanwhile, credit rating agency, S&P Global Ratings in its latest report ‘the economic outlook of Asia Pacific’ has retained India's growth forecast at 6.8 per cent for the current fiscal and for the fiscal 2025-26 at 6.9 per cent. The rating agency is expecting the RBI to start cutting interest rates in its October monetary policy review. According to it, solid growth in India will allow the Reserve Bank of India (RBI) to focus on bringing inflation in line with its target.

S&P said the RBI considers food inflation a hurdle for rate cuts. It reckons that unless there is a lasting and meaningful decline in the rate at which food prices are increasing it will be tough to maintain headline inflation at 4 per cent. The rating agency is expecting inflation to average 4.5 per cent in the current fiscal.

Meanwhile, the Indian economy grew 8.2 per cent in the last fiscal, while the RBI's interest rate-setting monetary policy committee is set to meet on October 7-9. The central bank has held the benchmark interest rate steady at 6.5 per cent since February 2023 to keep inflation under check.

The CNX Nifty is currently trading at 25925.85, down by 13.20 points or 0.05% after trading in a range of 25886.85 and 25981.50. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.27%, Power Grid up by 2.43%, Hindalco up by 1.35%, BPCL up by 1.01% and Coal India up by 0.92%. On the flip side, Hindustan Unilever down by 1.85%, Nestle down by 1.61%, Ultratech Cement down by 1.43%, SBI Life Insurance down by 1.41% and LTIMindtree down by 1.31% were the top losers.

All Asian markets were trading higher; Hang Seng advanced 660.34 points or 3.49% to 18,907.45, Jakarta Composite gained 6.01 points or 0.08% to 7,781.74, Shanghai Composite strengthened 98.55 points or 3.46% to 2,847.47, Straits Times rose 6.06 points or 0.17% to 3,644.60, KOSPI increased 29.67 points or 1.13% to 2,631.68, Nikkei 225 surged 216.68 points or 0.57% to 37,940.59 and Taiwan Weighted added 146.25 points or 0.65% to 22,431.78.