Benchmarks wipe out opening losses to trade in green

Indian equity benchmarks made negative start on Monday tracking weakness in Asian counterparts, as traders reacted to the smaller than expected size of China's fresh stimulus measures and the release of weak inflation data over the weekend that spurred new concerns over the recovery in the world's second-largest economy. But soon markets wiped out their losses and entered into green terrain in early deals with healthy buying in IT, TECK and Auto counters. Some support came as Moody’s Ratings said with Donald Trump set to become the next US president after the recently closely contested president polls, India and other Asian countries are expected to benefit due to rising US-China tensions and potential investment restrictions in strategic sectors. Traders took note of Union Commerce and Industry Minister Piyush Goyal’s statement that India's growth story will take the country's $3.5 trillion economy now to $35 trillion in the next 25 years.

However, broader indices -- BSE Mid & Small cap indices -- are under performing larger peers with cut of around half a percent. Some cautiousness came after data shared by the Reserve Bank of India (RBI) showed that India's foreign exchange reserves dipped by $2.6 billion to $682.13 billion as of November 01. On the sectoral front, insurance industry stocks are in focus as Life Insurance Council report stated that the Indian life insurance sector recorded a robust year-on-year (YoY) growth in new business premiums (NBPs) for October 2024, with premiums increasing by 13.16 per cent compared to the same period last year. In stock specific development, REC traded higher as it is planning to raise an additional Rs 5,000 crore in the current fiscal year (FY25) by issuing deep-discount zero-coupon bonds.

The BSE Sensex is currently trading at 79517.53, up by 31.21 points or 0.04% after trading in a range of 79001.34 and 79522.80. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.44%, while Small cap index was down by 0.83%.

The top gaining sectoral indices on the BSE were IT up by 0.81%, TECK up by 0.69%, Auto up by 0.44%, Utilities up by 0.33% and Power up by 0.12%, while Basic Materials down by 1.08%, Metal down by 0.91%, Oil & Gas down by 0.86%, Energy down by 0.81% and Industrials down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.42%, Power Grid up by 2.10%, Maruti Suzuki up by 1.51%, TCS up by 1.30% and HCL Technologies up by 1.22%. On the flip side, Asian Paints down by 8.78%, Adani Ports & SEZ down by 1.50%, JSW Steel down by 1.24%, Tata Steel down by 1.22% and Reliance Industries down by 0.75% were the top losers.

Meanwhile, Moody's Ratings in its report has said that Donald Trump's presidency may see trade and investment flows diverting away from China as the US tightens investments in strategic sectors but this shift might benefit India and ASEAN countries. The November 5 election of Trump as the next US President will likely materially shift its policies from those of the current Joe Biden administration. In a second Trump administration, Moody's expects large fiscal deficits, protectionist trade actions, climate-measure rollbacks, a stricter stance on immigration, and easing regulations. Trump is likely to pursue more aggressive immigration policies, including increased deportations, the construction of additional border barriers, stricter visa regulations, and reduced asylum grants.

Moody's said ‘Although aimed at reducing unauthorised immigration and prioritising legal immigration based on merit, they could lead to labour shortages in sectors that rely heavily on immigrant labour, such as agriculture, retail, hospitality, construction and healthcare’. About Trump's foreign policy, it said in the Asia-Pacific region, trade and investment flows might be further diverted away from China as the US tightens investments in strategic sectors, which would negatively affect China's economy and consequently dampen regional growth. It said continued US-China polarisation risks exacerbating geopolitical divisions in the region, increasing risks of disruption to the global supply of semiconductors.

In Europe, it said the reduced US support for Ukraine might increase European governments' fiscal burdens as governments initially try to compensate for the US support. It added ‘US disengagement from NATO would also increase security risks in Europe by emboldening Russia, putting countries along NATO's eastern border at greatest risk. Also, the proposed blanket tariffs and US-China tensions will likely hurt trading partners in the region, but could indirectly benefit Europe by making it a more attractive investment destination because of its relative policy stability’.

The CNX Nifty is currently trading at 24171.90, up by 23.70 points or 0.10% after trading in a range of 24004.60 and 24176.70. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.58%, Power Grid up by 2.50%, Maruti Suzuki up by 1.74%, Britannia Industries up by 1.44% and HCL Technologies up by 1.16%. On the flip side, Asian Paints down by 8.52%, ONGC down by 1.09%, Adani Ports & SEZ down by 1.07%, BPCL down by 1.03% and Tata Steel down by 0.86% were the top losers.

All Asian markets are trading lower; Hang Seng slipped 439.2 points or 2.12% to 20,288.99, Taiwan Weighted lost 153.03 points or 0.65% to 23,400.86, Jakarta Composite plunged 70 points or 0.96% to 7,217.19, KOSPI declined 30.77 points or 1.2% to 2,530.38, Nikkei 225 weakened 13.75 points or 0.03% to 39,486.62, Straits Times fell 3.16 points or 0.08% to 3,721.21 and Shanghai Composite was down by 2.60 points or 0.08% to 3,449.70.