Sensex, Nifty trade flat with volatility in early deals

Indian equity benchmarks made positive start on Thursday with foreign institutional investors (FIIs) continuing to buy Indian equities for the second day in a row, albeit at a slower pace, amid strength in the US markets. Foreign institutional investors (FIIs) extended their buying on second day as they bought equities of Rs 1,797 crore on December 4. Soon, markets turned volatile and are trading flat in early deals as some cautiousness crept in amid mixed cues from Asian counterparts. Also, the weekly Nifty options expiry and some anxiety ahead of the RBI Policy outcome tomorrow weighed on the market sentiment. Some pessimism came after World Bank International Debt Report noted that India's total external debt has increased by $ 31 billion to $ 646.79 billion in 2023. The report further said that interest payment increased from $ 15.08 billion in 2022 to $ 22.54 billion in 2023. 

On the global front, Asian markets are trading mixed amid optimism about the outlook for interest rates following the release of some weaker than expected U.S. private sector employment data. However, geopolitical concerns in the Middle East and Ukraine as well as the political chaos in South Korea and France continue to weigh on the markets. US Fed Chair Jerome Powell also reiterated the central bank will take a cautious approach to cutting rates due to the continued strength of the economy. Back home, telecom stocks are in focus as the Department of Telecommunications (DoT) is pushing for an expansion of the Production Linked Incentive (PLI) scheme for telecom equipment and network products to further localise the manufacturing of key equipment and quickly capture the export demand for 4G and 5G gears.

The BSE Sensex is currently trading at 81029.07, up by 72.74 points or 0.09% after trading in a range of 80970.80 and 81198.87. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were IT up by 0.75%, TECK up by 0.75%, Telecom up by 0.65%, Consumer Discretionary up by 0.23% and FMCG up by 0.20%, while PSU down by 0.43%, Utilities down by 0.42%, Power down by 0.39%, Realty down by 0.35% and Metal down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.00%, TCS up by 0.75%, Infosys up by 0.66%, Tech Mahindra up by 0.55% and Ultratech Cement up by 0.49%. On the flip side, NTPC down by 1.42%, JSW Steel down by 0.99%, Asian Paints down by 0.65%, Maruti Suzuki down by 0.51% and Power Grid down by 0.45% were the top losers.

Meanwhile, Organisation for Economic Co-operation and Development (OECD) its new economic outlook has projected that India’s Gross Domestic Product (GDP) growth to be steady at just under 7% per year over 2024-2026, led by fixed investment, notably in manufacturing, amid rapid increases in public infrastructure spending. It also said GDP is expected to grow by 6.8% in fiscal year (FY) 2024-25. Strong investment is the main driver of this robust performance, with accelerating public infrastructure outlays. Vigorous credit growth is supporting private investment. Farm output is recovering as an above-normal monsoon is lifting rural incomes, and will soon ease food prices and inflation. Export growth is projected to pick up slightly, but could be weaker, given ongoing global tensions.

Annual private consumption growth also is projected to remain strong at around 6%, so long as inflation eases. However, external demand will provide less support in the future, as past gains in both export performance and the terms of trade diminish. Inflation is expected to drop back to the 4% official target by 2026. The current account will remain in a small and easily financeable deficit.

The main macroeconomic risks come from abroad, notably a weaker economic environment and higher commodity import prices, associated with a worsening global geopolitical environment or greater protectionism. Competitiveness losses from comparatively less favourable tariff treatment in export markets could also prove more harmful. Domestically, financial risks associated with small retail investor exuberance and booming derivatives trading have increased. On the other hand, India’s strong position in technology services or greater utilisation of potential female labour resources could underpin even faster growth than projected.

The CNX Nifty is currently trading at 24420.50, down by 46.95 points or 0.19% after trading in a range of 24415.05 and 24539.95. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Infosys up by 0.79%, Bharti Airtel up by 0.70%, TCS up by 0.60%, Tech Mahindra up by 0.57% and Wipro up by 0.44%. On the flip side, NTPC down by 1.73%, Bajaj Auto down by 1.52%, JSW Steel down by 0.93%, Power Grid down by 0.91% and Asian Paints down by 0.87% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 152.41 points or 0.39% to 39,428.80, Straits Times rose 39.43 points or 1.04% to 3,839.37, Taiwan Weighted advanced 39.29 points or 0.17% to 23,294.62 and Shanghai Composite added 5.53 points or 0.16% to 3,370.18. On the other hand, Hang Seng declined 196.62 points or 1% to 19,545.84, Jakarta Composite fell 23.27 points or 0.32% to 7,303.49 and KOSPI was down by 10.62 points or 0.43% to 2,453.38.