Markets trade with traction amid barging buying

Indian equity benchmarks made a gap-up opening on Tuesday tracking firm cues from Asian counterparts. Markets are trading with traction in early deals amid barging buying after previous session’s sell-off and ahead of the Indian central bank's rate setting meeting later in the week. There are expectations that the Reserve Bank of India (RBI) is likely to reduce the policy repo rate for the first time in almost five years. Some support came as Finance Secretary Tuhin Kanta Pandey said the FY26 Budget has given sufficient non-inflationary stimulus to the economy which will promote incremental growth. Also, a report by Crisil said India's economy is expected to grow at 6.5 per cent in the financial year 2025-26 (FY26), slightly higher than the 6.4 per cent growth estimated for the ongoing fiscal year (FY25).

On the global front, most of the Asian markets are trading higher, despite the broadly negative cues from Wall Street overnight, as traders react positively to US President Donald Trump's latest decision to delay imposing the planned tariffs on Mexico and Canada after successful negotiations with the respective leaders. The tariffs could have renewed inflation fears, leading the US Fed to keep interest rates on hold for longer. Meanwhile, China remains closed for the Lunar New Year break. 

Back home, in stock specific development, NLC India climbed after a sharp rise in Q3 net profit to Rs 668 crore, up from Rs 250 crore Y-o-Y. However, Power Grid declined after Q3 consolidated net profit came in at Rs 3,860 crore, down from Rs 4,030 crore Y-o-Y.

The BSE Sensex is currently trading at 77894.19, up by 707.45 points or 0.92% after trading in a range of 77516.99 and 77909.13. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.18%, while Small cap index was up by 0.98%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.27%, Metal up by 1.90%, PSU up by 1.83%, Industrials up by 1.73% and Oil & Gas up by 1.69%, while FMCG down by 0.59% was the sole losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.59%, Infosys up by 2.15%, Tata Motors up by 2.05%, ICICI Bank up by 1.94% and SBI up by 1.88%. On the flip side, Hindustan Unilever down by 1.38%, Power Grid down by 1.36%, Asian Paints down by 0.86%, Nestle down by 0.78% and ITC down by 0.78% were the top losers.

Meanwhile, expressing optimism over Union Budget 2025-26, Finance Secretary Tuhin Kanta Pandey said that this Budget has given sufficient non-inflationary stimulus to the economy which will promote incremental growth. He said the Budget has a balanced ‘growth and inflation mix’, while keeping exchange rates, macroeconomic stability in mind and controlling the fiscal consolidation. He said ‘We also have sufficient stimulus in the economy, a non-inflationary stimulus, which will promote savings, investment and growth. It will push incremental growth, work on the demand side and work on the supply side’.

Pandey said the Budget had to balance the competing imperatives. He said ‘We have to have fiscal consolidation on the one hand because we don’t want to be inflationary in our approach. If we try to stimulate (the economy) when we should not, it may turn inflationary and will reverse the very process of inflation control that we have been working at and will be counterproductive.’ He added ‘So, the Budget we have come out with, in terms of various things, balances all these imperatives while we control the fiscal consolidation’.

He noted that the Budget has several demand-side measures and several supply-side measures, including the agriculture sector. He said ‘Food inflation, for example, if we are not able to really address some of those structural supply factors it will keep hurting us year after year and it will keep our interest rates high. It doesn’t help industry, doesn’t help the middle class, because people end up higher equated monthly instalments.’ He added ‘But then if you have inflation, then you cannot have proper growth. You have to have inflation under control. So, therefore, the growth and inflation mix needs to be considered together, keeping our exchange rates and macroeconomic stability in mind. So all these factors we have taken on board while trying to balance.’

The CNX Nifty is currently trading at 23572.40, up by 211.35 points or 0.90% after trading in a range of 23479.45 and 23573.75. There were 37 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.41%, ONGC up by 2.73%, Bharat Electronics up by 2.68%, Larsen & Toubro up by 2.66% and Infosys up by 2.21%. On the flip side, Trent down by 4.13%, Power Grid down by 1.44%, Hindustan Unilever down by 1.22%, Britannia Industries down by 1.08% and Apollo Hospital down by 0.85% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 485.3 points or 1.26% to 39,005.39, Hang Seng jumped 404.88 points or 2% to 20,622.14, Taiwan Weighted rose 106.61 points or 0.47% to 22,801.32, Jakarta Composite gained 79.62 points or 1.13% to 7,109.68 and KOSPI was up by 35.88 points or 1.46% to 2,489.83, while Straits Times was down by 6.11 points or 0.16% to 3,820.36.