Markets wipe out opening gains to trade lower in early deals

Indian equity benchmarks started Thursday’s trading session in green terrain following the broadly positive cues from Wall Street overnight as well as positive cues from Asian counterparts as concerns over a global trade war eased amid amicable measures from both the US and China. A notable move to the downside by treasury yields also aided the markets' upside. Soon markets wiped out their gains and slipped below neutral lines to trade lower with marginal cuts in early deals. Some cautiousness prevailed among market participants ahead of the Reserve Bank of India's interest rate decision, scheduled to be announced on Friday from the Monetary Policy Committee meeting that will be underway for the second day. There are expectations of a 25 basis-points rate cut. Investor also remained on sidelines ahead of the weekly expiry of options of Nifty 50 contracts.

On the sectoral front, gold related stocks are in limelight as the World Gold Council said gold demand in India witnessed a 5 per cent on-year rise at 802.8 tonnes in 2024 supported by reduction in import duty, and purchases related to weddings and festivals. In stock specific development, Swiggy tumbled after widening its quarterly net loss.

The BSE Sensex is currently trading at 78077.10, down by 194.18 points or 0.25% after trading in a range of 78065.80 and 78551.66. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.11%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were IT up by 0.35%, Healthcare up by 0.31%, Oil & Gas up by 0.23%, Energy up by 0.18% and Industrials up by 0.06%, while Consumer Durables down by 0.72%, Auto down by 0.60%, FMCG down by 0.45%, Realty down by 0.42% and Metal down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 0.72%, Infosys up by 0.67%, Indusind Bank up by 0.62%, Reliance Industries up by 0.44% and HCL Technologies up by 0.40%. On the flip side, Titan Company down by 1.53%, Ultratech Cement down by 1.34%, Mahindra & Mahindra down by 1.27%, ITC down by 1.17% and Bharti Airtel down by 0.98% were the top losers.

Meanwhile, the State Bank of India (SBI) in its latest report has said that the government’s market borrowing plans for the financial year 2025-26 (FY26) appear well-placed to support fiscal policy while complementing monetary policy. For FY26, the report noted that the government has budgeted gross market borrowing through dated securities at Rs 14.8 lakh crore, while repayments are estimated at Rs 3.3 lakh crore.

This brings net market borrowing to Rs 11.5 lakh crore, which is about 73 per cent of the fiscal deficit. The net borrowing figure is higher than the Rs 10.5 lakh crore in the previous budget. Additionally, the government has announced a switch of Rs 2.5 lakh crore, meaning that it will replace some older securities with new ones. However, the report clarified that this will not have any impact on the overall fiscal situation. It stated at the state level, gross borrowing is expected at Rs 10.9 lakh crore, while repayments are pegged at Rs 3.7 lakh crore. 

This results in net borrowing of Rs 7.2 lakh crore. When combined with central government borrowing, the total net borrowing of the Centre and states together comes to Rs 18.7 lakh crore. When including borrowing by public sector undertakings (PSUs), the total borrowing in FY25 stands at 6.1% of GDP. Looking ahead, it estimated that gross market borrowing over the next five years (FY27 to FY31) will be between Rs 93.8 lakh crore and Rs 95.2 lakh crore. This would average around Rs 18-19 lakh crore per year, which is higher than the current annual borrowing rate of Rs 15 lakh crore. Given the rising borrowing requirements, it also highlighted the need for the government to explore alternative funding sources such as small savings schemes to reduce reliance on market borrowings. 

Further, it said ‘Government Fiscal path for next 5 years shows challenge in diversifying the borrowing base.’ The Union Budget for FY26 has outlined different fiscal scenarios based on GDP growth trends and fiscal adjustments for the five years from FY27 to FY31. It indicated that managing the borrowing program will be challenging and that there is a need to diversify borrowing sources will be crucial for maintaining fiscal stability.

The CNX Nifty is currently trading at 23640.60, down by 55.70 points or 0.24% after trading in a range of 23623.85 and 23773.55. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.84%, Dr. Reddy's Lab up by 1.34%, Cipla up by 1.28%, Hero MotoCorp up by 0.98% and Bajaj Finance up by 0.95%. On the flip side, Ultratech Cement down by 1.78%, Shriram Finance down by 1.58%, Titan Company down by 1.50%, Mahindra & Mahindra down by 1.33% and Trent down by 1.23% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 173.43 points or 0.45% to 39,004.91, Taiwan Weighted rose 97.18 points or 0.42% to 23,258.76, Hang Seng advanced 58.85 points or 0.29% to 20,655.94, Shanghai Composite strengthened 24.63 points or 0.76% to 3,254.12, KOSPI increased 20.42 points or 0.81% to 2,529.69 and Straits Times was up by 17.46 points or 0.46% to 3,832.83, while Jakarta Composite was down by 118.51 points or 1.69% to 6,905.72.