Markets trade flat in early deals amid volatility

Indian equity benchmarks made a slightly positive start on Tuesday tracking gains in Asian counterparts. But soon, indices turned volatile and were trading flat in early deals amid lack of directional cues from Wall Street. Some pessimism came as India’s exports declined for the third month in a row in January by 2.38% to $37.32 billion due to volatility in petroleum prices and global uncertainties. 

On the global front, all Asian markets are trading higher, following the broadly positive cues from European markets, as markets react positively to easing geopolitical tensions after US President Donald Trump's decision to open talks with Russia on ending the war with Ukraine without a European presence.

Back home, sugar stocks are in focus as industry body ISMA’s data showed that India's sugar production fell 12 per cent to 19.7 million tonnes till February 15 of the current marketing year ending September mainly due to lower output in Maharashtra and Karnataka. In stock specific development, ABB India rallied on robust quarterly results.

The BSE Sensex is currently trading at 76086.44, up by 89.58 points or 0.12% after trading in a range of 75778.95 and 76086.80. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.58%, while Small cap index was down by 1.27%.

The only gaining sectoral indices on the BSE were IT up by 0.75% and TECK up by 0.67%, while Industrials down by 1.21%, PSU down by 0.99%, Basic Materials down by 0.99%, Metal down by 0.88%, Telecom down by 0.88% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.35%, Bajaj Finserv up by 1.03%, Infosys up by 0.99%, HCL Technologies up by 0.77% and Sun Pharma up by 0.75%. On the flip side, Tata Steel down by 1.23%, Adani Ports & SEZ down by 1.15%, Indusind Bank down by 1.04%, Ultratech Cement down by 0.96% and Larsen & Toubro down by 0.74% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has clarified that the massive income tax relief given in Budget 2025 doesn't mean that the government has shifted focus to consumption from capital expenditure. Keeping people earning up to Rs 12 lakh annually out of the income tax ambit has triggered a debate that the government has shifted focus to boosting consumption after the two consecutive quarter GDP figures showed tepid growth.

Sitharaman said there is no reason for people to think that the emphasis has shifted from capital expenditure to consumption, as he spelt out the consistent rise in capital spending provisions over the past few years. She supplemented that the broad picture is that the government's emphasis since COVID remains on public expenditure for building capital assets. This time, the capex provisioned in the Budget 2025 is over 10.2 per cent higher at about Rs 16 lakh crore, including the PSUs capex spending. The government itself has Budgeted Rs 11.21 lakh capex for 2025-26.

The effective capital expenditure is projected at 15.48 lakh crore as against 13.18 lakh crore in the revised estimates of 2024-25. Effective capital expenditure includes core capital outlays and the grants in aid to states for creation of capital assets. Though the grants in aid for creation of capital assets is accounted in Budget as revenue expenditure, they go for creating capital assets in the states. She said ‘And therefore, I would think the emphasis, or any reason for people to think that the emphasis has shifted from capital expenditure towards consumption, is not right’.

She added that the government has enhanced the capital expenditure budget and simultaneously given some concessions through a reduction in tax, particularly personal income tax, for people who would want to spend or save or invest. In Union Budget for 2025-26 income tax exemption limit has been extended from Rs 7 lakh to Rs 12 lakh, providing significant relief to taxpayers, especially the middle class. An estimated one crore middle-income Indian taxpayers will be out of the tax net. As a result of these tax relief proposals, the government will forego revenue of about Rs 1 lakh crore in direct taxes and Rs 2600 crore in indirect taxes.

The CNX Nifty is currently trading at 22921.05, down by 38.45 points or 0.17% after trading in a range of 22868.45 and 22992.50. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.20%, Wipro up by 1.00%, Infosys up by 0.89%, Apollo Hospital up by 0.86% and HCL Technologies up by 0.73%. On the flip side, Bharat Electronics down by 1.53%, Indusind Bank down by 1.51%, Tata Steel down by 1.50%, Grasim Industries down by 1.35% and Trent down by 1.27% were the top losers.

All Asian markets are trading higher; Hang Seng jumped 464 points or 2.01% to 23,080.23, Nikkei 225 surged 257.39 points or 0.66% to 39,431.64, Jakarta Composite gained 53.92 points or 0.79% to 6,884.80, Taiwan Weighted advanced 46.52 points or 0.2% to 23,551.85, KOSPI increased 13.98 points or 0.54% to 2,624.40, Shanghai Composite added 9.68 points or 0.29% to 3,365.51 and Straits Times was up by 9.24 points or 0.24% to 3,914.09.