Sensex, Nifty trade lower in early deals tracking Asian counterparts

Indian equity benchmarks made a negative start on Thursday tracking sell-off in Asian counterparts as the US Fed's minutes showed policymakers are more inclined to keep interest rates steady amid stubborn inflation. The continued concerns about the potential impact of higher tariffs to be imposed by the US on partner nations also hurt market sentiment. Sensex and Nifty were trading lower with cut of around 0.35 percent each.  Some cautiousness came as foreign portfolio investors resumed their selling streak on Wednesday and offloaded shares worth Rs 1,881.30 crore.

However, broader indices -- BSE Mid & Small cap -- are outperforming largest peers with gains of around half a percent each. Some support came as S&P Global Ratings said the impact of the US reciprocal tariff will be limited on India as the economy is domestically oriented with less reliance on exports. It also said India will clock a 6.7-6.8 per cent GDP growth over the next two years.

On the sectoral front, power stocks are in focus as Moody's Ratings said India's power sector - the biggest carbon emitter - will need massive $700 billion investment over the next 10 years to help the country achieve its 2070 net-zero pledge. In stock specific development, India Glycols traded higher on securing Rs 1,264.2 crore order to supply ethanol.

The BSE Sensex is currently trading at 75643.05, down by 296.13 points or 0.39% after trading in a range of 75463.01 and 75741.17. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.42%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Metal up by 0.91%, Utilities up by 0.88%, Power up by 0.87%, Industrials up by 0.76% and PSU up by 0.71%, while Bankex down by 0.62%, FMCG down by 0.44%, Realty down by 0.13%, Consumer Durables down by 0.09% and Auto down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.35%, Infosys up by 0.88%, Reliance Industries up by 0.75%, Indusind Bank up by 0.42% and Power Grid up by 0.30%. On the flip side, HDFC Bank down by 1.97%, Maruti Suzuki down by 1.85%, ITC down by 1.03%, Kotak Mahindra Bank down by 0.78% and Bajaj Finance down by 0.66% were the top losers.

Meanwhile, S&P Global Ratings has said the impact of the US reciprocal tariff will be limited on India as the economy is domestically oriented with less reliance on exports. YeeFarn Phua, Director, Sovereigns and International Public Finance Ratings, Asia-Pacific S&P Global also said India will clock a 6.7-6.8 per cent GDP growth over the next two years. He added ‘these growth rates, even though slower than before, continue to place India above sovereign peers at similar income levels, and we do believe that this will continue to support fiscal revenue growth despite the income tax cuts’.

He said the fiscal 2025-26 budget will boost growth for the next few years, largely by domestic demand through tax cuts for households and GDP growth is now normalising to a more ‘sustainable level’. He said ‘The government remains very much focused on investment-led growth and also on agriculture sector reforms. However, we do think that economic expansion in India is startling to normalise towards a more sustainable level after real growth had averaged 8.3 per cent over the last three years post-pandemic.’

S&P Global Ratings has a 'BBB-' rating on India, which is the lowest investment grade. The outlook on the rating was positive, from stable, in May, 2024. Phua further said India's fiscal metrics continue to be quite positive and the tax revenue to GDP has grown over the last few years to around 12 per cent currently. The central government deficit has been lower since the pandemic years. S&P believes that the government will meet its fiscal deficit target of 4.8 per cent and 4.4 per cent for the current and the next fiscal respectively.

The CNX Nifty is currently trading at 22857.85, down by 75.05 points or 0.33% after trading in a range of 22812.75 and 22898.10. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.03%, Shriram Finance up by 1.61%, NTPC up by 1.24%, Cipla up by 1.15% and Bharat Electronics up by 0.87%. On the flip side, Maruti Suzuki down by 2.02%, HDFC Bank down by 1.97%, ITC down by 1.11%, Kotak Mahindra Bank down by 0.79% and Britannia Industries down by 0.78% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 691.13 points or 1.8% to 38,473.48, Hang Seng declined 316.73 points or 1.4% to 22,627.51, Taiwan Weighted lost 37.85 points or 0.16% to 23,566.23, KOSPI dropped 15.69 points or 0.59% to 2,655.83, Jakarta Composite fell 13.13 points or 0.19% to 6,781.74, Shanghai Composite weakened 5.45 points or 0.16% to 3,346.09 and Straits Times was down by 2.98 points or 0.08% to 3,931.06.