Key gauges trade flat in morning deals

Indian equity benchmarks were trading flat in morning deals, amid rising tensions between India and Pakistan and concerns about the outlook for the global economy. Traders remained cautious as S&P Global Ratings said the hostilities between India and Pakistan heighten risks to the credit metrics of both countries, and any escalation in clashes would put downward pressure on sovereign credit support. Traders also took a note of economic think tank GTRI’s statement that allowing UK firms to participate in India's central government procurement tenders could crowd out MSMEs, which rely heavily on protected access to such contracts. However, traders took some support with provisional data showed foreign investors continued their buying momentum in May, pouring Rs 2,586 crore into Indian equities on Wednesday, marking their fifteenth straight day of inflows. On the global front, Asian markets are trading mostly in green after confirmation that trade talks between the U.S. and China would take place in Switzerland this week, marking the first formal talks between the countries since U.S. President Donald Trump declared sweeping tariffs last month.

The BSE Sensex is currently trading at 80757.71, up by 10.93 points or 0.01% after trading in a range of 80657.30 and 80927.99. 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 0.50%, while Small cap index was up by 1.32%. 

The top gaining sectoral indices on the BSE were Telecom up by 1.08%, Industrials up by 0.96%, Consumer Durables up by 0.61%, Capital Goods up by 0.56% and Bankex up by 0.55%, while FMCG down by 0.60%, Healthcare down by 0.24%, Auto down by 0.07% and Oil & Gas down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.77%, Adani Ports &SEZ up by 1.61%, Kotak Mahindra Bank up by 1.53%, SBI up by 1.17% and HCL Technologies up by 1.02%. On the flip side, Eternal down by 2.11%, ITC down by 1.40%, Maruti Suzuki down by 1.35%, Mahindra & Mahindra down by 1.03% and HDFC Bank down by 0.78% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the profitability of domestic primary aluminium manufacturers is likely to remain healthy in the current financial year despite some moderation amid global headwinds, including higher US tariffs. The US raised the tariff on aluminium imports to 25 per cent for all countries. For India, the increase in tariff from 2.55 per cent to 25 per cent will have a limited direct impact as the US accounted for less than five per cent of India's aluminium exports over the past five financial years.

It stated the robust profitability will support healthy operating cash flow required for the ongoing capital expenditure (capex) by domestic primary aluminium players and will keep credit profiles comfortable. Nonetheless, with nearly 50 per cent of the country's annual primary aluminium output exported, Indian producers may face heightened competition in their regular overseas markets, as key exporters to the US divert supplies to other geographies. Despite this, trade volume is unlikely to be drastically disrupted, given the historical tight match between global primary aluminium demand and supply, which is expected to continue this fiscal as well. 

Crisil Ratings Director Ankit Hakhu said ‘While global demand growth may moderate this fiscal, surplus will still be limited. This is because the global aluminium market faces limited risk of oversupply, as smelters in major aluminium-producing countries, including India, have consistently operated at utilisation rates well above 90 per cent. Moreover, there is limited primary aluminium capacity in the US -- which has been relying on imports to meet over 80 per cent of its primary aluminium demand -- and setting up new smelter capacities has a long gestation period. India’s position as one of the lowest-cost primary aluminium producers globally provides a comfortable cushion against the potential increase in competition in overseas markets’.

The CNX Nifty is currently trading at 24405.70, down by 8.70 points or 0.04% after trading in a range of 24373.45 and 24447.25. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.73%, Adani Ports &SEZ up by 1.82%, Kotak Mahindra Bank up by 1.48%, Trent up by 1.41% and Coal India up by 1.41%. On the flip side, Eternal down by 2.20%, Tata Consumer Product down by 1.89%, ITC down by 1.52%, Maruti Suzuki down by 1.48% and Cipla down by 1.28% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 146.21 points or 0.4% to 36,925.87, Taiwan Weighted added 156.54 points or 0.76% to 20,703.03, Hang Seng advanced 250.03 points or 1.09% to 22,941.91, KOSPI increased 12.19 points or 0.47% to 2,585.99, Straits Times rose 7.73 points or 0.2% to 3,873.10 and Shanghai Composite strengthened 12.59 points or 0.38% to 3,355.26.

On the flip side, Jakarta Composite plunged 32.93 points or 0.48% to 6,893.30.