Sensex, Nifty trade flat with positive bias in early deals

Indian equity benchmarks made an optimistic start on Tuesday following the broadly positive cues from Wall Street overnight, amid increasing expectations of a U.S. Fed interest rate cut next month after recent data showed US consumer price inflation rose in line with estimates in August. Sensex and Nifty soon trimmed their opening gains and were trading flat with positive bias in early deals ahead of monthly F&O expiry later in the day. there was some cautiousness as India's industrial output growth eased slightly to 4% in August after a spike in July. Manufacturing output rose 3.8%, slowing from the 6 percent increase in the previous month. Traders were also concerned amid rising uncertainty over U.S. tariffs, particularly after U.S. President Donald Trump announced a 100 percent tariff on movies made outside the United States.

On the global front, Asian markets were trading mixed as industrial production in Japan was down a seasonally adjusted 1.2 percent on month in August, the Ministry of Economy, Trade and Industry (METI) said. Meanwhile, the METI said the value of retail sales in Japan was down a seasonally adjusted 1.1 percent on month in August - coming in at 12.683 trillion yen.

The BSE Sensex is currently trading at 80381.24, up by 16.30 points or 0.02% after trading in a range of 80374.63 and 80677.82. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.12%, while Small cap index was up by 0.21%.

Meanwhile, global rating Moody’s has affirmed India’s long-term local and foreign-currency issuer ratings and the local-currency senior unsecured rating at ‘Baa3’ with a ‘stable’ outlook on the back of robust economic growth and sound external position. It also affirmed India’s other short-term local-currency rating at P-3. It said ‘The rating affirmation and stable outlook reflect our view that India’s prevailing credit strengths, including its large, fast-growing economy, sound external position, and stable domestic financing base for ongoing fiscal deficits will be sustained’. It added these strengths lend resilience to adverse external trends, in particular as high US (Aa1 stable) tariffs and other international policy measures hinder India’s capacity to attract manufacturing investment.

It noted that India’s credit strength is balanced by long-standing weaknesses on the fiscal side, which will remain. Strong GDP growth and gradual fiscal consolidation will lead to only a very gradual decline in the government’s high debt burden, and will not be sufficient to materially improve weak debt affordability, especially as recent fiscal measures to reinforce private consumption erode the government’s revenue base. It further said India’s long-term local-currency (LC) bond ceiling remains unchanged at A2, and its long-term foreign-currency (FC) bond ceiling remains unchanged at A3. It added ‘The four-notch gap between the LC ceiling and issuer rating reflects modest external imbalances as represented by persistent, albeit narrow, current account deficits; a relatively large government footprint in the economy; and moderate predictability and reliability of government policies’.

The one-notch gap between the LC and FC ceiling reflects limited external indebtedness and the low likelihood of a debt moratorium, especially in the context of recent steps towards liberalisation of non-resident portfolio investment. It further said that India’s credit profile benefits from its strong growth potential, underpinned by a large domestic market and favourable demographics that have historically supported resilient, demand-driven expansion, and helped insulate the economy from external shocks. Even as real GDP growth moderated in the fiscal year ended March 2025 (fiscal 2024-25) to 6.5 per cent from 9.2 per cent in fiscal 2023-24, India has been and will remain the fastest growing G20 economy through at least the next two to three years.

It said ‘We project economic growth to be sustained at 6.5 per cent in fiscal 2025-26 as the government’s continued emphasis on capital expenditure, lower inflation and the consequent easing of monetary policy will support robust domestic consumption and investment’. The imposition of high tariffs by the US (currently at 50 per cent compared to 15-20 per cent tariff rates applied to other APAC countries) will have limited negative effects on India’s economic growth in the near term. However, it may constrain potential growth over the medium- to long-term by hindering India’s ambitions to develop a higher value-added export manufacturing sector.

The CNX Nifty is currently trading at 24649.85, up by 14.95 points or 0.06% after trading in a range of 24645.25 and 24731.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 1.25%, Hindalco up by 1.07%, Power Grid up by 1.07%, Asian Paints up by 0.99% and Adani Ports & SEZ up by 0.93%. On the flip side, Interglobe Aviation down by 1.44%, Larsen & Toubro down by 0.99%, ITC down by 0.79%, Axis Bank down by 0.45% and ONGC down by 0.37% were the top losers.

Asian markets are trading mixed; Taiwan Weighted jumped 288.21 points or 1.13% to 25,868.53, Nikkei 225 surged 30.25 points or 0.07% to 45,074.00, Shanghai Composite strengthened 15.6 points or 0.4% to 3,878.13 and Straits Times rose 14.71 points or 0.34% to 4,284.69. On the other hand, Hang Seng declined 29.88 points or 0.11% to 26,593.00, Jakarta Composite fell 22.12 points or 0.27% to 8,101.13 and KOSPI was down by 1.95 points or 0.06% to 3,429.26.