Markets trade flat amid mixed global cues, record low retail inflation

Indian equity benchmarks started Thursday’s trading session in green but soon turned volatile amid mixed global cues. At this point of trade, Sensex and Nifty were trading flat and struggling for direction even as India’s retail inflation eased to a record low of 0.25% in October. Some cautiousness came amid foreign fund outflows. Foreign Institutional Investors turned net sellers and sold Indian equities worth Rs 1,750.03 crore net on Wednesday. Traders overlooked reports that the government approved two schemes worth Rs 45,000 crore to help exporters tide over the impact of high tariffs imposed by the US on Indian shipments. Meanwhile, External Affairs Minister S Jaishankar held talks with his American counterpart Marco Rubio that largely focused on issues relating to trade and supply chains.

On the global front, Asian markets were trading mixed, following the mixed cues from Wall Street overnight, as traders remain cautious ahead of the release of a barrage of US economic data after the US House of Representatives voted on a bill to end the longest government shutdown in U.S. history. The end to the impasse would enable the US Fed to gauge the economy precisely well ahead of its December meeting. Besides, producer prices in Japan were up 2.7% on year in October. 

The BSE Sensex is currently trading at 84468.42, up by 1.91 points after trading in a range of 84253.05 and 84545.29. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.11%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Metal up by 1.41%, Realty up by 1.13%, Consumer Durables up by 0.81%, Basic Materials up by 0.62% and Telecom up by 0.41%, while IT down by 0.52%, FMCG down by 0.28%, Oil & Gas down by 0.21%, TECK down by 0.20% and Energy down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 3.11%, Tata Steel up by 1.90%, Bajaj Finserv up by 1.18%, ICICI Bank up by 1.11% and Bharti Airtel up by 0.67%. On the flip side, TMCV down by 1.77% Infosys down by 0.95%, Eternal down by 0.89%, Tech Mahindra down by 0.65% and Kotak Mahindra Bank down by 0.63% were the top losers.

Meanwhile, with an aim to help exporters tide over the impact of high tariffs imposed by the US on Indian shipments, the government has approved two schemes worth Rs 45,000 crore. The Rs 25,060-crore Export Promotion Mission (EPM) seeks to strengthen India's export competitiveness, particularly for MSMEs, first-time exporters, and labour-intensive sectors. The second scheme -- Credit Guarantee Scheme for Exporters (CGSE) -- will ensure up to Rs 20,000 crore collateral-free credit support to exporters. The decisions came in the back drop of President Donald Trump administration imposing a hefty 50 per cent tariff on Indian goods effective from August 27. India and the US are also negotiating a bilateral trade agreement.

The EPM will be implemented over six years through two sub-schemes - Niryat Protsahan (Rs 10,401 crore) and Niryat Disha (Rs 14,659 crore). It is a very comprehensive mission and it will support the complete export ecosystem. Under the mission, priority support will be extended to sectors impacted by recent global tariff escalations, such as textiles, leather, gems and jewellery, engineering goods, and marine products. These sectors are facing challenges in the US market. Due to the high import duties, India's merchandise exports to the US declined by 11.93 per cent to $5.46 billion in September.

Under Niryat Protsahan, focus will be given to improve access to affordable trade finance for MSMEs through a range of instruments such as interest subvention, export factoring, collateral guarantees, credit cards for e-commerce exporters, and credit enhancement support for diversification into new markets. However, the government did not disclose the rate of subvention. Similarly under the Niryat Disha, the funds will be used for non-financial enablers such as assistance for international branding, packaging, and participation in trade fairs, export warehousing and logistics, inland transport reimbursements, and trade intelligence and capacity-building initiatives.

The CGSE for providing 100 per cent credit guarantee will be implemented by the finance ministry through National Credit Guarantee Trustee Company (NCGTC) to provide additional credit support by lending institutions to the exporters including MSMEs. A management Committee formed under the chairmanship of Secretary, Department of Financial Services (DFS), will oversee the progress and implementation of the scheme. The government said the CGSE Scheme is expected to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets. Enabling collateral-free credit access under CGSE will strengthen liquidity, ensure smooth business operations, reinforce India's progress towards achieving the $1 trillion export target.

The CNX Nifty is currently trading at 25857.00, down by 18.80 points or 0.07% after trading in a range of 25808.40 and 25906.80. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 3.14%, Tata Steel up by 1.90%, Hindalco up by 1.47%, Bajaj Finserv up by 1.22% and ICICI Bank up by 1.18%. On the flip side, TMCV down by 2.41%, ONGC down by 1.85%, Infosys down by 1.13%, Eternal down by 0.87% and Tata Consumer Products down by 0.80% were the top losers.

Asian markets are trading mixed; Hang Seng declined 134.73 points or 0.5% to 26,788.00, Taiwan Weighted lost 27.24 points or 0.1% to 27,919.85, Straits Times fell 4.94 points or 0.11% to 4,563.97 and KOSPI dropped 1.57 points or 0.04% to 4,148.82. On the other hand, Nikkei 225 surged 128.69 points or 0.25% to 51,192.00, Shanghai Composite strengthened 17.8 points or 0.44% to 4,017.94 and Jakarta Composite was up by 16.1 points or 0.19% to 8,404.67.