Sensex, Nifty trade lower amid uncertainty around US-India trade pact

Indian equity benchmarks made flat-to-negative start on Monday and soon extended their losses despite broadly positive cues from Asian counterparts. Sensex and Nifty were trading lower with cut of around half a per cent each in early deals amid uncertainty around a US-India trade agreement. Foreign fund outflows also dented trading sentiments. Foreign institutional investors sold shares worth Rs 3,769.31 crore on Friday. Besides, the Reserve Bank of India (RBI) said that India's forex reserves dropped by $9.80 billion to $686.80 billion in the week to January 2. Investors remained on sidelines ahead of quarterly earnings updates from tech majors. Tata Consultancy Services and HCL Technologies are scheduled to announce their October-December quarter results later in the day. Market participants were also eyeing the retail inflation data to be out later in the day, for more directional cues. 

On the global front, Asian markets were trading higher, following the broadly positive cues from Wall Street on Friday, amid optimism about the outlook for interest rates after a report showed employment in the U.S. increased less than expected in December. The US Fed is still widely expected to leave interest rates unchanged at its next meeting later this month. Meanwhile, the Japanese stock market is closed for Coming of Age day.

The BSE Sensex is currently trading at 83185.67, down by 390.57 points or 0.47% after trading in a range of 83043.45 and 83617.53. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.10%, while Small cap index was down by 1.41%.

The top losing sectoral indices on the BSE were Healthcare down by 1.63%, Capital Goods down by 1.55%, Industrials down by 1.50%, Power down by 1.47% and Telecom down by 1.32%, while there was no gainer on the BSE sectoral front.

The top gainers on the Sensex were Hindustan Unilever up by 0.60%, Trent up by 0.54%, Asian Paints up by 0.48%, Axis Bank up by 0.24% and Tata Steel up by 0.17%. On the flip side, Adani Ports & SEZ down by 1.46%, Bharat Electronics down by 1.25%, Larsen & Toubro down by 1.25%, Power Grid down by 1.14% and Bharti Airtel down by 1.08% were the top losers.

Meanwhile, charting India’s path to inclusive growth, S Mahendra Dev, chairman of Economic Advisory Council to the Prime Minister (EAC-PM), has said that the country’s short-term goals include generating skilled jobs and improving employment quality. He admitted that the country was lagging in employment quality, which he asserted is one of the important components in achieving inclusive growth. He said ‘In the post COVID years, from 2022-23 to 2025-26, the average growth rate is 7.7 per cent and so we have recovered. India is resilient. We are pushing investments and exports despite all the constraints. The focus is on employment generation and skilled jobs. We are lagging behind in employment quality.’

He noted that 'Viksit Bharat 2047' does not just mean achieving growth but also inclusive growth. He highlighted that ‘Quality employment is one of the important components in achieving inclusive growth. We have issues in employment like gig workers, women's participation rates, creating employment for youth, technology including AI. Education, health, nutrition are also part of efforts in reducing inequalities. These are the areas where inclusion can be increased’.

About long-term goals, he said to achieve Viksit Bharat 2047 goal there are two drivers of growth, which include increasing investment rate and domestic savings, and promoting exports. He also pointed towards diversifying exports, GST, income tax reforms and labour codes, as well as quality control orders and inclusion of the private sector in nuclear power. He said many countries achieved structural transformation through manufacturing and services, and noted that India still requires strong manufacturing growth to generate labour-intensive employment. 

He rejected the notion of choosing between manufacturing and services, calling the two sectors complementary rather than competing. Emphasising manufacturing's strong backward and forward linkages, he said it also drives growth in services, as modern manufacturing increasingly incorporates service components such as AI. He said for sustained expansion of the service sector, a robust manufacturing base is required. He noted ‘what we want to achieve by 2047 is not unique. India has progressed on many fronts. The task is now to move towards a society and economy that is not only prosperous but also inclusive and pro-nature’.

The CNX Nifty is currently trading at 25557.60, down by 125.70 points or 0.49% after trading in a range of 25529.05 and 25700.95. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 1.30%, SBI Life Insurance up by 0.72%, Tata Consumer Products up by 0.70%, Trent up by 0.66% and Hindustan Unilever up by 0.65%. On the flip side, Max Healthcare down by 1.89%, Apollo Hospital down by 1.70%, JIO Financial Services down by 1.48%, Adani Ports & SEZ down by 1.44% and Bharat Electronics down by 1.22% were the top losers.

Asian markets were trading higher; Taiwan Weighted surged 361.44 points or 1.19% to 30,650.40, Hang Seng rose 247.21 points or 0.93% to 26,479.00, KOSPI increased 35.52 points or 0.77% to 4,621.84, Shanghai Composite strengthened 30.71 points or 0.75% to 4,151.14, Straits Times added 29.92 points or 0.63% to 4,774.58 and Jakarta Composite was up by 17.29 points or 0.19% to 8,954.04.