Sensex, Nifty trade flat in volatile session

Indian equity benchmarks made slightly positive start on Tuesday, but soon turned volatile and are struggling for direction amid weakness in global markets. Domestic indices are trading flat in early deals as continued rise in crude oil prices overnight after Israel and Hezbollah traded strikes over the weekend dampened sentiments in the markets. Some cautiousness came as a report by SBI Research, released just days before the government is set to publish the official data, stated that the Indian economy is expected to grow at 7.0-7.1 per cent in the April-June period, the first quarter of 2024-25. This growth forecast comes with a downward bias. Traders were also concerned with a private report stating that the newly-announced Unified Pension Scheme (UPS) is expected to shoot up the fiscal deficit by 15 basis points (bps) to 5.1 per cent from the budgeted 4.9 per cent in the financial year 2025 (FY25). However, downside remained capped amid foreign fund inflows. The foreign institutional investors (FIIs) extended their buying as they bought equities worth Rs 483 crore on August 26. 

On the global front, Asian markets are trading mostly lower, following the mixed cues from Wall Street overnight, as traders book some profits and remain cautious ahead of a report on US consumer confidence in the month of August later in the day and more closely watched US inflation data later in the week. On the economic data front, the Bank of Japan said producer prices in Japan were up 2.8 percent on year in July. Back home, small finance banking stocks are in focus as Crisil Ratings said Small Finance Banks' (SFBs) loan growth will moderate to 25-27 per cent in FY25 against 28 per cent in FY24. In stock specific development, Medi Assist surged after the company's subsidiary Medi Assist Insurance TPA signed definitive documents for the 100 per cent acquisition of Paramount Health Services & Insurance TPA from Fairfax Asia and the Shah family.

The BSE Sensex is currently trading at 81726.07, up by 27.96 points or 0.03% after trading in a range of 81600.51 and 81815.74. There were 14 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.67%, IT up by 0.62%, Healthcare up by 0.62%, Basic Materials up by 0.47% and Power up by 0.45%, while Oil & Gas down by 0.28%, Bankex down by 0.20%, Auto down by 0.18%, Telecom down by 0.17% and Metal down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 1.22%, Larsen & Toubro up by 1.10%, Infosys up by 0.70%, Adani Ports & SEZ up by 0.54% and Sun Pharma up by 0.51%. On the flip side, JSW Steel down by 0.97%, Kotak Mahindra Bank down by 0.84%, Bajaj Finserv down by 0.55%, Mahindra & Mahindra down by 0.49% and Bharti Airtel down by 0.48% were the top losers.

Meanwhile, just days before the government is set to publish the India’s official Gross Domestic Product (GDP) data, a report by SBI Research said that the Indian economy is likely to grow at 7.0-7.1 per cent in the April-June period, the first quarter (Q1) of 2024-25. However, this growth forecast comes with a downward bias. The first quarter GDP data is scheduled for release on August 30. According to official data, India’s GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.

SBI Research, in its latest Ecowrap report authored by Group Chief Economic Adviser Soumya Kanti Ghosh, noted that the Indian economy remained resilient despite challenges from supply chain pressures, including rising global freight and container costs, and semiconductor shortages. On a positive note, the southwest monsoon picked up from early July, reducing the deficit. As of August 25, 2024, cumulative rainfall was 5 per cent above the long-period average, compared to 7 per cent below the LPA during the same period last year. As a result, as of August 20, 2024, the total kharif sown area stood at 103.1 million hectares (94 per cent of the full-season normal area), which is 2.0 per cent higher than the corresponding period last year.

On the global economy, the SBI report stated that the economic growth outlook remains uncertain, but the softening of inflation has created room for monetary policy easing. At the closely watched Jackson Hole annual symposium, US Federal Reserve Chair Jerome Powell expressed further confidence in imminent policy easing. Powell indicated that it might be time for the US central bank to reduce interest rates as inflation is aligning with the target. Addressing the much-anticipated Jackson Hole Symposium on August 23, Powell stated ‘the time has come for policy to adjust’, but stopped short of hinting at the extent of the interest rate cut.

The CNX Nifty is currently trading at 24995.90, down by 14.70 points or 0.06% after trading in a range of 24973.65 and 25037.70. There were 19 stocks advancing against 30 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were HCL Technologies up by 1.20%, Larsen & Toubro up by 1.05%, Cipla up by 0.99%, Apollo Hospital up by 0.78% and Titan Company up by 0.65%. On the flip side, BPCL down by 1.78%, Shriram Finance down by 1.21%, JSW Steel down by 1.14%, Kotak Mahindra Bank down by 0.83% and Mahindra & Mahindra down by 0.55% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 131.74 points or 0.6% to 22,108.38, Hang Seng declined 48.41 points or 0.27% to 17,750.32, Jakarta Composite fell 38.93 points or 0.51% to 7,567.27, KOSPI dropped 10.53 points or 0.39% to 2,687.48, Shanghai Composite weakened 10.15 points or 0.36% to 2,845.37 and Straits Times was down by 9.98 points or 0.29% to 3,386.05, while Nikkei 225 was up by 63.52 points or 0.17% to 38,173.74.