Markets fail to hold opening gains; trade flat in early deals

Indian equity benchmarks made optimistic start on Tuesday tracking strengthening sentiment in global markets that were focused on the upcoming Federal Reserve policy rate meeting scheduled for next week. But, markets failed to hold their gains and hovering around neutral lines in early deals as traders opted to book some profit after sharp gains in the previous session. Traders took note of Union Minister of State for Ministry of Commerce and Industry Jitin Prasada’s statement that India is revising FTAs with South Korea, Malaysia and various other ASEAN countries to benefit the domestic industries. He also emphasised the importance of boosting exports, reducing import dependence and ensuring growth. Meanwhile, Atsushi Mimura, Vice Minister of Finance for International Affairs, Japan, and Ajay Seth, Secretary, Department of Economic Affairs, Ministry of Finance, held the 2nd India-Japan Finance Dialogue in Tokyo and agreed to continue discussions aimed at further promoting financial cooperation and strengthening bilateral relations. 

On the global front, most of the Asian markets are trading higher, following the broadly positive cues from global markets overnight, as traders looked to pick up stocks at reduced levels following the steep drop seen last week while they await key inflation data from the U.S. that could impact the outlook for rates. Concerns over China's growth outlook kept upside in check, after data showed the country's consumer inflation accelerated in August to the fastest pace in half a year but domestic demand remained fragile, and producer price deflation worsened.

Back home, insurance company stocks are in focus as GST Council headed by Union Finance Minister Nirmala Sitharaman decided to set up a Group of Ministers (GoM) on reducing tax rate on life and health insurance. Besides, new business premiums (NBP) of life insurance companies grew 21.8 per cent year-on-year (Y-o-Y) to Rs 32,644.09 crore in August, aided by robust growth by the state-owned Life Insurance Corporation (LIC). In stock specific development, Dixon Technologies traded higher as it partners with HP to make its laptops in India.

The BSE Sensex is currently trading at 81559.04, down by 0.50 points after trading in a range of 81557.87 and 81801.22. 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 0.66%, while Small cap index was up by 1.13%.

The top gaining sectoral indices on the BSE were Telecom up by 1.63%, Healthcare up by 0.94%, Industrials up by 0.93%, Power up by 0.91% and Capital Goods up by 0.81%, while Metal down by 0.28%, Bankex down by 0.16% and Oil & Gas down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.80%, Axis Bank up by 1.46%, Power Grid up by 1.05%, Nestle up by 0.97% and Infosys up by 0.43%. On the flip side, Bajaj Finserv down by 1.45%, Bajaj Finance down by 1.14%, Mahindra & Mahindra down by 0.67%, Kotak Mahindra Bank down by 0.49% and SBI down by 0.43% were the top losers.

Meanwhile, Union Minister of State for Ministry of Commerce and Industry Jitin Prasada has said that India is revising free trade agreements (FTAs) with South Korea, Malaysia and various other Asian countries to benefit the domestic industries.

He noted that the FTAs with the UK and the European Union are being spearheaded by Prime Minister Narendra Modi. He added ‘It will play a great role for the auto components industry’. He further said ‘We are also revising and reworking our FTAs with Korea, with Malaysia, with Asian countries, which will be fine-tuned to the demands of our industry’.

Prasada also urged the auto components industry to increase investment in R&D activities. He noted ‘We are not investing enough in R&D, I believe this is 1 per cent of the revenue that is being invested so this is very crucial’. He also emphasised the importance of boosting exports, reducing import dependence and ensuring growth.

The CNX Nifty is currently trading at 24937.10, up by 0.70 points after trading in a range of 24931.95 and 25014.80. There were 25 stocks advancing against 24 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Divi's Lab up by 2.52%, Bharti Airtel up by 1.57%, Axis Bank up by 1.25%, Tata Consumer Products up by 1.04% and Power Grid up by 1.00%. On the flip side, SBI Life Insurance down by 2.40%, HDFC Life Insurance down by 2.23%, Bajaj Finserv down by 1.69%, Shriram Finance down by 1.27% and Bajaj Finance down by 1.11% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 47.71 points or 0.28% to 17,244.67, Nikkei 225 surged 47.54 points or 0.13% to 36,263.29, Jakarta Composite gained 34.89 points or 0.45% to 7,737.63, Straits Times rose 13.35 points or 0.38% to 3,509.88, Taiwan Weighted added 0.79 points or 0% to 21,145.23. On the other hand, Shanghai Composite weakened 14.48 points or 0.53% to 2,722.01 and KOSPI was down by 5.26 points or 0.21% to 2,530.67.