Sensex, Nifty trade flat in early deals; WPI data eyed

Indian equity benchmarks made cautious start on Tuesday amid positive global cues. Market participants eagerly await the Federal Reserve's policy decision this week slated on September 18. This is said to be the biggest event that would drive sentiments in the domestic stock market. Domestically, investors are eyeing the release of Wholesale Price Index (WPI) inflation and manufacturing data for August, along with import and export data for August. Sensex and Nifty are trading flat in early deals. Sentiments remained subdued amid foreign fund outflows and higher crude oil prices. As per NSE data, Foreign Institutional Investors (FII) were net sellers of Indian equities worth Rs 1,634.98 crore. Oil prices were trading higher as the ongoing impact of Hurricane Francine on output in the U.S. Gulf of Mexico offset persistent Chinese demand concerns ahead of this week's U.S. Federal Reserve interest rate cut decision. Some cautiousness also came in as Reserve Bank of India Governor Shaktikanta Das said the benchmark interest rate in the country will hinge on the future trajectory of inflation. 

On the global front, Asian markets are trading mostly higher in thin trade as a two-day policy meeting of the U.S. Federal Reserve gets underway later today, with investors increasingly pricing in a half-point cut to interest rates. The Bank of England (BoE) and the Bank of Japan (BOJ) also meet this week to discuss monetary policy, where both central banks are seen keeping rates on hold. Markets in mainland China and South Korea closed for Mid-Autumn Festival and Chuseok - Thanksgiving Day holiday, respectively. Back home, in stock specific development, Reliance Infrastructure climbed as it is considering raising long-term capital through equity shares, equity-linked securities, or other methods.

The BSE Sensex is currently trading at 82986.12, down by 2.66 points after trading in a range of 82878.20 and 83128.78. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.04%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were FMCG up by 0.39%, Bankex up by 0.19%, Oil & Gas up by 0.18%, Healthcare up by 0.18% and Energy up by 0.12%, while Realty down by 0.68%, Auto down by 0.56%, Consumer discretionary down by 0.26%, Metal down by 0.24% and Industrials down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 0.82%, ICICI Bank up by 0.50%, NTPC up by 0.47%, Nestle up by 0.42% and Kotak Mahindra Bank up by 0.28%. On the flip side, Tata Motors down by 2.05%, Maruti Suzuki down by 0.62%, Tata Steel down by 0.58%, Adani Ports & SEZ down by 0.55% and TCS down by 0.50% were the top losers.

Meanwhile, talking about when the central bank would start cutting the repo rate, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said the decision on interest rate moderation will be based on long-term inflation trajectory and not monthly data. The Monetary Policy Committee (MPC) headed by the RBI Governor is scheduled to meet between October 7 and 9 and take call on interest rate. The RBI kept the repo rate unchanged at 6.5 per cent for the ninth time in a row amid risks from higher food inflation. In the August meeting, four of six MPC members voted in favour of the status quo.

Das said the focus will be on the month-on-month momentum -- whether inflation is building up or moderating and the upcoming inflation trajectory will be carefully monitored with a forward-looking approach, and decisions will be made based on that assessment. He said ‘It is not a question that in the current context, like in July, the inflation came to about 3.6 per cent, that is the revised number, and August has come at 3.7 per cent. So, it is not so much how the inflation is now; we have to look at, for the next six months, for the next one year, what is the outlook on inflation. So, therefore, I would like to sort of step back and look more carefully at what is the future trajectory of inflation and growth, and based on that, we will take a decision’.

On whether the RBI's Monetary Policy Committee (MPC) will be actively considering a rate cut in early October, Das said ‘No, I can't say that’. He said ‘We will discuss and decide in the MPC but so far as growth and inflation dynamics are concerned, two things I would like to say. One, the growth momentum continues to be good, India's growth story is intact and, so far as inflation outlook is concerned, we have to look at the month-on-month momentum’, and added that based on that a decision will be taken. He further said the rupee has been one of the least volatile currencies globally, especially since the beginning of 2023. He said the rupee has been very stable vis-a-vis the US dollar and the volatility index. He remarked that the RBI is committed to maintaining financial stability and the bank will take steps to ensure this.

The CNX Nifty is currently trading at 25392.15, up by 8.40 points or 0.03% after trading in a range of 25356.85 and 25416.90. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 1.67%, Apollo Hospital up by 1.20%, LTIMindtree up by 1.00%, Divi's Lab up by 0.97% and Shriram Finance up by 0.61%. On the flip side, Tata Motors down by 2.04%, Eicher Motors down by 1.01%, HDFC Life Insurance down by 0.83%, Adani Ports & SEZ down by 0.81% and Maruti Suzuki down by 0.78% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 250.62 points or 1.42% to 17,672.74, Straits Times rose 20.26 points or 0.56% to 3,590.69 and Jakarta Composite gained 9.43 points or 0.12% to 7,821.56, while Nikkei 225 slipped 605.19 points or 1.68% to 35,976.57.