Indices witness some correction in early noon deals

Indian equity benchmarks witnessed some correction in early afternoon session, however trade remained in green with both Sensex and Nifty holding notable gains, despite mixed cues from other Asian markets. Sentiments remained positive, as the commerce ministry's arm DGFT has clarified that registration-cum-membership certificate is not mandatory for exporters to seek benefits under schemes like duty drawback and remission of state levies. Besides, the government notified rules easing the export of 36 items including software and technology from an Indian parent company to its foreign subsidiary in 41 countries, under a policy for dual-use products.

On the global front, Asian markets were trading mixed, as a measure of the public assessment of the current situation of the Japanese economy worsened in September, while future conditions turned pessimistic. The survey data from the Cabinet Office showed that the current conditions index of the Economy Watchers' Survey, which measures the present situation of the economy, dropped to 47.8 in September from 49.0 in August. 

The BSE Sensex is currently trading at 82009.27, up by 374.46 points or 0.46% after trading in a range of 81692.46 and 82319.21. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 1.33%, while Small cap index was up by 1.51%.

The top gaining sectoral indices on the BSE were Realty up by 1.90%, Power up by 1.85%, Healthcare up by 1.72%, Industrials up by 1.52% and Consumer discretionary up by 1.51%, while FMCG down by 0.35%, Oil & Gas down by 0.16% and Energy down by 0.10% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.57%, Bharti Airtel up by 2.32%, Bajaj Finance up by 2.19%, SBI up by 2.17% and Axis Bank up by 1.58%. On the flip side, Nestle down by 1.99%, ITC down by 1.13%, HDFC Bank down by 0.77%, Hindustan Unilever down by 0.72% and Reliance Industries down by 0.61% were the top losers.

Meanwhile, the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for a tenth time in row. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to change the monetary policy stance to ‘neutral’ and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

On the inflation front, the MPC highlighted that headline inflation declined sharply to 3.6 and 3.7 per cent in July and August respectively from 5.1 per cent in June. Going forward, the September inflation print may see a significant pick-up as base effects turn adverse and food prices register an upturn. Food inflation, however, is expected to ease by Q4:2024-25 on better kharif arrivals and rising prospects of a good rabi season. CPI inflation for 2024-25 is projected at 4.5 per cent with Q2 at 4.1 per cent; Q3 at 4.8 per cent; and Q4 at 4.2 per cent. CPI inflation for Q1:2025-26 is projected at 4.3 per cent.

On the economic growth front, in India, real gross domestic product (GDP) registered a growth of 6.7 per cent in Q1:2024-25, driven by private consumption and investment. Looking ahead, the agriculture sector is expected to perform well on the back of above normal rainfall and robust reservoir levels, while manufacturing and services activities remain steady. On the demand side, healthy kharif sowing, coupled with sustained momentum in consumer spending in the festival season, augur well for private consumption. Consumer and business confidence have improved. Real GDP growth for 2024-25 is projected at 7.2 per cent with Q2 at 7.0 per cent; Q3 at 7.4 per cent; and Q4 at 7.4 per cent. Real GDP growth for Q1:2025-26 is projected at 7.3 per cent.

The CNX Nifty is currently trading at 25150.65, up by 137.50 points or 0.55% after trading in a range of 25031.35 and 25234.05. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 3.30%, Trent up by 2.60%, Tata Motors up by 2.53%, Bharti Airtel up by 2.49% and Bajaj Finance up by 2.35%. On the flip side, Nestle down by 1.99%, ONGC down by 1.40%, Britannia down by 1.10%, ITC down by 1.06% and Hindustan Unilever down by 0.74% were the top losers.

Asian markets were trading mixed; Hang Seng declined 167.14 points or 0.81% to 20,759.65, Jakarta Composite plunged 41.16 points or 0.55% to 7,515.98 and Shanghai Composite weakened 195.55 points or 5.94% to 3,294.23, while Straits Times rose 20.14 points or 0.56% to 3,595.83, Nikkei 225 surged 340.42 points or 0.87% to 39,277.96 and Taiwan Weighted added 47.69 points or 0.21% to 22,659.08.