Sensex, Nifty trade higher with marginal gains in early deals

Indian equity benchmarks made optimistic start on Thursday, following the broadly positive cues from Wall Street overnight as well as mostly positive trend in Asian counterparts, as traders remain optimistic about more interest rate cuts by the US Fed, and several other central banks. The minutes from the US Fed's September meeting showed officials agreed to cut interest rates, but were unsure how aggressive to get. Traders now look ahead to the release of US consumer price and producer price inflation data for more clarity on how aggressively the Fed will lower rates in the coming months. Meanwhile, the Bank of Japan or BoJ said producer prices in Japan were unchanged in September. Taiwan market is closed for National Day holiday.

Closer home, Sensex and Nifty are trading higher with marginal gains in early deals as investors are eyeing for the second quarter results of IT bellweather TCS which kicks off the earnings season for India Inc. Market participants are expecting Q2 earnings growth of the company to be in low single digit. Some support came as the Reserve Bank of India’s (RBI) forward looking survey stated that consumer confidence improved in the September 2024 Survey round compared to the previous round in July due to better perceptions about the general economic, employment, and income conditions. 

On the sectoral front, defense-related stocks are in focus after the Cabinet Committee on Security cleared major deals worth Rs 80,000 with the U.S. which would see India boost its surveillance capabilities of its defense forces. In stock specific development, Ola Electric traded under pressure as the Ministry of Heavy Industries requested insights from the Automotive Research Association of India regarding Ola Electric's compliance with regulatory standards.

The BSE Sensex is currently trading at 81626.74, up by 159.64 points or 0.20% after trading in a range of 81597.21 and 81833.40. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.37%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.97%, PSU up by 0.88%, Realty up by 0.86%, Utilities up by 0.80% and Metal up by 0.78%, while Healthcare down by 0.41% was the sole losing index on BSE.

The top gainers on the Sensex were Power Grid up by 1.49%, Mahindra & Mahindra up by 1.35%, HCL Tech. up by 1.19%, Larsen & Toubro up by 1.15% and Axis Bank up by 1.01%. On the flip side, Infosys down by 0.62%, Bharti Airtel down by 0.59%, Sun Pharma down by 0.56%, Asian Paints down by 0.47% and Hindustan Unilever down by 0.46% were the top losers.

Meanwhile, expressing some cautiousness, Finance Minister Nirmala Sitharaman has said the Carbon Border Adjustment Mechanism or CBAM is unilateral and arbitrary and will hurt India’s exports after its implementation by the European Union. CBAM are tariffs that will apply on energy-intensive goods imported into the European Union (EU). The EU has decided to impose carbon tax CBAM from January 1, 2026, on seven carbon-intensive sectors, including steel, cement, and fertiliser. Engineering goods will come under the purview of this import duty. She said it is a border tax introduced by the EU, and such moves are going to create a trade barrier.

Against this, she said, India has voiced its concern several times to the EU, and the government is also looking at ways to reduce the cost of transactions. The decision by the EU may affect the profitability of Indian exporters, as Europe is among the top export destinations for the country. India’s total trade with the EU was $137.41 billion in 2023-24, with imports at $61.48 billion and exports at $75.93 billion. However, she said it was unlikely that India’s opposition to the CBAM would be a barrier to finalising the Free Trade Agreement (FTA) with the EU. She said ‘I am sure it won’t be escalated to the level of hurting the (FTA) talks’.

She further exuded the confidence that India would achieve net Zero by 2070. She said ‘we are on track to achieve 2030 carbon emission reduction goals’, and added that the Budget has allocated made huge allocation for battery storage. On India’s green initiatives, Sitharaman said Prime Minister Narendra Modi has led from the front in setting the agenda for the country, and the commitments given in the UN climate change conference COP 21 were fulfilled by India well ahead of time, with its own resources.

On the decarbonisation of India’s economy, she said the government has brought in the PLI (production-linked incentive) scheme for 13 sunrise sectors, which included green energy. She said ‘We also have PLI for automobiles and electric vehicles. So, budget has never been a constraint in promoting the green sectors’. About the ‘PM Surya Ghar Muft Bijli Yojana’, she said the scheme has been provided budgetary support and received an overwhelming response from the citizens. She added two million applications have come since its launch, and the target is 10 million.

The CNX Nifty is currently trading at 25013.75, up by 31.80 points or 0.13% after trading in a range of 25010.80 and 25083.50. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 1.41%, NTPC up by 1.28%, Mahindra & Mahindra up by 1.14%, Kotak Mahindra Bank up by 1.08% and Axis Bank up by 1.04%. On the flip side, Adani Enterprises down by 2.62%, Cipla down by 1.07%, Trent down by 1.01%, Shriram Finance down by 0.75% and Dr. Reddy's Lab down by 0.71% were the top losers.

Asian markets are trading mostly higher; Hang Seng jumped 832.13 points or 3.88% to 21,469.37, Shanghai Composite surged 96.15 points or 2.87% to 3,355.01 and Nikkei 225 rose 73.62 points or 0.19% to 39,351.58 and KOSPI increased 13.41 points or 0.51% to 2,607.77. On the other hand, Jakarta Composite plunged 8.73 points or 0.12% to 7,492.56 and Straits Times was down by 1.88 points or 0.05% to 3,593.78.