Benchmarks continue to trade flat in morning deals

Indian equity benchmarks continued to trade flat in morning deals, amid selling in Utilities, Realty and Auto counters. Traders remained on sidelines ahead of the India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data. Some concern came with a private report that India’s retail inflation, based on the Consumer Price Index, likely rose to 5.1% in September from 3.65% in August, primarily due to an unfavourable base effect. In September 2023, CPI inflation was at 5.02%. Besides, exchange data showed Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,926.61 crore on Thursday. On the sectoral front, stocks related to airline sector remained in watch as Credit rating agency ICRA’s report stated that the overall air cargo volumes likely to witness healthy growth of around 9-11% YoY to around 3.6-3.7 million tonnes in FY2025, supported by 11%-13% expansion in international and 4%-6% growth in domestic cargo. On the global front, Asian markets are trading mostly in green despite the broadly negative cues from Wall Street overnight, as data showing the bigger-than-expected increase in US consumer prices further offset optimism the US Fed will continue to aggressively lower interest rates in the coming months. 

The BSE Sensex is currently trading at 81589.85, down by 21.56 points or 0.03% after trading in a range of 81398.38 and 81671.38. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.36%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Metal up by 1.66%, Basic Materials up by 0.69%, Oil & Gas up by 0.60%, Healthcare up by 0.59% and Energy up by 0.57%, while Utilities down by 0.30%, Realty down by 0.28%, Auto down by 0.26%, Power down by 0.25% and FMCG down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.72%, JSW Steel up by 1.70%, Tech Mahindra up by 1.00%, Titan Company up by 0.92% and HCL Technologies up by 0.81%. On the flip side, TCS down by 1.10%, Mahindra & Mahindra down by 0.80%, Asian Paints down by 0.76%, ICICI Bank down by 0.66% and Bajaj Finserv down by 0.63% were the top losers.

Meanwhile, after the Reserve Bank of India projected more than 7 per cent of GDP growth for the entire financial year 2024-25, State Bank of India (SBI) in its report has said that histrorically a rate cut with such a high growth has rarely, if ever, occurred in India or globally. The report also noted that it raises an interesting question as to whether RBI is preparing the grounds for an ensuing rate cut harmonizing with current momentum in growth. The report raises the intriguing possibility that the RBI might be laying the groundwork for a rate cut, despite the strong momentum in economic growth.

It points out that such a move would be unprecedented, apart from a brief period in 2016 when a new Monetary Policy Committee (MPC) had taken over. It stated ‘This raises an interesting question as to whether RBI is preparing the grounds for an ensuing rate cut harmonizing with current momentum in growth.’ The scenario is particularly noteworthy because, in most countries, including India, rate cuts typically occur when economic growth is slowing down, not when it is accelerating.

It highlighted that, barring the case of the Philippines, countries that have implemented rate cuts generally did so when their GDP growth was lower than the average of the preceding four quarters. In contrast, India’s projected growth remains robust, making the possibility of a rate cut all the more unusual. Besides, the report suggested that the RBI may be strategically offering markets ample time to prepare for an eventual shift in monetary policy. With foresight, the central bank appears to be signaling that it is keeping a close watch on both growth and inflation dynamics, possibly hinting at future policy adjustments.

The CNX Nifty is currently trading at 25007.45, up by 9.00 points or 0.04% after trading in a range of 24934.35 and 25028.65. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.90%, Eicher Motors up by 1.78%, Tata Steel up by 1.60%, JSW Steel up by 1.60% and ONGC up by 1.23%. On the flip side, TCS down by 1.07%, Cipla down by 1.04%, Mahindra & Mahindra down by 0.97%, Bajaj Auto down by 0.73% and ICICI Bank down by 0.72% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 230.49 points or 0.59% to 39,611.38, Taiwan Weighted added 261.33 points or 1.15% to 22,920.41, KOSPI increased 4.78 points or 0.18% to 2,603.94, Straits Times rose 0.88 points or 0.02% to 3,586.17 and Jakarta Composite gained 44.34 points or 0.59% to 7,524.42.

On the flip side, Shanghai Composite weakened 52.72 points or 1.62% to 3,249.21.