Sensex, Nifty trade tad lower in early deals amid volatility

Indian equity benchmarks made negative start on Monday following mixed cues from Asian counterparts pulled down by a tumbling South Korean market amid the ongoing political turmoil in the country as well as the ongoing tensions in the Middle East and the Russia - Ukraine war. Sensex and Nifty soon turned volatile and are trading tad lower in early deals amid foreign fund outflows. Foreign institutional investors (FIIs) offloaded equities worth Rs 1,830 crore on December 6. Some cautiousness came as industry body CII has suggested the government to stick to the fiscal deficit target of 4.9 per cent of GDP for 2024-25 and 4.5 per cent for 2025-26, cautioning that overly aggressive targets beyond these could adversely affect India's economic growth. 

However, downside remained capped as Union Education Minister Dharmendra Pradhan asserted that India will become a $30 trillion-economy by 2047. Pradhan said that India, the fastest-growing global economy, is currently in the fifth position and will bag the third spot in the next three years. Besides, the RBI said India’s forex reserves increased by $1.51 billion to $658.091 billion for the week ended November 29. The overall reserves had dropped by $1.31 billion to $656.582 billion in the previous reporting week. 

On the sectoral front, metal stocks are in focus as International Copper Association India MD Mayur Karmarkar said India’s copper demand is expected to clock a 10-13 per cent growth in the second-half of the current financial year amid constrained by supply-side issues. In stock specific development, Paytm gained on plans to sell its stake in PayPay to SoftBank for Rs 2,364 crore.

The BSE Sensex is currently trading at 81664.31, down by 44.81 points or 0.05% after trading in a range of 81479.88 and 81781.72. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.33%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.11%, Industrials up by 0.92%, Realty up by 0.72%, PSU up by 0.50% and Telecom up by 0.47%, while FMCG down by 1.76%, Healthcare down by 0.51%, Auto down by 0.32%, Metal down by 0.27% and Basic Materials down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.95%, Kotak Mahindra Bank up by 0.83%, Tech Mahindra up by 0.72%, HDFC Bank up by 0.44% and TCS up by 0.42%. On the flip side, Hindustan Unilever down by 3.77%, Nestle down by 1.60%, Mahindra & Mahindra down by 1.00%, Axis Bank down by 0.89% and Indusind Bank down by 0.87% were the top losers.

Meanwhile, after the Reserve Bank of India sharply slashed its growth projection to 6.6 per cent for the current fiscal from 7.2 per cent earlier, Finance Minister Nirmala Sitharaman has said that the Gross Domestic Product (GDP) slowdown in September quarter (Q2) was not ‘systemic’ and the economic activity in third quarter (Q3), with better public expenditure, is likely to compensate for the moderation. India recorded a 7-quarter low GDP growth of 5.4 per cent in July-September FY25. In the first quarter, the growth was 6.7 per cent. She added so, growth number is something which is not necessarily going to get badly affected. She also said ‘We need to push up on many other factors’, and added India would continue to be the fastest-growing economy next year and thereafter.

Growth momentum was low in the first quarter due to general election and reduction in capital expenditure. This has had a bearing on the second quarter as well. In the first half, the government spent only 37.3 per cent of its capital expenditure target of Rs 11.11 lakh crore for FY25. Sitharaman said other factors affecting growth include plateauing global demand that affected export growth. She also said ‘Purchasing power of Indians is improving, but within India, you also have concerns of wages saturating. We are quite seized of these factors which might have a play on India's own consumption’. The finance ministry, in its Economic Survey for FY24, had estimated a GDP growth of 6.5-7 per cent for the current fiscal year.

She further said ‘We have a Prime Minister who looks at opportunities in each of the challenges. During Covid-19, the challenge was seen as an opportunity for bringing in reforms. Five mini budgets were presented at that time, each of them giving relief, support and handholding on one hand and on the other making sure that small and overlooked pending reforms were taken’. She added being the voice of the Global South for some time now, India will carry forward its role that everyone saw during India's G20 Presidency. Every time Prime Minister Narendra Modi takes up an issue of global importance, he does consult the Global South and takes their concerns forward.

The CNX Nifty is currently trading at 24645.75, down by 32.05 points or 0.13% after trading in a range of 24621.85 and 24705.00. There were 17 stocks advancing against 31 stocks declining, while 2 stock remained unchanged on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.01%, SBI Life Insurance up by 0.89%, Kotak Mahindra Bank up by 0.79%, Tech Mahindra up by 0.72% and Wipro up by 0.64%. On the flip side, Hindustan Unilever down by 3.74%, Tata Consumer Products down by 2.86%, Britannia Industries down by 2.18%, Nestle down by 1.76% and Asian Paints down by 0.88% were the top losers.

Asian markets are trading mixed; Hang Seng declined 112.59 points or 0.57% to 19,753.26, KOSPI dropped 55.94 points or 2.36% to 2,372.22, Shanghai Composite weakened 13.46 points or 0.4% to 3,390.62 and Straits Times fell 4.24 points or 0.11% to 3,791.92. On the other hand, Nikkei 225 surged 62.95 points or 0.16% to 39,154.12, Taiwan Weighted added 47.47 points or 0.2% to 23,240.74 and Jakarta Composite was up by 24.07 points or 0.32% to 7,406.86.