Sensex, Nifty trade flat in early deals as investors eye US inflation data

Indian equity benchmarks made flat-to-positive start on Wednesday but are struggling for direction, amid weakness on Wall Street overnight as well as mixed cues from Asian counterparts. Sensex and Nifty are trading flat in early deals as traders await key U.S. consumer price inflation readings later in the day that could influence the US Fed's rate trajectory. Persisting geopolitical tension due to escalating violence in Syria is weighing on market sentiment. However, downside remained capped as S&P Global Ratings in its latest India Outlook said the Indian economy is set for resilient growth in 2025 on the back of strong urban consumption, steady services sector growth, and ongoing investment in infrastructure. The global ratings agency kept the FY25 gross domestic product (GDP) growth outlook unchanged at 6.8 per cent amid slower fiscal impulse tempering urban demand. 

On the sectoral front, auto stocks are in focus after Union Minister Nitin Gadkari exuded confidence that India's automobile industry will rise to the number one position globally in the next five years and outlined his ministry's ambitious target to also reduce the logistics costs in India to 9 per cent over two years. In stock specific development, NTPC Green Energy rallied after bagging a 500 MW solar project order from Solar Energy Corporation of India (SECI).

The BSE Sensex is currently trading at 81494.63, down by 15.42 points or 0.02% after trading in a range of 81466.93 and 81595.99. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.11%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.69%, Auto up by 0.56%, Metal up by 0.50%, Oil & Gas up by 0.41% and FMCG up by 0.39%, while Bankex down by 0.25%, IT down by 0.15%, TECK down by 0.14%, Telecom down by 0.08% and Consumer Durables down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.03%, Nestle up by 1.36%, Mahindra & Mahindra up by 0.83%, Sun Pharma up by 0.71% and Asian Paints up by 0.67%. On the flip side, HCL Technologies down by 0.87%, ICICI Bank down by 0.51%, Tech Mahindra down by 0.48%, Bajaj Finance down by 0.45% and TCS down by 0.38% were the top losers.

Meanwhile, S&P Global Ratings in its India outlook for 2025 has said the Indian economy is set for ‘resilient growth’ in 2025 and projected inflation pressure to recede which will lead to ‘modest’ easing of the monetary policy by the RBI. S&P also retained India's growth forecast for current fiscal at 6.8 per cent, followed by 6.9 per cent growth in 2025-26. It said ‘The Indian economy is set for resilient growth in 2025 on the back of strong urban consumption, steady service sector growth and ongoing investment in infrastructure’.

The agency said ‘we expect the central bank to ease monetary policy modestly during 2025 as inflationary pressures recede’. Last week, RBI retained benchmark interest rates at 6.5 per cent to control inflation but cut the cash reserve ratio (CRR) by 50 basis points to infuse liquidity into the system. India's economy grew 8.2 per cent in 2023-24. It said the GDP growth print for fiscal Q2 (June-September 2024) was weaker than expected at 5.4 per cent.

It said the fiscal impulse was slower, and pockets of weakness such as the urban middle class held back. Manufacturing growth which puts some downside risk to its forecast of 6.8 per cent growth for fiscal 2025. There are various challenges for the economy, including post-pandemic weakness in the public sector and household balance sheets, a highly competitive global manufacturing environment and weak agriculture sector growth. It noted creating enough jobs for India's higher labour force participation, further infrastructure and technology improvement, and stronger public and household balance sheets can support economic growth.

The CNX Nifty is currently trading at 24617.55, up by 7.50 points or 0.03% after trading in a range of 24597.60 and 24649.00. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.08%, Britannia Industries up by 1.61%, Tata Consumer Products up by 1.58%, Nestle up by 1.29% and Grasim Industries up by 1.10%. On the flip side, HCL Tech. down by 1.00%, Wipro down by 0.65%, Tech Mahindra down by 0.58%, Dr. Reddy's Lab down by 0.51% and ICICI Bank down by 0.48% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 134.52 points or 0.34% to 39,233.06, Taiwan Weighted lost 103.56 points or 0.45% to 23,021.52, Straits Times fell 19.19 points or 0.5% to 3,794.36 and Hang Seng declined 0.94 points or 0% to 20,310.34. On the other hand, Jakarta Composite gained 49.78 points or 0.67% to 7,503.07, KOSPI increased 18.08 points or 0.75% to 2,435.92 and Shanghai Composite was up by 7.59 points or 0.22% to 3,430.25.