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Sensex, Nifty trade flat in early deals; RBI policy outcome eyed
Feb-07-2025

Indian equity indices made slightly positive start on Friday and soon turned volatile amid mixed global cues. Sensex and Nifty are trading flat in early deals ahead of the Reserve Bank of India's (RBI's) Monetary Policy Committee's (MPC's) decision on interest rates after two days of discussions, along with commentary on the state of the economy and projections for GDP growth and inflation outlook. This will be the first MPC decision to be announced by the new central bank Governor, Sanjay Malhotra. There are expectations that the RBI may cut the benchmark repo rate by 25 basis points to 6.25 per cent. Foreign fund outflows also dented sentiments. Foreign Institutional Investors (FIIs) remained net sellers and offloaded shares worth Rs 3,550 crore on a net basis Thursday.

On the global front, Asian markets are trading mixed, following the mixed from Wall Street overnight, as traders seemed cautious and reluctant to make significant moves ahead of the release of the closely watched monthly US jobs report later in the day for cues on the outlook for interest rates. They also await U.S. President Donald Trump's next move on trade curbs ahead of China's tariff deadline next week.

Back home, banking stocks are in focus as the finance ministry said the performance of public sector banks (PSBs) indicates that they are adequately capitalised and well poised to meet the credit demands of all sectors of the economy, with a special thrust on agriculture, micro, small and medium enterprises (MSMEs), and the infrastructure sector. In stock specific development, Hero MotoCorp gained after rise in Q3 net profit.

The BSE Sensex is currently trading at 78032.58, down by 25.58 points or 0.03% after trading in a range of 77948.31 and 78356.98. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.28%, while Small cap index was down by 0.70%.

The gaining sectoral indices on the BSE were Telecom up by 2.27%, Metal up by 0.73%, TECK up by 0.30%, Consumer Durables up by 0.29% and Auto up by 0.20%, while Oil & Gas down by 1.51%, FMCG down by 1.29%, Energy down by 1.14%, PSU down by 0.84% and IT down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.47%, Tata Steel up by 1.51%, Ultratech Cement up by 1.41%, Zomato up by 1.20% and HDFC Bank up by 0.99%. On the flip side, Power Grid down by 2.19%, ITC down by 2.07%, SBI down by 1.30%, Hindustan Unilever down by 1.03% and TCS down by 1.00% were the top losers.

Meanwhile, emphasizing policy measures aimed at supporting businesses, startups, and encouraging voluntary tax compliance, Finance Secretary Tuhin Kanta Pandey has said that the Union Budget 2024-25 is absolutely non-inflationary. Pandey emphasized the government’s commitment to maintaining fiscal discipline while fostering economic growth. He highlighted the government’s long-term vision for India’s economic progress and the key policy measures designed to support businesses, startups, and voluntary tax compliance. Referring to the global economic challenges, he acknowledged that the current environment is not very encouraging for trade and growth.

He stated ‘There is not a very encouraging environment globally for growth and also for trade and at the same time, we have a very big vision, our vision to be Viksit Bharat by 2047. A lot has been done for startups, not only in terms of tax holiday that is provided and another five-year extension has been given for the period of incorporation, but also for the Rs 10,000 crore additional fund of funds.’ 

Besides, he talked about the government’s efforts to enhance voluntary tax compliance, noting that 99.7 per cent of tax returns are self-assessed, with scrutiny being limited to a mere 0.3 per cent. He mentioned ‘We promote voluntary compliance. We had 90 lakh, almost a crore new, updated returns. Rs 8000 to 9000 crore extra in taxes came voluntarily. There was a question, of course: why are we charging 70 per cent tax on updated returns. That’s not true. Let me update you. It is not 70 per cent of the total tax. It’s 70 per cent on additional tax.’

The CNX Nifty is currently trading at 23603.85, up by 0.50 points after trading in a range of 23566.85 and 23683.90. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.89%, Ultratech Cement up by 1.55%, Shriram Finance up by 1.42%, Tata Steel up by 1.40% and JSW Steel up by 1.32%. On the flip side, ONGC down by 3.03%, Power Grid down by 2.03%, ITC down by 1.98%, SBI down by 1.22% and Bharat Electronics down by 1.05% were the top losers.

Asian markets are trading mixed; Hang Seng surged 319.24 points or 1.53% to 21,210.86, Taiwan Weighted strengthened 113.56 points or 0.49% to 23,430.16, Shanghai Composite advanced 43.63 points or 1.32% to 3,314.29 and Straits Times was up by 16.49 points or 0.43% to 3,846.91. On the other hand, Nikkei 225 slipped 230.93 points or 0.59% to 38,835.60, Jakarta Composite fell 144.67 points or 2.1% to 6,730.87 and KOSPI was down by 11.37 points or 0.45% to 2,525.38.
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