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Oscillating between minor gains and losses, Indian equity benchmarks once again closed flat but with marginal gains on Thursday as weekly index futures and options contracts expired. Markets started the session slightly in red tracking negative cues from global markets. Traders remained cautious with a report by India Ratings and Research stating that India Inc resorted to salary cuts to protect their profits in the June quarter, as revenues came under pressure due to the second pandemic wave that affected nearly the entire country. It added the weak wage growth will prove to be a drag on the overall economic recovery in the medium term as it will affect household consumption. Sentiments remained in lackluster mood amid reports that with goods and services tax (GST) officers under pressure to exceed the Rs 1-trillion collection mark per month, industry has faced a barrage of recovery notices and summons issued over the last one month across sectors. Industry bodies have claimed harassment by field officers, blocking of input tax credit, cancellation of GST registration, threats of arrest and steep penalties, impacting their working capital and operations. Traders took note of report that Mumbai has recorded 530 new cases of Covid-19: the highest since mid-July.

However, last minute buying helped benchmark indices eke out gains and close mildly higher. Traders found some solace as S&P Global Ratings said India is expected to post strong economic growth in the coming quarters, even as inflation, led by food prices, is likely to remain elevated. It said the economy is expected to clock 9.5 per cent growth in the current fiscal year, followed by 7 per cent expansion in the next year. Some support also came with private survey stating that India Inc's business sentiments are drawing closer to pre-pandemic levels, hinting at a more robust performance in the next quarter. A survey, with over 3,700 respondents across digital platforms, found that transparent taxation has been one of the most significant initiatives of the government followed by the production-linked incentives (PLI) scheme, equalisation levy and new labour codes.

On the global front, Asian markets settled on a mixed note on Thursday on growth worries as the Federal Reserve's Beige Book showed a 'downshift' in the U.S. economy last month and the Japanese government said it plans to extend Covid-19 emergency restrictions in Tokyo and other regions. European markets were trading lower, as investors await the outcome of a European Central Bank (ECB) meeting later in the day, which is expected to keep discussion over stimulus against the backdrop of rising global inflation. Back home, on the sectoral front, auto stocks were in focus as India Ratings Research (Ind-Ra) said in its latest auto outlook stated that auto volumes are expected to rise 12-16 per cent year-on-year this fiscal, as against the earlier estimate of 16-20 per cent. It said the growth estimate has been revised downward on account of a revision in the growth forecasts for two-wheelers (2Ws) and passenger vehicles (PVs).

Finally, the BSE Sensex rose 54.81 points or 0.09% to 58,305.07 and the CNX Nifty was up by 15.75 points or 0.09% to 17,369.25.  

The BSE Sensex touched high and low of 58,334.59 and 58,084.99, respectively and there were 17 stocks advancing against 13 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were Telecom up by 2.40%, Power up by 1.63%, Utilities up by 1.18%, Capital Goods up by 0.96% and Metal up by 0.95%, while Realty down by 0.57%, Consumer Durables down by 0.34%, Bankex down by 0.25%, Healthcare down by 0.08% and Energy down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.77%, Nestle up by 2.39%, Tata Steel up by 1.23%, Bajaj Finserv up by 1.08% and HCL Technologies up by 0.79%. On the flip side, Titan Company down by 0.97%, Ultratech Cement down by 0.79%, Bajaj Auto down by 0.70%, HDFC Bank down by 0.60% and Axis Bank down by 0.59% were the top losers.

Meanwhile, S&P Global Ratings in its latest report has said that India is expected to post strong economic growth in the coming quarters, even as inflation, led by food prices, is likely to remain elevated. It noted that the economy is expected to clock 9.5 percent growth in the current fiscal year (FY22), followed by 7 percent expansion in the next year, and added that high nominal GDP growth would be important for ensuring fiscal consolidation going forward.

According to the report, given India's weak fiscal settings and a high stock of debt around 90 percent of GDP, the nominal GDP growth is going to be very important to prevent any further erosion of fiscal settings in the country and to enable some degree of fiscal consolidation going forward. It said the fiscal deficit would remain elevated over the next two years but the debt/GDP ratio is expected to stabilize or flatten out.

It further said India's external position has strengthened in the context of the pandemic and India has been generating forex reserves at a record pace. It also said the second wave of the pandemic has been pretty costly to economic activity. Households have been affected and households are going to be repairing their balance sheets and withholding from spending which means activity will remain below trend once the recovery gets underway.

The CNX Nifty traded in a range of 17,379.65 and 17,302.70 and there were 30 stocks advancing against 20 stocks declining on the index.    

The top gainers on Nifty were ONGC up by 2.69%, Bharti Airtel up by 2.64%, Nestle up by 2.57%, Hindalco up by 1.52% and Grasim Industries up by 1.22%. On the flip side, SBI Life Insurance down by 3.77%, HDFC Life Insurance down by 1.03%, Titan Company down by 1.02%, Ultratech Cement down by 0.79% and Bajaj Auto down by 0.69% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 83.39 points or 1.18% to 7,012.14, France’s CAC decreased 17.16 points or 0.26% to 6,651.73 and Germany’s DAX decreased 39.33 points or 0.25% to 15,570.95.

Asian markets settled on a mixed note on Thursday, tracking weakness in Wall Street indices overnight on worries about slowing US economic growth due to the fast-spreading Delta coronavirus variant. US businesses are experiencing escalating inflation that is being aggravated by a shortage of goods, the Federal Reserve said on Wednesday in its latest Beige Book. Japanese shares ended lower in line with global markets, while the Japanese government said it plans to extend Covid-19 emergency restrictions in Tokyo and other regions until the end of this month. Hong Kong shares declined on worries over Beijing’s fresh crackdown on gaming industry. However, Chinese shares advanced after data showed consumer prices in the country rose 0.8 percent year-on-year in August against expectations of an increase of 1 percent.

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