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In a highly volatile session, Indian equity benchmarks were managing to trade in green in late morning session, on the back of buying in FMCG and Consumer Durables stocks. Traders were getting relief, with a private report stating that a combination of normal rainfalls aiding bumper agriculture output and the Reserve Bank of India (RBI) further hiking interest rates to cut easy money in the system hold key to bringing down multi-year high inflation triggered by surging food and fuel prices.

Adding more comfort, the commerce and industry minister Piyush Goyal said that India has completely protected the interests of farmers and fishermen in the recently concluded ministerial conference of the World Trade Organisation (WTO) in Geneva. However, some concerns came with a report stating that as many as 428 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.98 lakh crore.

On the global front, Asian markets were trading mostly in red, after Malaysia's foreign trade surplus decreased in May, as imports grew faster than exports. The data from the statistical office showed that the trade surplus shrank to MYR 12.619 billion in May from MYR 13.754 billion in the corresponding month last year. In May, the surplus was MYR 23.48 billion. Street had forecast a surplus of MYR 19.9 billion.

The BSE Sensex is currently trading at 51425.66, up by 65.24 points or 0.13% after trading in a range of 51062.93 and 51614.11. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.19%, while Small cap index was down by 2.13%.

The only gaining sectoral indices on the BSE were FMCG up by 1.29% and Consumer Durables up by 0.15%, while Metal down by 4.82%, Basic Materials down by 2.53%, Energy down by 2.35%, Oil & Gas down by 2.31% and PSU down by 2.11% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.65%, HDFC up by 2.87%, Asian Paints up by 2.22%, HDFC Bank up by 1.96% and Nestle up by 1.57%. On the flip side, Tata Steel down by 5.16%, Indusind Bank down by 2.00%, Reliance Industries down by 1.77%, Larsen & Toubro down by 1.50% and Bharti Airtel down by 1.28% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) V Anantha Nageswaran has said that the government is committed to ensuring that capital expenditure (Capex) will continue to support the economic growth momentum regained after the third COVID-19 wave. The government has taken various steps -- including lowering taxes, the continuation of privatization, setting up institutions for sequestering bad loans and managing them, and launching an asset monetization drive -- to strengthen the real economy.

CEA said ‘given the ongoing sense of uncertainty among the private sector participants, both in banking and the non-banking world, the government is committed to making sure that capital expenditure continues (in) such (a way) that growth impulse that we have regained after the third wave is not surrendered.’ He stated that in the previous fiscal, while the capital expenditure was budgeted at Rs 6 lakh crore, the government managed to spend Rs 5.92 lakh crore and hence, for the current financial year, if the government is able to execute the capital expenditure of Rs 7.5 lakh crore, then that is the biggest real economic intervention.

Talking about what other measures should be initiated to help the real economy, Nageswaran said the government will keep its eyes and ears open to respond to whatever the situation arises but all the steps will be well measured. He said any intervention in the economy has a fiscal component to it, which in turn, will have an impact on interest rates, current account deficit and currency. He said the fact that the country is now very concerned about a 7 percent inflation rate is a good sign. He said ‘we are becoming inflation intolerant and that is important to stabilize inflation expectations going forward and bring us back to the range of 4-6 percent (RBI's inflation target) at the earliest possible opportunity as the global conditions permit. So, inflation intolerance is a good thing.’

The CNX Nifty is currently trading at 15298.85, up by 5.35 points or 0.03% after trading in a range of 15191.10 and 15363.10. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.73%, HDFC up by 2.92%, Asian Paints up by 2.34%, HDFC Bank up by 1.96% and Nestle up by 1.91%. On the flip side, Hindalco down by 5.57%, Tata Steel down by 5.11%, ONGC down by 4.49%, UPL down by 3.75% and Coal India down by 2.46% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 318.02 points or 1.22% to 25,644.98, Taiwan Weighted dropped 163.54 points or 1.05% to 15,477.72, KOSPI fell 61.43 points or 2.52% to 2,379.50 and Jakarta Composite lost 48.13 points or 0.69% to 6,888.84. On the flip side, Shanghai Composite gained 0.90 points or 0.03% to 3,317.69, Straits Times advanced 2.26 points or 0.07% to 3,100.35 and Hang Seng increased 34.16 points or 0.16% to 21,109.16.

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