Markets trade marginally higher after muted start

Mumbai: Equity benchmark indices Sensex and Nifty were trading marginally higher in the morning trade on Tuesday after a weak beginning as investors stayed on the sidelines ahead of the formal announcement of a trade deal with the US.

Rally in Asian markets and fresh foreign fund inflows also helped markets recover the early lost ground, analysts said.

After a muted start, the 30-share BSE Sensex further declined 121.55 points to 83,320.95 in early trade. The 50-share NSE Nifty dipped 37.15 points to 25,424.15.

However, soon both the benchmark indices recovered the early lost ground and were trading marginally higher. The BSE benchmark quoted 86.13 points higher at 83,526.55, and the Nifty traded 19.75 points up at 25,481.05.

From the Sensex firms, Kotak Mahindra Bank, Eternal, Bharat Electronics Ltd, Tata Motors, NTPC, and Adani Ports were among the major gainers.

However, Titan, Mahindra & Mahindra, Sun Pharma, HCL Tech, and Trent were among the laggards.

The US is close to making a trade deal with India, President Donald Trump has said.

"Now, we've made a deal with the United Kingdom, we've made a deal with China… We're close to making a deal with India. Others we met with and we don't think we're going to be able to make a deal, so we just sent them a letter. If you want to play ball, this is what you have to pay," Trump said on Monday.

The remarks came as the Trump administration sent out the first tranche of "letters" to various countries on Monday detailing the tariffs that the US will impose on products from those countries entering America.

The countries that got these letters, signed by Trump, were Bangladesh, Bosnia and Herzegovina, Cambodia, Indonesia, Japan, Kazakhstan, Lao People's Democratic Republic, Malaysia, Serbia, South Africa, South Korea, Thailand, and Tunisia.

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng were trading in the positive territory.

"The announcement of unilateral tariffs on 14 countries and the exclusion of India from the list along with President Trump's remark that 'we are close to a deal with India' indicate that a trade deal between India and US will be announced soon.

"This has already been largely discounted by the market; the unknown areas are the details of possible sectoral tariffs on segments like pharmaceuticals. Market reaction will depend on these details," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

The US markets ended lower on Monday.

Global oil benchmark Brent crude dipped 0.36 per cent to USD 69.33 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 321.16 crore on Monday, according to exchange data. Domestic Institutional Investors (DIIs) also bought stocks worth Rs 1,853.39 crore.

After oscillating between highs and lows on Monday, the Sensex finally ended 9.61 points, or 0.01 per cent, up at 83,442.50. The Nifty ended unchanged at 25,461.30.