Sensex, Nifty remain in green terrain

Indian equity benchmarks remained in green terrain during late morning session, with both Sensex and Nifty trading higher with notable gains. But, key indices cut some of their gains as negative cues from other Asian markets impacted domestic sentiments during late morning deals. Traders got cautious, after the RBI data showed that India Inc's overseas direct investment fell by 31 per cent to USD 1.85 billion in February this year. Domestic companies made investments of USD 2.66 billion in their overseas subsidiaries and joint-ventures in the year-ago month, February 2020.

On the global front, Asian markets were trading mostly in red, after Japan posted a current account surplus of 646.8 billion yen in January, the Ministry of Finance said on Monday - down 2.3 percent on year. That missed forecasts for a surplus of 1,229.6 billion yen following the 1,165.6 billion yen surplus in December. The trade balance showed a deficit of 130.1 billion yen, down 86.9 percent on year after showing a surplus of 127.48 billion yen in the previous month.

The BSE Sensex is currently trading at 50686.67, up by 281.35 points or 0.56% after trading in a range of 50436.54 and 50985.77. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.71%, while Small cap index was up by 1.03%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.27%, Capital Goods up by 1.98%, PSU up by 1.94%, Energy up by 1.72% and Utilities up by 1.64%, while Realty down by 0.32% was the only losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.69%, ONGC up by 3.57%, HCL Tech up by 2.54%, Axis Bank up by 2.12% and Tech Mahindra up by 1.71%. On the flip side, Ultratech Cement down by 1.59%, Indusind Bank down by 1.51%, Bajaj Finance down by 1.29%, Kotak Mahindra Bank down by 0.75% and HDFC down by 0.58% were the top losers.

Meanwhile, the Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest survey report stated that its Overall Business Confidence Index has witnessed a decadal high of 74.2 in the current round on account of improvement in present conditions as well as expectations. The Index had stood at70.9 in the previous survey and 59 a year ago. It revealed recovery of demand conditions, improved capacity utilisation and a promising outlook on various operational parameters.

With regard to the constraining factors for business, the demand situation has improved on back of the release of the pent-up demand build up during the lockdown. However, it said rising raw material costs is emerging as a bothersome factor for members of India Inc. The rise in fuel and other commodity prices is beginning to exert pressure on the input costs of companies.

Companies participating in the survey cited high input costs including man power costs, weak demand conditions and lack of availability of affordable credit as their top-most concerns for the year 2021. A near-unanimity was observed as far as input costs were concerned. This along with high interest costs on loans, higher inward and outward transport and logistics costs, greater compliance burden on the back of frequently changing statutory compliances and increased manpower costs are further pushing the cost of doing business in India. It added that this does not bode well in the current environment wherein a shift in global supply chains is being witnessed.

Companies expect higher export orders in the coming months on the back of global economic recovery led by large scale vaccination drive against COVID-19 around the world. Respondents emphasised that given the current global sentiment, India could easily become the preferred sourcing destination for western countries if adequate and timely steps taken to support this change. In addition, companies stressed the need for reducing customs duty on imports to curtail rising domestic prices of raw materials.

Commodity prices have risen drastically in the past few weeks and this is impacting profitability and viability of business. Participants highlighted that restrictions on imports must be removed at least until India achieves some level of self-reliance in production of industrial inputs such as components and parts. The current survey drew responses from a wide array of sectors and was conducted during January and February this year. It gauges expectations for the period January to June 2021.

The CNX Nifty is currently trading at 15016.85, up by 78.75 points or 0.53% after trading in a range of 14951.75 and 15111.15. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were UPL up by 5.91%, GAIL India up by 5.88%, Larsen & Toubro up by 3.59%, ONGC up by 3.48% and HCL Tech up by 2.30%. On the flip side, Bajaj Finance down by 1.45%, Indusind Bank down by 1.45%, Ultratech Cement down by 1.40%, HDFC down by 0.94% and Kotak Mahindra Bank down by 0.80% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 389.36 points or 1.34% to 28,708.93, Nikkei 225 slipped 159.91 points or 0.55% to 28,704.41, Shanghai Composite declined 35.48 points or 1.01% to 3,466.51, KOSPI fell 22.76 points or 0.75% to 3,003.50 and Jakarta Composite lost 11.78 points or 0.19% to 6,246.97. On the flip side, Taiwan Weighted strengthened 7.24 points or 0.05% to 15,862.47 and Straits Times advanced 53.77 points or 1.78% to 3,067.62.