Bourses continue to trade in positive territory

The Indian equity benchmarks continued their trade in positive territory in late afternoon session. Tata Steel, Bajaj Finserv and Indusind Bank were the prime gainers among heavy-weights. Traders took note of report that Reserve Bank of India (RBI) has launched the latest round of its quarterly Order Books, Inventories and Capacity Utilisation Survey (OBICUS) of the manufacturing sector, results of which are used in monetary policy formulation. The survey provides valuable input for monetary policy formulation. Traders ignored that GST collection slipped below Rs 1 lakh crore in June for the first time in eight months as the second wave of the Covid pandemic and the resultant lockdowns hit businesses and the economy. At Rs 92,849 crore, the Goods and Services Tax (GST) collection is the lowest in 10 months since August 2020, when it was Rs 86,449 crore.

On the global front, Asian markets were trading mostly in red as investors awaited minutes from the Federal Reserve’s latest meeting for clues on policy makers’ thinking on interest rates and stimulus. Bonds stabilized after a rally. European markets were trading higher, shaking off losses on Wall Street triggered in part by softer-than-expected economic data. Resource stocks were leading the gainers, along with sportswear maker Puma.

The BSE Sensex is currently trading at 52,954.98, up by 93.8 points or 0.18% after trading in a range of 52751.76 and 53006.00. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.20%.

The gaining sectoral indices on the BSE were Metal up by 2.18%, Realty up by 1.93%, Basic Materials up by 1.21%, Capital Goods up by 0.54% and Telecom was up by 0.39%, while Consumer Durables down by 0.91%, Energy down by 0.69%, Oil & Gas down by 0.65%, Auto down by 0.39% and Utilities was down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.02%, Bajaj Finserv up by 2.18%, Indusind Bank up by 1.37%, HDFC up by 1.00% and Sun Pharma up by 0.98%. On the flip side, Titan Company down by 1.97%, Mahindra & Mahindra down by 0.89%, Reliance Industries down by 0.72%, Maruti Suzuki down by 0.69% and Bajaj Auto down by 0.25% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that after two years of contraction, the Indian tyre industry's demand is poised to grow by 13-15 percent in the original equipment manufacturer (OEM) segment and 7-9 percent in the replacement market segment this fiscal (FY22). Stating that capex executions have resumed in the last few months after a hiatus with improving domestic and exports demand, it said based on projected demand growth, capital expenditure of over Rs 20,000 crore is expected in the tyre industry between FY2022 and FY2025, which would be partly debt funded.

According to the report, the demand outlook of the tyre industry remains favourable and growth in the ongoing fiscal will be aided by a sharp recovery in OEM tyre demand, lower base effect of FY2021, improving pace of vaccination, continued preference for personal mobility and healthy rural cash flows amid a normal monsoon forecast. It noted that tyre demand has been relatively more resilient compared to other auto components as the replacement demand in the tyre industry insulates it from cyclicality to a large extent.

In line with the overall auto industry, tyre demand contracted sharply in Q1 FY2021 due to the nationwide lockdown, but recovery in tyre demand was stronger and faster as tyre volumes reached the pre-COVID levels in Q2 FY2021 and witnessed a healthy growth in the subsequent two quarters. Between FY2022 and FY2025, it expects domestic tyre demand to increase at a Compound Annual Growth Rate (CAGR) of 7-9 per cent in units, aided by stable replacement demand, a pick-up in OEM demand and exports.

The CNX Nifty is currently trading at 15,846.15, up by 27.90 points or 0.18% after trading in a range of 15779.70 and 15857.00. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.97%, JSW Steel up by 2.92%, Bajaj Finserv up by 2.13%, Hindalco up by 1.75% and Indusind Bank up by 1.29%. On the flip side, Titan Company down by 1.93%, ONGC down by 1.60%, Grasim Industries down by 1.07%, Mahindra & Mahindra down by 1.02% and Reliance Industries down by 0.78% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 276.26 points or 0.96% to 28,366.95, Hang Seng decreased 112.24 points or 0.4% to 27,960.62, Taiwan Weighted dropped 62.38 points or 0.35% to 17,850.69, Straits Times trembled 47.00 points or 1.47% to 3,143.59, KOSPI fell 19.87 points or 0.6% to 3,285.34 and Jakarta Composite was down by 3.07 points or 0.05% to 6,044.04. On the flip side, Shanghai Composite was up by 23.46 points or 0.66% to 3,553.72.

European markets were trading higher, UK’s FTSE 100 increased 37.17 points or 0.52% to 7,138.05, France’s CAC increased 24.96 points or 0.38% to 6,532.44 and Germany’s DAX was up by 124.13 points or 0.8% to 15,635.51.