Domestic indices trade tad higher in early deals after negative start

Indian equity benchmarks made negative start on Tuesday amid mixed global cues. But, soon markets gathered momentum and wiped out all the losses and entered into green territory. Domestic indices are trading slightly higher in early deals on account of buying in Healthcare, IT and TECK stocks. Early cautiousness was due to new covid cases. India recorded 24,725 new Covid-19 cases and 438 deaths in the past 24 hours, taking its tally to 32,249,900 and the death toll to 432,112. Though, sentiments got a boost with report that Finance Minister Nirmala Sitharaman said that she expects inflation to remain in the prescribed range during the current fiscal. The RBI has been mandated to keep inflation at 4 per cent, with tolerance level of 2 per cent on either side. Adding more optimism, a report stated that investments by private equity and venture capital funds doubled to a record high of $9.5 billion in July mainly driven by higher investor interest in the e-commerce sector. Private equity (PE) and venture capital (VC) investments stood at $4.1 billion in the year-ago period.

On the global front, most of the Asian markets are trading lower following the mixed cues from Wall Street overnight, with a steep drop in crude oil prices and the surge in the spread of the delta variant of coronavirus and the resultant restrictions in several countries as well as disappointing Chinese economic data and geopolitical concerns weighing on investor sentiment. Markets in Indonesia are closed for Independence Day holiday.

Back home, sugar industry stocks were in focus with report that the Indian Sugar Mills Association (ISMA) has written to the Prime Minister’s Office (PMO) to immediately increase the Minimum Sale Price (MSP) of sugar from the current Rs 31 per kg to at least Rs 34-35 per kg to help it clear the pending sugarcane dues ahead of the new crushing season that will start from October 2021.  In scrip specific development, Adani Enterprises traded higher as its wholly-owned subsidiary -- Adani Road Transport said it would be acquiring Maharashtra Border Check Post Network (MBCPNL), a subsidiary of Sadbhav Infrastructure Project, at an enterprise value of Rs 1,680 crore.

The BSE Sensex is currently trading at 55620.58, up by 38.00 points or 0.07% after trading in a range of 55415.63 and 55688.50. There were 16 stocks advancing against 12 stocks declining, while 2 stocks remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.23%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.04%, IT up by 0.84%, TECK up by 0.76%, FMCG up by 0.69%, Telecom up by 0.31%, while Bankex down by 0.51%, Auto down by 0.28%, Metal down by 0.25%, Utilities down by 0.04%, Capital Goods down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.32%, Asian Paints up by 1.65%, Sun Pharma up by 1.27%, Nestle up by 1.05% and Hindustan Unilever up by 1.04%. On the flip side, Indusind Bank down by 1.50%, HDFC Bank down by 1.07%, ICICI Bank down by 0.70%, Axis Bank down by 0.70% and Bajaj Finserv down by 0.56% were the top losers.

Meanwhile, Automotive Tyre Manufacturers Association (ATMA) has asked the government to allow duty-free import of natural rubber as shortage of the commodity in India has become a major deterrent for the tyre industry to support domestic manufacturing. According to ATMA, natural rubber (NR) consumption is expected to increase further and the annual demand is expected to cross 13 lakh tonnes this fiscal.

It mentioned with the production of 7,90,000 tonnes as projected (in normal scenario) by Rubber Board, NR imports to the tune of at least 5 lakh tonnes are a must. It added the tyre industry accounts for over 70 per cent of NR consumed in the country. While the Rubber Board had projected much higher production figures for the ongoing fiscal, ATMA claimed that the ground realities are not in line with the Rubber Board's guidance as market arrivals of sheet rubber have dried thin.

It said during the first quarter of the current financial year, domestic NR production could fulfill only 42 per cent of the total requirement. According to provisional figures, as against NR consumption of 3.01 lakh tonnes, NR production stood at 1.27 lakh tonnes in the Q1 of FY22. Besides, it said with economic recovery back on track and the automobile industry witnessing increased traction, there is a surge in demand for tyres.

The CNX Nifty is currently trading at 16572.55, up by 9.50 points or 0.06% after trading in a range of 16516.60 and 16591.40. There were 28 stocks advancing against 21 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Tech Mahindra up by 3.38%, Tata Consumer Products up by 1.85%, Asian Paints up by 1.65%, Cipla up by 1.55% and Sun Pharma up by 1.43%. On the flip side, Indusind Bank down by 1.61%, HDFC Bank down by 1.05%, JSW Steel down by 0.78%, Axis Bank down by 0.75% and ICICI Bank down by 0.70% were the top losers.

Asian markets are trading mostly in red; Straits Times lost 18.88 points or 0.60% to 3,126.64, Hang Seng fell 184.57 points or 0.70% to 25,996.89, Taiwan Weighted declined 101.12 points or 0.60% to 16,757.65, KOSPI slipped 30.85 points or 0.97% to 3,140.44 and Shanghai Composite was down by 16.91 points or 0.48% to 3,500.43, while Nikkei 225 rose 26.70 points or 0.10% to 27,549.89.