Markets trade firm in early deals; Nifty surpasses 16,650 mark

Indian equity benchmarks made optimistic start on Wednesday tracking positive trend in Asian peers. Markets are trading firm in early deals on account of buying in Capital Goods, Power and Telecom stocks. Sentiments got a boost as RBI article said the economy is gaining traction with gradual pick up in manufacturing activity and moderation in contraction of services, spurred by comfortable liquidity conditions. Some support also came in as the government announced the much-awaited guidelines and tax refund rates for the export boosting scheme Remission of Duties and Taxes on Export Products (RoDTEP) for 8,555 export items. Adding optimism, Union Road Transport and Highways Minister Nitin Gadkari said that the National Automobile Scrappage Policy will accelerate economic growth and boost employment generation in the country. Meanwhile, India recorded 35,201 new Covid-19 cases and 440 deaths in the past 24 hours, taking its tally to 32,285,101 and the death toll to 432.

On the global front, most of the Asian markets are trading higher despite the broadly negative cues overnight from Wall Street, amid bargain hunting and economic optimism as investors await the comments by U.S. Federal Reserve chairman Jerome Powell for an update on the health of the global economy. Traders also remained concerned about the rapid spread of the delta variant of the coronavirus in the region.

Back home, sugar industry stocks were in focus with report that India is expected to withdraw sugar export subsidies from the new season beginning October as a sharp rise in global prices makes it easier for Indian mills to sell the sweetener on the world market. In scrip specific development, ISGEC Heavy Engineering traded higher as it bagged an order for two gas fired boilers from Naval Project, Indian Navy. The scope of work includes manufacturing of two 40 TPH Boilers on a turnkey basis.

The BSE Sensex is currently trading at 55997.42, up by 205.15 points or 0.37% after trading in a range of 55961.73 and 56086.50. There were 17 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.83%, Power up by 0.70%, Telecom up by 0.55%, Utilities up by 0.50%, Oil & Gas up by 0.46%, while Realty down by 0.64%, Auto down by 0.29%, Metal down by 0.27%, IT down by 0.20%, TECK down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.73%, Ultratech Cement up by 1.65%, Bajaj Finance up by 1.22%, Power Grid Corp up by 1.20% and Bajaj Finserv up by 1.18%. On the flip side, Indusind Bank down by 0.50%, Maruti Suzuki down by 0.42%, Kotak Mahindra Bank down by 0.36%, Sun Pharma down by 0.30% and Mahindra & Mahindra down by 0.23% were the top losers.

Meanwhile, Icra in its latest report has said that home textile exporters are set to clock a 20-25 per cent growth in current financial year (FY22) with healthy margins. The pandemic-induced lifestyle changes stemming from heightened consciousness about hygiene and increased prevalence of stay-at-home options are likely to result in a robust performance for Indian home textile exporters. For the past three quarters, sales for the sample set have averaged 25-40 per cent higher than the 3-year average for the pre-COVID period.

Icra Senior Vice President and Co-Group Head, Corporate Sector Ratings, Pavethra Ponniah said home textile exports was one of the first few textile segments to recover from the impact of the pandemic last fiscal, with companies reverting to year-on-year growth from the second quarter of FY21 itself and reporting three consecutive quarters of double-digit growth thereafter. She noted the export demand has been mainly driven by the US, the largest market, accounting for 60 per cent of India's home textile exports.

Compared to a 9 per cent increase in India's home textile product exports of $5.7 billion in FY21, exports to the US increased by 14 per cent, while exports to the other major markets of the UK and the EU reported a y-o-y decline during the year. She added besides faster opening up, increase in exports to the US is partly attributable to the distribution model for these products, with a meaningful share accounted for by the large departmental chains that remained open even during the lockdown phase.

The CNX Nifty is currently trading at 16670.40, up by 55.80 points or 0.34% after trading in a range of 16656.15 and 16693.00. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.14%, HDFC Bank up by 1.95%, Bajaj Finserv up by 1.37%, Eicher Motors up by 1.34% and Bajaj Finance up by 1.32%. On the flip side, IOC down by 0.90%, Hero MotoCorp down by 0.86%, Tata Motors down by 0.79%, Wipro down by 0.69% and Indusind Bank down by 0.52% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 rose 185.94 points or 0.68% to 27,610.41, Straits Times soared 26.83 points or 0.86% to 3,145.34, Hang Seng jumped 163.10 points or 0.63% to 25,908.97, KOSPI surged 21.95 points or 0.70% to 3,165.04, Jakarta Composite added 14.42 points or 0.24% to 6,102.33 and Shanghai Composite gained 19.35 points or 0.56% to 3,466.33, while Taiwan Weighted was down by 0.53 points to 16,660.83.