Domestic indices trade marginally higher in early deals

Indian equity benchmarks made slightly positive start on Wednesday following overnight gains on Wall Street amid some weakness in again peers. Markets are trading higher with marginal gains in early deals on account of buying in Oil & Gas, PSU and Power stocks. Sentiments got a boost as Moody's Investors Service changed its outlook on India's sovereign ratings to stable from negative. Besides, it retained the ratings, both on foreign and domestic currencies, at Baa3. Investors are looking ahead to that the Reserve Bank of India’s three-day policy meeting, which is set to begin today. Market participants do not expect the monetary policy committee to change its accommodative stance or the repo rate.

On the global front, Asian markets are trading mostly lower amid concerns about inflation on surging oil prices and the debt ceiling tussle in the U.S. weighed on the markets along with an increase in treasury yields. The coronavirus infections in the region also remain a concern. Back home, oil & gas industry stocks were in focus with a substantial increase in the offing in coming days as international oil prices touched seven-year high. In scrip specific development, IDFC First Bank traded higher as it posted 9.75 per cent growth in advances at Rs 1,17,243 crore for the second quarter ended September 30, 2021.

The BSE Sensex is currently trading at 59851.15, up by 106.27 points or 0.18% after trading in a range of 59799.26 and 59942.00. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.17%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.01%, PSU up by 0.92%, Power up by 0.52%, Utilities up by 0.45%, Bankex up by 0.42%, while Consumer Durables down by 0.35%, Healthcare down by 0.26%, Metal down by 0.15%, TECK down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.00%, HDFC up by 0.88%, HDFC Bank up by 0.80%, Mahindra & Mahindra up by 0.61% and Bajaj Finance up by 0.60%. On the flip side, Indusind Bank down by 0.97%, Titan Co down by 0.85%, HCL Tech. down by 0.39%, Tech Mahindra down by 0.39% and Dr. Reddy's Lab down by 0.37% were the top losers.

Meanwhile, citing receding downside risks to the economy and financial system, ratings agency Moody’s has upgraded outlook on the Government of India’s ratings to ‘stable’ from ‘negative’, and affirmed India’s sovereign rating. The sovereign rating by Moody’s stands at ‘Baa3’- which is the lowest investment grade, just a notch above junk status.

Moody’s Investors Service has affirmed the country’s foreign-currency and local-currency long-term issuer ratings and the local-currency senior unsecured rating at Baa3. The decision to change the outlook to stable reflects Moody’s view that the downside risks from negative feedback between the real economy and financial system are receding. With higher capital cushions and greater liquidity, banks and non-bank financial institutions pose much lesser risk to the sovereign than Moody’s previously anticipated.

It added ‘And while risks stemming from a high debt burden and weak debt affordability remain, Moody’s expects that the economic environment will allow for a  gradual reduction of the general government fiscal deficit over the next few years, preventing further deterioration of the sovereign credit profile’. Moody’s Investors Service had last year downgraded India’s sovereign rating to ‘Baa3’ from ‘Baa2’, saying there will be challenges in implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position. The outlook on the rating was kept negative.

The CNX Nifty is currently trading at 17846.70, up by 24.40 points or 0.14% after trading in a range of 17839.80 and 17884.60. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.73%, UPL up by 2.01%, IOC up by 1.39%, HDFC Bank up by 0.97% and HDFC up by 0.90%. On the flip side, Tata Motors down by 1.45%, JSW Steel down by 1.03%, Titan Company down by 0.90%, Indusind Bank down by 0.83% and Divi's Lab down by 0.73% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 266.44 points or 0.96% to 27,555.68, Hang Seng slipped 196.76 points or 0.82% to 23,907.39, Taiwan Weighted fell 97.93 points or 0.59% to 16,362.82 and KOSPI lost 25.76 points or 0.87% to 2,936.41. On the other hand, Straits Times rose 3.70 points or 0.12% to 3,071.82 and Jakarta Composite was up by 117.27 points or 1.86% to 6,405.32.