Benchmarks erase losses to trade marginally higher

Indian equity benchmarks recouped initial losses and were now trading marginally in green despite negative trend in Asian markets. Traders took some support with Commerce and Industry Minister Piyush Goyal’s statement that India attracted ‘record’ foreign direct investments (FDI) in the last seven years and this trend is expected to continue in the coming years as well on account of major structural reforms being undertaken by the government. He also said that India is focusing on integrating its quality standards with the world and the country needs to let go of the mindset of a particular product being for the domestic market and others for the export market. However, gains remain capped as Fitch Ratings has kept India's sovereign rating unchanged at 'BBB-' with a negative outlook. It stated that the rating balances a still-strong medium-term growth outlook and external resilience from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural issues.

On the global front, Asian markets were trading mostly in red despite gains on Wall Street as investors eye key economic and inflation data. Back home, on the sectoral front, stocks related to tea industry remained in watch as rating agency Icra in a report said firm prices of quality tea are likely to provide support for tea producers amid production expenses going up mainly due to a considerable hike in wage rates.

The BSE Sensex is currently trading at 60406.82, up by 84.45 points or 0.14% after trading in a range of 60029.21 and 60409.19. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.33%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Power up by 1.58%, Utilities up by 1.41%, Healthcare up by 0.74%, PSU up by 0.69% and Auto up by 0.58%, while Energy down by 0.62%, Oil & Gas down by 0.48%, TECK down by 0.06% and IT down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.31%, Asian Paints up by 2.00%, Power Grid Corporation up by 1.90%, SBI up by 1.69% and Indusind Bank up by 1.49%. On the flip side, Reliance Industries down by 0.71%, HDFC down by 0.67%, Dr. Reddy's Lab down by 0.62%, TCS down by 0.61% and Axis Bank down by 0.43% were the top losers.

Meanwhile, Fitch Ratings has kept India's sovereign rating unchanged at 'BBB-' with a negative outlook. It stated that the rating balances a still-strong medium-term growth outlook and external resilience from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural issues. It said the country's rapid economic recovery from the Covid-19 pandemic and easing financial sector pressures are narrowing risks to the medium-term growth outlook.

However, the negative outlook on the rating reflects lingering uncertainty around the medium-term debt trajectory, particularly given India's limited fiscal headroom relative to rating peers. It mentioned ‘We forecast robust GDP growth of 8.7 per cent in the fiscal year ending March 2022 (FY22) and 10 per cent in FY23 (ending March 2023), supported by the resilience of India's economy, which has facilitated a swift cyclical recovery from the Delta Covid-19 variant wave in 2Q21.’

Besides, it stated ‘the potential remains for a resurgence in coronavirus cases, though we anticipate the economic impact of further outbreaks would be less pronounced than previous surges, particularly given the sustained improvement in the Covid-19 vaccination rate, which has now surpassed 1 billion doses administered.’

The CNX Nifty is currently trading at 18017.95, up by 18.75 points or 0.10% after trading in a range of 17906.60 and 18018.70. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 2.88%, Tata Motors up by 2.48%, NTPC up by 2.20%, Asian Paints up by 1.98% and Power Grid Corp up by 1.87%. On the flip side, UPL down by 1.58%, Grasim Industries down by 1.05%, Reliance Industries down by 0.91%, Divi's Lab down by 0.90% and Adani Ports &SEZ down by 0.83% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 118.59 points or 0.46% to 25,595.19, Nikkei 225 slipped 79.61 points or 0.27% to 29,728.51, KOSPI fell 27.59 points or 0.92% to 2,969.62 and Straits Times trembled 9.55 points or 0.29% to 3,229.25.

On the flip side, Shanghai Composite gained 7.47 points or 0.21% to 3,529.26, Jakarta Composite soared 9.33 points or 0.14% to 6,660.54 and Taiwan Weighted strengthened 24.30 points or 0.14% to 17,717.43.