Key gauges continue to show positive trend in morning session

Indian equity benchmarks continued to show a positive trend in morning session, with gains of over a percent, tracking firm global cues. Sentiments remained positive as new research from the US India Strategic Partnership Forum (USISPF) and digital currency exchange CrossTower has said web 3.0, the idea that the next iteration of the Internet which will be built on concepts of decentralisation, openness, and greater user utility, can help India contribute an additional $1.1 trillion of economic growth to its GDP over the next 11 years. Traders also took a note of Minister of State for Finance Pankaj Chaudhary’s statement that India currently has the fourth largest foreign exchange reserves in the world. Market participants overlooked domestic credit rating agency ICRA’s report stated that the looming threat of the newly discovered Omicron variant of Covid-19 can severely affect loan securitisation volumes in the country as concerns over retail asset quality reemerge.

On the global front, Asian markets were trading in green on receding worries about the impact of the Omicron coronavirus variant and as China's central bank eased its monetary policy. Back home, on the sectoral front, stocks related to aviation sector remained in focus as Minister of State for Civil Aviation V K Singh said the airlines and airports in India incurred an estimated loss of Rs 19,564 crore and Rs 5,116 crore, respectively, in 2020-21 due to severe disruption caused by the COVID-19 pandemic.

The BSE Sensex is currently trading at 57369.92, up by 622.78 points or 1.10% after trading in a range of 56992.27 and 57404.38. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.71%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Metal up by 2.09%, Bankex up by 1.89%, Oil & Gas up by 1.58%, PSU up by 1.51% and Realty up by 1.36%, while Healthcare down by 0.12% was the lone losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 3.18%, Axis Bank up by 2.41%, Tata Steel up by 2.29%, Bajaj Finance up by 2.18% and HDFC up by 1.83%. On the flip side, Dr. Reddy's Lab down by 0.53%, Asian Paints down by 0.22% and Tech Mahindra down by 0.14% were the top losers.

Meanwhile, Crisil in its latest report has said that the Centre's fertiliser subsidy bill is set to soar by 62 per cent over the budgeted amount to Rs 1.3 lakh crore this fiscal due to the massive rise in raw material prices despite lower demand. An unprecedented spike in natural gas prices and other raw materials is set to inflate the fertilisers subsidy bill by a whopping 62 per cent or Rs 50,000 crore to Rs 1,30,000 crore this fiscal over the budgeted Rs 79,530 crore.

It said this is despite sales volume declining 10 per cent from the record level last fiscal. To encourage farmers to use fertilisers for better crop yield, government keeps their sale price significantly lower than market rates, and reimburses the difference to manufacturers directly. But for long, budget provisioning for such subsidies have been inadequate, leading to regular build-up of arrears. However, last fiscal the government cleared arrears through an additional disbursement of Rs 62,638 crore helping companies nurse their balance sheets to better health.

Besides, crisil expects the price of natural gas, the feedstock that accounts for 75-80 per cent of the total cost of production for urea plants, to rise over 50 per cent this fiscal. This is on top of the prices of key raw materials like phosphoric acid and ammonia, for non-urea fertiliser companies, that are already up 40-60 per cent over the past fiscal.

The CNX Nifty is currently trading at 17095.60, up by 183.35 points or 1.08% after trading in a range of 16987.75 and 17105.20. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.45%, Kotak Mahindra Bank up by 3.40%, Axis Bank up by 2.44%, Tata Steel up by 2.27% and ICICI Bank up by 1.88%. On the flip side, SBI Life Insurance down by 0.69%, Cipla down by 0.39%, Asian Paints down by 0.27%, Dr. Reddy's Lab down by 0.26% and Divi's Lab down by 0.14% were the top losers.

Asian markets were trading in green; Jakarta Composite soared 45.62 points or 0.7% to 6,592.74, Straits Times advanced 7.64 points or 0.25% to 3,123.96, Shanghai Composite gained 4.42 points or 0.12% to 3,593.73, KOSPI rose 13.90 points or 0.47% to 2,987.15, Taiwan Weighted strengthened 8.23 points or 0.05% to 17,696.44, Nikkei 225 surged 592.07 points or 2.12% to 28,519.44 and Hang Seng increased 340.63 points or 1.46% to 23,690.01.