Domestic markets trade higher in early deals

Indian equity benchmarks made optimistic start on Thursday tracking positive global cues. Markets are trading higher in early deals with gains of around one third of a percent each. Buying in IT, TECK and Oil & Gas counter aiding the sentiments whereas selling in Utilities, FMCG and Auto stocks kept upside in check. Traders took encouragement with a private report stating that the New Year will herald the return of normalcy and witness the growth momentum gaining steam, and pegged the real GDP growth estimate at 8.2 per cent for FY2022-23. Though, some gains got trimmed amid Omicron concerns. State Health Minister Veena George said four more cases of Covid-19 variant Omicron have been confirmed in Kerala. With this the total cases of the variant in Kerala has reached 5 and in India -73. Some cautiousness also came in as IMF Chief Economist Gita Gopinath said that as the global economy recovers from the pandemic, a great deal of uncertainty remains about new COVID-19 variants and increased inflation pressures in many countries.

Global cues remained supportive as most of the Asian markets traded higher following the broadly positive cues overnight from Wall Street, reflecting a positive reaction to the US Federal Reserve's highly anticipated monetary policy announcement, with the Fed deciding to boost the pace of reductions to its asset purchases program and hike interest rate. Back home, passenger vehicles industry stocks were in limelight as ratings agency ICRA revised downwards growth forecast for the domestic passenger vehicles industry to 8-11 per cent in the ongoing fiscal from the earlier estimate of 14-17 per cent on account of the ongoing semiconductor shortage. In scrip specific development, Reliance Industries traded higher amid reports that it aims to get the first cargo of oil, about 500,000 barrels, from its new Abu Dhabi-based trading unit in December.

The BSE Sensex is currently trading at 57980.68, up by 192.65 points or 0.33% after trading in a range of 57963.83 and 58337.20. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.02%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were IT up by 1.15%, TECK up by 0.93%, Oil & Gas up by 0.66%, Energy up by 0.49%, Metal up by 0.48%, while Utilities down by 0.67%, FMCG down by 0.56%, Auto down by 0.43%, Power down by 0.37%, Healthcare down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.96%, Bajaj Finance up by 1.91%, HCL Technologies up by 1.18%, Ultratech Cement up by 0.80% and Mahindra & Mahindra up by 0.76%. On the flip side, Maruti Suzuki down by 1.05%, Sun Pharma down by 0.99%, ITC down by 0.98%, Power Grid down by 0.98% and Asian Paints down by 0.69% were the top losers.

Meanwhile, an article on the state of the economy published in RBI Bulletin said that upbeat high-frequency indicators and consumer confidence show that the Indian economy continues to forge ahead, emerging out of shackles of the pandemic. The recovery is spearheaded by an uptick in private investment through November-December alongside a turnaround in bank credit offtake and high capex from the government sector (Centre and States). It said in conjunction, the employment situation has brightened. It added ‘The outlook remains upbeat, though concerns revolving around the spread of the new Omicron variant are surfacing’. The RBI clarified that the views expressed in the article are those of the authors and do not necessarily represent the views of the Reserve Bank of India.

The article further said indicators of aggregate demand point to sustained recovery across spheres, but with signs of sequential moderation. Even as E-way GST bills generation remained above pre-pandemic levels, there was some sequential dip in November on account of festive season fatigue in the first half of November. However, E-way bills generation has picked up again in December (up to December 12) posting sharp month-on-month growth. It said ‘The end of the festive season reflected in moderation in the growth momentum of petroleum consumption, led by a decline in diesel even as petrol consumption remained above pre-pandemic levels and aviation turbine fuel recorded a steady pick-up in November 2021’.

The article also said global supply chain and logistics disruptions continued to weigh heavily on the domestic automobile sector. The supply bottlenecks thwarted festive season sales of motor vehicles. The global economy remains hostage to heightened uncertainty, with Omicron sparking fresh containment measures. The Indian economy bounced back strongly in the second quarter of 2021-22, with GDP surpassing its pre-pandemic levels, and inflation broadly aligning with the target. A host of incoming high-frequency indicators are looking upbeat and consumer confidence is gradually returning. Aggregate demand conditions point to sustained recovery, albeit, with some signs of sequential moderation.

The CNX Nifty is currently trading at 17290.05, up by 68.65 points or 0.40% after trading in a range of 17282.90 and 17379.35. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 1.98%, Infosys up by 1.93%, Grasim Industries up by 1.50%, Wipro up by 1.50% and HCL Technologies up by 1.11%. On the flip side, Maruti Suzuki down by 1.12%, ITC down by 1.03%, Eicher Motors down by 0.99%, Sun Pharma down by 0.88% and Power Grid Corp down by 0.86% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 509.64 points or 1.79% to 28,969.36, Straits Times rose 4.98 points or 0.16% to 3,119.86, Taiwan Weighted advanced 81.55 points or 0.46% to 17,741.65, KOSPI added 5.96 points or 0.20% to 2,995.35 and Shanghai Composite was up by 10.22 points or 0.28% to 3,657.85. On the other hand, Hang Seng fell 186.10 points or 0.79% to 23,234.66 and Jakarta Composite was down by 24.37 points or 0.37% to 6,601.89.