Indian markets maintain upward momentum

Indian equity markets maintained their upward momentum in the noon session, following gains in Realty, Industrials and Auto stocks. Healthy buying was observed in blue-chip stocks like Bajaj Finance, Tata Steel and Sun Pharma. Sentiments were upbeat after the government said in Parliament that profitability of public sector banks has improved on a consolidated basis after amalgamation. Additional support came in as Finance Ministry in a report said the government has initiated various measures to provide relief and financial support to various sectors of the Covid-19 hit economy, at the same time, fiscal consolidation is also under focus. On the global front, Asian markets were trading mostly in green as the risk appetite of global investors rises heading into year-end, despite the surging number of Omicron COVID-19 variant cases around the world.

Back home, BSE Sensex is currently trading at 56694.48, up by 375.47 points or 0.67% after trading in a range of 56471.03 and 56820.89. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.20%, while Small cap index was up by 1.39%.

The top gaining sectoral indices on the BSE were Realty up by 2.63%, Industrials up by 1.60%, Auto up by 1.53%, Capital Goods up by 1.52% and Metal was up by 1.43%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.92%, Tata Steel up by 1.86%, Sun Pharma up by 1.77%, Indusind Bank up by 1.52% and SBI was up by 1.49%. On the flip side, Power Grid down by 2.76%, Wipro down by 1.17%, HDFC down by 0.34%, Nestle down by 0.22% and Asian Paints was down by 0.07% were the top losers.

Meanwhile, the ratings agency ICRA has said that domestic IT services companies are expected to log a dollar revenue growth of 9-12 per cent in FY2022, driven by accelerated demand for digital technologies from enterprises globally and partly on account of low base of last year due to the COVID-19 impact. It said industry growth is expected to moderate marginally to 6-9% in FY23, partly also on account of the base effect. ICRA has a stable outlook on the Indian IT services industry, led by minimal impact of the pandemic on revenues and profitability and steady earnings outlook over the near to medium term.

ICRA said IT services companies remain focused on enhancing the share of fixed price contracts as it assures better revenue visibility and also allows for higher deployment of offshore resources where the salaries are 60-70 per cent lower, coupled with better utilisation of manpower across such projects and deployment of automation. The benefits are shared with the client leading to mutual advantage. The ratings agency said the share of fixed price contracts has remained between 60-65 per cent in the past three years. There was some increase in H2 FY2021, which has tapered to around 61 per cent levels in the second quarter of FY2022, given the higher share of new contracts and mix of contracts secured.

ICRA assistant vice-president and sector head Deepak Jotwani said ‘In line with the growth trajectory witnessed over recent quarters, Indian IT services companies are expected to report healthy growth over the near term due to aforementioned favourable factors’. He added that this growth has been supported by uptick in all key verticals such as BFSI, telecom, manufacturing, retail and distribution. However, concerns have emanated from elevated attrition levels for the industry due to strong demand for digital technologies and lack of adequate skilled manpower to service the same. Firms are reskilling employees to overcome this challenge.

The CNX Nifty is currently trading at 16878.60, up by 107.75 points or 0.64% after trading in a range of 16819.50 and 16920.35. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 3.02%, Eicher Motors up by 2.83%, Tata Motors up by 2.72%, Hindalco up by 2.47% and UPL was up by 2.05%. On the flip side, Power Grid down by 2.83%, Wipro down by 1.22%, SBI Life Insurance down by 0.75%, Adani Ports down by 0.70% and HDFC was down by 0.43% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite gained 1.68 points or 0.05% to 3,626.81, Nikkei 225 surged 44.62 points or 0.16% to 28,562.21, Jakarta Composite soared 19.11 points or 0.29% to 6,573.42, Hang Seng increased 35.84 points or 0.16% to 23,007.17, Taiwan Weighted strengthened 37.56 points or 0.21% to 17,826.83 and KOSPI was up by 9.45 points or 0.32% to 2,984.48.

On the flip side, Straits Times was down by 0.93 points or 0.03% to 3,084.15.