Markets wipe out opening losses; trade higher in early deals

Indian equity benchmarks made flat-to-negative start on Wednesday amid weakness in global markets coupled with rising corona cases in the country. But, soon markets wiped out losses and entered into green territory. Domestic indices are trading higher with marginal gains in early deals on account of buying in Healthcare, Capital Goods and Industrials. Some support came in as ICRA said the Indian economy is likely to maintain a real GDP growth of 9 percent each in FY2022 and FY2023 amid uncertainty triggered by the Omicron variant of corona virus. Though, upside remained limited as the government’s total liabilities rose to Rs 125.71 lakh crore in the September quarter from Rs 120.91 lakh crore in the three months ended June, according to the latest public debt management report. Meanwhile, Finance Minister Nirmala Sitharaman will hold a meeting with finance ministers of states on Thursday as part of customary pre-Budget consultations with various stakeholders.

Most of the Asian markets are trading lower following the mixed cues overnight from Wall Street, amid lingering concerns about the impact of the coronavirus Omicron variant on the economic recovery. Volumes were thin head of year-end holidays. Traders were reluctant to continue making significant moves following the recent strength in the markets.

Back home, pharma stocks were in focus with repot that Thirteen Indian companies can now manufacture and market oral antiviral drug Molnupiravir developed by Merck and Ridgeback Biotherapeutics after the country’s drug regulator granted approval for restricted use under emergency situations for Covid-infected adults in high-risk category. The approval for Molnupiravir assumes significance, as it can become an affordable oral treatment for Covid. In scrip specific development, Amara Raja Batteries traded higher as it agreed to invest up to Euro 10 million by way of equity and convertible bonds in InBot Auto AS, Oslo Norway in one or more tranaches.

The BSE Sensex is currently trading at 58017.15, up by 119.67 points or 0.21% after trading in a range of 57721.47 and 58021.31. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.42%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.81%, Capital Goods up by 0.64%, Industrials up by 0.55%, Realty up by 0.51%, Bankex up by 0.42%, while Metal down by 0.46%, Power down by 0.13%, Utilities down by 0.09% were the few losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.14%, Dr. Reddy's Lab up by 1.20%, ICICI Bank up by 1.12%, Sun Pharma up by 0.64% and Reliance Industries up by 0.59%. On the flip side, Power Grid down by 0.85%, NTPC down by 0.56%, Tata Steel down by 0.49%, ITC down by 0.25% and HDFC Bank down by 0.23% were the top losers.

Meanwhile, amid concerns over the Omicron variant of COVID-19, rating agency ICRA in its latest report has said that India’s real gross domestic product (GDP) is likely to maintain a 9% growth rate in fiscal 2022 and 2023. The Indian economy grew at 8.4% in the second quarter of the current fiscal, as against a growth of 20.1% in the April-June quarter.

The rating agency said ‘the available data for Q3 FY2022 does not offer convincing evidence that the Monetary Policy Committee's (MPC's) criteria of a durable and sustainable growth recovery has been met, to confirm a change in the Monetary Policy stance to neutral in February 2022’. It believes that rising consumption will push capacity utilisation above the crucial threshold of 75 per cent by the end of 2022, which should then trigger a broad-based pick-up in private sector investment activity in 2023. The agency also expects the visibility of tax revenue growth to spur faster government spending in 2022.

Icra Chief Economist Aditi Nayar said in the report ‘we are maintaining our forecast of a 9% GDP expansion in FY2022, with a clear K-shaped divergence amongst the formal and informal parts of the economy, and the large gaining at the cost of the small.’ He added ‘looking ahead, we expect the economy to maintain a similar 9 per cent growth in FY2023’. She expects the percentage of double-vaccinated adults to rise to 85-90 per cent by March 2022. She also said while the announcement of booster doses and vaccines for the 15-18 age group is welcome, it remains to be seen whether all the existing vaccines would offer adequate protection against the new Omicron variant to avert a third wave in India.

The CNX Nifty is currently trading at 17263.50, up by 30.25 points or 0.18% after trading in a range of 17180.95 and 17267.20. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.12%, Dr. Reddy's Lab up by 1.37%, ICICI Bank up by 1.16%, Cipla up by 0.79% and Sun Pharma up by 0.71%. On the flip side, Power Grid down by 0.71%, JSW Steel down by 0.66%, Hindalco down by 0.57%, Tata Steel down by 0.57% and Coal India down by 0.50% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 192.97 points or 0.66% to 28,876.19, Hang Seng lost 217.13 points or 0.93% to 23,063.43, KOSPI plunged 27.55 points or 0.91% to 2,992.69, Jakarta Composite fell 4.63 points or 0.07% to 6,593.71 and Shanghai Composite was down by 28.57 points or 0.79% to 3,601.54. On the other hand, Straits Times rose 7.00 points or 0.22% to 3,135.41 and Taiwan Weighted was up by 34.94 points or 0.19% to 18,231.75.