Key gauges add some gains in morning deals

Indian equity benchmarks added some gains in morning deals, ahead of the expiry of December month derivative contracts. Traders took some support with private report stated that employment opportunities in the e-commerce and allied industries witnessed a 28 per cent surge in 2021, and recruitment activities in this segment will gain further momentum driven by economic recovery and aggressive vaccination drive. Traders also took a note of the Reserve Bank of India’s (RBI) second Financial Stability Report (FSR) stated that the Omicron variant of coronavirus remains the major challenge along with rising inflation pressures, though the economy has steadily gained momentum and remained resilient since the second quarter of the current fiscal. Meanwhile, the GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on December 31 and discuss, among other things, report of the panel of state ministers on rate rationalisation.

On the global front, Asian markets were trading mostly in red, following the mixed cues overnight from Wall Street, as traders braced for a feared rebound in coronavirus cases at the start of New Year's holidays due to the rapid spread of the Omicron variant. Back home, on the sectoral front, stocks related to Defence industry remained in focus as the defence ministry announced a fresh list of 351 sub-systems and components that will not be allowed to be imported under a staggered timeline beginning December next year.

The BSE Sensex is currently trading at 58001.55, up by 195.06 points or 0.34% after trading in a range of 57578.99 and 58010.03. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.09%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were IT up by 0.98%, TECK up by 0.95%, Telecom up by 0.84%, Healthcare up by 0.61% and Consumer Durables up by 0.40%, while Realty down by 0.51%, Oil & Gas down by 0.46%, PSU down by 0.32%, Auto down by 0.24% and Metal down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.25%, HCL Technologies up by 1.35%, Tech Mahindra up by 1.31%, Dr. Reddy's Lab up by 1.13% and Bharti Airtel up by 0.97%. On the flip side, Bajaj Finserv down by 1.07%, Mahindra & Mahindra down by 0.28%, Kotak Mahindra Bank down by 0.26%, SBI down by 0.23% and Reliance Industries down by 0.17% were the top losers.

Meanwhile, Credit rating agency ICRA has revised its outlook of the telecom services sector from Negative to Stable. The rating agency stated the telecom tariff hike along with the recent relief package offers sufficient headroom for the industry to undertake deleveraging as well as fund capex for 5G tech upgrade. It mentioned the telecom industry has implemented the long-awaited tariff hikes which have the potential to improve the industry ARPU levels to around Rs 170 by the end of 2022-23.

Further, it said the latest round of tariff hikes where telecom companies increased the prepaid tariffs by around 20 per cent will provide much-needed traction in the ARPU levels. It stated ‘We expect the industry revenues to grow by 18-20 per cent in 2022-23, followed by a growth of 10-12 per cent in 2023-24, which given the high operating leverage, is likely to translate in healthy expansion in operating profits, the same are projected to grow by around 30 per cent in 2022-23.’

Besides, it added while the moratorium on the dues would impact the non-tax receipts of the government from the telecom sector, two telcos have pre-paid their dues towards earlier spectrum auctions totalling to Rs 26,300 crore thereby making up for the loss to the government. It estimated for 2021-22, the telecom sector is expected to contribute around Rs 54,000 crore to the government's non-tax receipts which will be close to the budgeted estimate for the fiscal. However, it warned debt continues to remain the ‘Achilles' heel’ of the industry. It expected industry debt levels to remain at around Rs 4.7 lakh crore as on March 31, 2022, before moderating to Rs 4.5 lakh crore as on March 31, 2023.

The CNX Nifty is currently trading at 17257.70, up by 44.10 points or 0.26% after trading in a range of 17146.35 and 17264.05. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.00%, HCL Technologies up by 1.27%, Tech Mahindra up by 1.26%, Dr. Reddy's Lab up by 1.17% and Bharti Airtel up by 0.95%. On the flip side, Bajaj Auto down by 1.77%, Bajaj Finserv down by 1.08%, BPCL down by 0.72%, Coal India down by 0.72% and Indian Oil Corporation down by 0.67% were the top losers. 

Asian markets were trading mostly in red; Nikkei 225 slipped 75.74 points or 0.26% to 28,831.14, KOSPI fell 12.52 points or 0.42% to 2,980.77, Straits Times trembled 10.04 points or 0.32% to 3,127.98, Jakarta Composite lost 8.91 points or 0.13% to 6,591.77 and Taiwan Weighted dropped 4.90 points or 0.03% to 18,243.38.

On the flip side, Shanghai Composite gained 29.58 points or 0.82% to 3,626.58 and Hang Seng increased 48.34 points or 0.21% to 23,134.88.