Domestic indices trade firm in early deals

Indian equity markets opened on a positive note on Friday despite mixed cues from global markets and signs of rising Covid-19 cases in the country. Domestic indices gained momentum and added more gains in early deals on account of buying in all the sector indices led by Oil & Gas, Energy and Bankex. Some support came in as the finance ministry released monthly revenue deficit grant to 17 states totalling Rs 9,871 crore. So far, an amount of Rs 98,710 crore has been released to 17 states as post devolution revenue deficit grant in the current financial year. Traders took note of report that amid fears that the new coronavirus variant may disrupt normal business activity, industry chamber CII pitched for coordinated actions by the Centre and state governments to minimize the impact of Omicron on the economy. Meanwhile, the commerce and industry ministry is making changes in the foreign direct investment (FDI) policy to facilitate disinvestment of the country’s largest insurer LIC, after taking views from the finance ministry.

On the global front, most of the Asian markets are trading higher despite the broadly negative cues overnight from Wall Street, with support from higher crude oil prices and as traders are picking up stocks at a bargain after the recent sell-off. Meanwhile, traders remained cautious amid the rapid spread of the coronavirus Omicron variant in most countries. Banking stocks were in focus as rating agency Icra said the asset quality of the banking system, especially the restructured book, may face headwinds in the coming days as Covid-19 cases have started rising rapidly once again. In scrip specific development, Reliance Industries rose after raising $4 billion in the biggest foreign currency bond sale by an Indian corporate.

The BSE Sensex is currently trading at 60085.77, up by 483.93 points or 0.81% after trading in a range of 59727.25 and 60112.19. 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 0.58%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.48%, Energy up by 1.40%, Bankex up by 1.33%, Consumer Durables up by 1.33%, PSU up by 1.32%, while there were no losers.

The top gainers on the Sensex were Titan Company up by 2.42%, Wipro up by 1.95%, ICICI Bank up by 1.78%, SBI up by 1.64% and Reliance Industries up by 1.37%. On the flip side, HDFC down by 0.86%, Dr. Reddy's Lab down by 0.44%, Bajaj Finance down by 0.15%, Bharti Airtel down by 0.04% and Larsen & Toubro down by 0.03% were the top losers.

Meanwhile, amid a massive surge in COVID infections across the country, especially in the metro, a domestic rating agency -- India Ratings and Research in its latest report has said that the Omicron variant spread will impact the January-March quarter (Q4) Gross Domestic Product (GDP) by 0.40 per cent and shave off 0.10 per cent from the FY22 growth, as many states resort to restrictions to limit infections. It added that curbs in various forms such as reducing the capacity of market/market complexes and night/weekend curfews to check human mobility/contact have already started in several states, which are impacting economic activities. The surge in cases seen over the last fortnight will have an adverse impact on the fourth-quarter GDP and the growth will come at 5.7 per cent during the quarter, which is 0.40 per cent lower than the earlier estimate of 6.1 per cent.

For the entire FY22, the GDP is expected to clock a growth rate of 9.3 per cent, 0.10 per cent lower than what was estimated earlier. A majority of the new cases are suspected to be that of the Omicron variant of the coronavirus, which is suspected to be spreading fast and also evades prior vaccinations. Indications so far suggest that the infections are milder and mostly not life-threatening, the rating agency said, adding that the curbs imposed by local governments will be less disruptive than those during the first two waves of COVID. It said both government and businesses are more equipped to deal with the situation and be more resilient, and it expecting the impact of COVID 3.0 to be lower than COVID 1.0 and 2.0.

As per the report, the economy will bounce back pretty quickly once the third wave subsides. It added policy support - both monetary and fiscal - would be critical till the threat of pandemic continues and the economy reaches the stage of a sustained growth trajectory. Despite the ongoing recovery, it stressed select high-frequency indicators, such as the Index of Industrial Production, are showing that the industrial output levels are still lower than pre-COVID-19 levels. The rating agency said it expects the Reserve Bank of India to continue with its accommodative policy stance with no change in the policy rate in the foreseeable future and the Centre will not be in a hurry to get back to the fiscal consolidation path.

The CNX Nifty is currently trading at 17895.00, up by 149.10 points or 0.84% after trading in a range of 17787.70 and 17895.40. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.92%, Titan Company up by 2.51%, Grasim Industries up by 2.06%, ICICI Bank up by 1.78% and Wipro up by 1.74%. On the flip side, HDFC down by 0.78%, Dr. Reddy's Lab down by 0.47%, Bajaj Finance down by 0.34%, Cipla down by 0.33% and Larsen & Toubro down by 0.10% were the top losers.

Asian markets are trading mostly in green; Straits Times rose 17.30 points or 0.54% to 3,201.60, Hang Seng surged 244.00 points or 1.06% to 23,316.86, KOSPI jumped 30.22 points or 1.03% to 2,950.75, Jakarta Composite added 38.46 points or 0.58% to 6,691.81 and Shanghai Composite was up by 12.54 points or 0.35% to 3,598.62. On the other hand, Nikkei 225 declined 44.94 points or 0.16% to 28,442.93 and Taiwan Weighted fell 175.15 points or 0.95% to 18,192.77.