Benchmarks trade flat in morning deals

Indian equity benchmarks were trading flat in morning deals, as traders weighed the possibility of a strong December quarter earnings season against rising Omicron cases and likely US Fed rate hikes. Traders also remained cautious with the Indian Banks’ Association (IBA) said the resurgence in the Covid cases caused by the Omicron variant may create some disruptions to the growth momentum. Some concern also came as data from the Reserve Bank of India (RBI) showed outward foreign direct investment by Indian companies fell by over 8 per cent to $2.05 billion in December 2021 in the current fiscal. Sectorally, energy stocks’ remained in focus with ICRA’s report that the country's renewable energy capacity addition is estimated to touch 16 GW in the next financial year in view of the strong pipeline of 55 GW clean energy projects. On the global front, Asian markets were trading mostly in red, as fears of an earlier-than-expected rate hike by the Fed to tackle inflation and increasing cases of the Omicron variant of COVID-19 kept investors on the back foot globally.

The BSE Sensex is currently trading at 60415.36, up by 19.73 points or 0.03% after trading in a range of 60281.52 and 60571.30. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 0.82%, Utilities up by 0.53%, Energy up by 0.49%, Healthcare up by 0.48% and IT up by 0.46%, while Metal down by 1.37%, Telecom down by 0.92%, Bankex down by 0.50%, Basic Materials down by 0.30% and Capital Goods down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.30%, HDFC up by 2.05%, NTPC up by 1.52%, Sun Pharma up by 1.24% and Tech Mahindra up by 0.82%. On the flip side, Tata Steel down by 1.88%, Bajaj Finance down by 1.33%, Kotak Mahindra Bank down by 1.12%, Asian Paints down by 1.03% and Bharti Airtel down by 0.96% were the top losers.

Meanwhile, in view of the strong pipeline of 55 GW clean energy projects, rating agency ICRA has said the country's renewable energy capacity addition is estimated to touch 16 GW in the next financial year (FY23). It stated the outlook for the capacity addition in the Renewable Energy (RE) sector remains strong with a large project pipeline of over 55 GW and the highly competitive tariffs offered by these projects. The capacity addition witnessed a strong recovery in the first eight months of FY2022 (April to November 2021) with 8.2 GW added against 3.4 GW added in the the year-ago period.

The rating agency mentioned that it expects RE capacity addition to increase from 7.4 GW reported in FY2021 to 12.5 GW in FY2022 and further to 16 GW in FY2023. This is also supported by the progress shown by the Solar Energy Corporation of India (SECI) in signing of power sale agreements and power purchase agreements in the last six months. Within the RE capacity, the addition would be driven by the solar segment followed by the wind and hybrid segments. The downside risks for renewable energy sector in the near term emanate from the execution headwinds and supply chain challenges for procuring modules and wind turbine generators.

It noted that the average price of imported solar PV modules (Mono PERC) has increased by over 35 per cent over the past 12 months, putting upward pressure on capital costs for solar power projects.  It pointed out notwithstanding the same and the recent hike in GST (Goods and Services Tax) rate for solar power equipment, the solar bid tariffs continue to remain highly competitive as seen from the quoted bid tariff of Rs 2.17 per unit in December 2021. On the other hand, it stated the wind segment continues to witness subdued capacity addition owing to execution headwinds, financing challenges for few developers and weak financial profile of some of the OEMs (Original Equipment Manufacturers) leading to supply side constraints.

The CNX Nifty is currently trading at 18007.80, up by 4.50 points or 0.02% after trading in a range of 17964.40 and 18053.90. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 2.38%, HDFC up by 2.02%, Divi's Lab up by 1.55%, NTPC up by 1.40% and Sun Pharma up by 1.12%. On the flip side, JSW Steel down by 2.21%, Tata Steel down by 1.95%, Bajaj Finance down by 1.39%, Adani Ports &SEZ down by 1.15% and Kotak Mahindra Bank down by 1.13% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 254.70 points or 0.89% to 28,223.86, Taiwan Weighted dropped 29.10 points or 0.16% to 18,210.28, Jakarta Composite lost 17.07 points or 0.26% to 6,674.05, Shanghai Composite declined 2.70 points or 0.08% to 3,590.82 and KOSPI fell 0.89 points or 0.03% to 2,925.83.

On the flip side, Straits Times advanced 13.82 points or 0.43% to 3,240.87 and Hang Seng increased 87.03 points or 0.37% to 23,833.57.