Benchmarks trim losses in noon deals

Indian equity benchmarks trimmed most of their losses in noon session, but continue to trade below the neutral lines with Sensex and Nifty trading below at 61,300 and 18,300 respectively. Stocks from banking, realty and power counters were supporting the markets, while those from telecom, auto and teck counters were adding to the underlying cautious undertone. Traders were worried as Crisil Ratings’ report stated that securitisation volume growth slowed to around 8 percent on year to Rs 29,000 crore in the quarter ended December 31, 2021 (Q3FY22), on higher risk aversion amid the third wave of COVID-19. However, markets trimmed some of its losses as Commerce and Industry Minister Piyush Goyal stated that the country is on track to achieve the $650-billion export target set for goods and services in the ongoing fiscal year (FY22). He added that the $400-billion merchandise exports target is within sight and the services sector should also strive towards meeting the $250-billion target.

On the global front, Asian markets were trading mostly lower as investors continuing to monitor the global economic recovery from COVID-19. Also, Chinese President Xi Jinping cautioned against a rapid rise in interest rates that could derail the global recovery from the coronavirus pandemic. Back home, Supply chain company Delhivery has received capital markets regulator Sebi's approval to raise Rs 7,460 crore through an initial public offering (IPO). The IPO comprises fresh issuance of equity shares worth Rs 5,000 crore and an offer for sale (OFS) component of Rs 2,460 crore by existing shareholders.

The BSE Sensex is currently trading at 61212.04, down by 96.87 points or 0.16% after trading in a range of 60948.04 and 61475.15. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.43%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Bankex up by 0.87%, Realty up by 0.70%, Power up by 0.51%, Utilities up by 0.49% and Consumer Durables was up by 0.47%, while Telecom down by 1.50%, Auto down by 0.87%, TECK down by 0.84%, Basic Materials down by 0.76% and IT was down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.89%, HDFC Bank up by 1.36%, Titan Company up by 1.34%, Kotak Mahindra Bank up by 1.32% and ICICI Bank was up by 0.56%. On the flip side, Maruti Suzuki down by 2.75%, Ultratech Cement down by 2.36%, Tech Mahindra down by 2.13%, Larsen & Toubro down by 1.34% and HCL Tech was down by 1.33% were the top losers.

Meanwhile, Ratings agency ICRA is maintaining the domestic demand growth in volumes estimate for the Indian tyre industry at 13-15 percent for the ongoing fiscal year (FY22) and 7-9 percent for the FY22-25 period. It said while the stable demand from replacement and export segments support industry revenues, earnings have been affected by elevated input prices. Following two years of contraction -- down 9 per cent each in FY20 and FY21 -- amid sharp contraction in vehicle sales and COVID-19, it said tyre demand has recovered sharply in FY22.

However, the report said the impact of the pandemic on tyre demand has been relatively less compared to other auto components. It said this is given its higher skew (around 60 per cent) on the after-market segment. It stated that the tyre industry is relatively better protected from any potential impact of Omicron due to its large dependence on the stable replacement market and learnings from earlier waves.

ICRA expects industry revenue growth of 16-20 per cent in FY2022, driven by growth in volumes and realisations. It said while the demand is favourable, higher input prices (namely natural rubber and crude derivatives) keep industry margins and earnings under pressure. It added that replacement volumes are at record-high levels with improving economic activities while OE (original equipment) sales are partly affected by the sluggish demand for two-wheelers and supply constraints impacting passenger vehicle production.

The CNX Nifty is currently trading at 18262.40, down by 45.70 points or 0.25% after trading in a range of 18186.20 and 18350.95. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 1.91%, HDFC Bank up by 1.39%, Titan Co up by 1.26%, BPCL up by 1.24% and Kotak Mahindra Bank was up by 1.11%. On the flip side, Eicher Motors down by 3.21%, Maruti Suzuki down by 2.68%, Ultratech Cement down by 2.42%, Tech Mahindra down by 2.24% and Tata Consumer Products down by 1.90% were the top losers.

Asian markets were trading mostly lower; KOSPI fell 25.86 points or 0.89% to 2,864.24, Hang Seng decreased 126.57 points or 0.52% to 24,091.46, Nikkei 225 slipped 76.27 points or 0.27% to 28,257.25, Taiwan Weighted dropped 146.80 points or 0.79% to 18,378.64 and Jakarta Composite was down by 93.45 points or 1.41% to 6,551.60.

On the other hand, Shanghai Composite gained 19.42 points or 0.55% to 3,561.09 and Straits Times was up by 2.90 points or 0.09% to 3,290.85.