Domestic equity indices trade lower in early deals; IT, Energy lead losers

Indian equity benchmarks started the session in red on Thursday following overnight fall on Wall Street. Markets are trading lower with marginal cut in early deals due to selling in IT, Energy and TECK stocks. Some cautiousness came in as rating agency Icra said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission. The agency expects the real GDP to expand 6-6.5 per cent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022). Though, downside remained capped taking cues from mostly positive trade in Asian peers. Some support also came in as the Reserve Bank of India’s (RBI) digital payments index (DPI), which was launched in January 2021 to indicate the extent of digitisation of payments across the country, shows that the index for September 2021 stood at 304.06 against 270.59 in March. This indicates the rapid adoption and deepening of digital payments across the country. Traders took note of report that India will push for a waiver of certain provisions of the global intellectual property rights agreement for Covid-19 medicines and products at a mini ministerial meeting called by the World Trade Organization to firm up its pandemic response.

Most of the Asian markets are trading higher as traders pick up stocks at reduced levels following the recent sell-off and on a continued spike in crude oil prices. However, traders remain concerned about the raging spread of the coronavirus omicron variant across the globe and its impact on the pace of economic recovery from the pandemic. Meanwhile, Japan’s exports climbed 17.5 percent on year, exceeding expectation for a gain of 16.0 percent following the 20.5 percent increase in the previous month. Back home, textile industry stocks were in focus as a joint report by global consulting firm Kearney and The Confederation of Indian Industry (CII) said Indian textile exports can hit $65 billion if industry majors take the right steps and there is proper execution of government schemes. In scrip specific development, Bajaj Auto traded under pressure as it reported 22 per cent YoY fall in net profit at Rs 1,214 crore for the quarter ended December 2021 from Rs 1,556 crore in the corresponding quarter of FY21.

The BSE Sensex is currently trading at 59981.34, down by 117.48 points or 0.20% after trading in a range of 59791.11 and 60045.48. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Power up by 0.99%, Realty up by 0.93%, Utilities up by 0.90%, Basic Materials up by 0.84%, Metal up by 0.72%, while IT down by 0.72%, Energy down by 0.66%, TECK down by 0.64%, Oil & Gas down by 0.11%, Telecom down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.47%, Ultratech Cement up by 1.70%, Maruti Suzuki up by 1.31%, ITC up by 0.70% and Kotak Mahindra Bank up by 0.64%. On the flip side, Infosys down by 1.32%, Reliance Industries down by 1.22%, HCL Technologies down by 1.09%, Tech Mahindra down by 0.85% and Asian Paints down by 0.68% were the top losers.

Meanwhile, rating agency ICRA has said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission. The agency expects the real GDP to expand 6-6.5 per cent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022). It also sees the RBI maintaining the status quo in the upcoming monetary policy review to be held in February.

It said economic activity rebounded in December 2021, even as many sectors continued to trail the performance recorded in October 2021. Encouragingly, the quarterly data suggests a modest broad-basing of the recovery in Q3 FY2022, relative to Q2 FY2022, when compared to respective pre-COVID-19 volumes. However, the onset of the third wave of COVID-19 has triggered state-wise restrictions, which have expectedly interrupted the momentum in the ongoing month, reiterating that the recovery is yet to attain durability.

The agency said the y-o-y performance of 10 of the 15 high-frequency indicators improved in December 2021 compared to November 2021. These include generation of GST e-way bills, non-oil merchandise exports, electricity generation, two-wheeler output as well as aggregate deposits and non-food credit of scheduled commercial banks. The report further said the y-o-y performance of nine of the 15 high-frequency indicators in December 2021 trailed the growth seen in October 2021.

ICRA said that with the fresh uncertainty triggered by Omicron and the associated restrictions, it expects a status quo on the stance of the monetary policy as well as the reverse repo rate in the upcoming RBI policy meeting, in spite of the rise in the retail inflation in December 2021. The Consumer Price Index (CPI) accelerated to a six-month high of 5.59 per cent in December 2021, close to the RBI's upper tolerance band of six per cent.

The CNX Nifty is currently trading at 17910.45, down by 27.95 points or 0.16% after trading in a range of 17858.65 and 17943.70. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 3.13%, Power Grid up by 2.54%, Coal India up by 2.20%, Hero MotoCorp up by 2.03% and Ultratech Cement up by 1.34%. On the flip side, Infosys down by 1.41%, HCL Technologies down by 1.35%, Tech Mahindra down by 1.23%, Reliance Industries down by 1.06% and ONGC down by 0.91% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 323.46 points or 1.18% to 27,790.69, Straits Times rose 6.50 points or 0.20% to 3,290.44, Hang Seng jumped 558.24 points or 2.31% to 24,686.09, KOSPI advanced 14.65 points or 0.52% to 2,856.93, Jakarta Composite added 38.80 points or 0.59% to 6,630.78 and Shanghai Composite was up by 10.17 points or 0.29% to 3,568.35, while Taiwan Weighted was down by 15.59 points or 0.09% to 18,211.87.