Domestic indices trade slightly higher in early deals

Indian equity benchmarks made cautious start on Friday amid mixed global cues. Markets soon gathered momentum and are trading slightly higher in early deals. Buying in Metal, Basic Materials and PSU stocks aided the markets. Sentiments got a boost as CBDT Chairman J B Mohapatra said direct tax collections are expected to breach the revised target of Rs 12.50 lakh crore and set an all-time high and 'historic' record by the end of this financial year in March. Some support also came in as economic think-tank NCAER said the business confidence has remained buoyant in the third quarter of the current financial year, though the pace of rise was moderated by a spurt in the number of COVID-19 cases in December 2021. Traders took note of a private report that the Monetary Policy Committee (MPC) may go for a hike of up to 0.25 per cent in the reverse repo rate at which the RBI absorbs excess liquidity and leave the repo rate at which it lends, to narrow the policy rate corridor.

On the global front, Asian markets are trading higher, despite weakness on Wall Street, as traders looked ahead to the release of the Labor Department's closely watched monthly jobs report later in the day. Markets in China and Taiwan remain closed for the Lunar New Year holidays. Back home, sugar industry stocks were in focus as industry body ISMA said the country's sugar production is estimated to have increased by 5.64 percent to 18.70 million tonnes during the October-January period of the ongoing marketing year, 2021-22, from over the year-ago period.

The BSE Sensex is currently trading at 58798.11, up by 10.09 points or 0.02% after trading in a range of 58475.97 and 58935.38. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Metal up by 1.87%, Basic Materials up by 1.15%, PSU up by 0.63%, Utilities up by 0.61%, Power up by 0.50%, while Realty down by 0.92%, FMCG down by 0.37%, Energy down by 0.33%, Auto down by 0.28%, Consumer discretionary down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.17%, Indusind Bank up by 1.13%, Ultratech Cement up by 1.03%, HDFC Bank up by 0.93% and Sun Pharma up by 0.76%. On the flip side, Titan Company down by 0.81%, ITC down by 0.70%, Reliance Industries down by 0.66%, Bharti Airtel down by 0.65% and Hindustan Unilever down by 0.61% were the top losers.

Meanwhile, Economic think-tank NCAER in its latest report stated that the business confidence has remained buoyant in the third quarter of the current financial year (Q3FY22), though the pace of rise was moderated by a spurt in the number of COVID-19 cases in December 2021. It noted that business sentiments recovered in the October-December quarter of 2021–22 as compared to those prevailing in the July-September quarter. The NCAER-NSE Business Confidence Index (BCI) increased by 6 per cent on a quarter-on-quarter (q-o-q) basis and by 46.6 per cent on a year-on-year (y-o-y) basis. It said ‘as compared to the last quarter, there was a moderation in the pace of increase of the BCI. Business sentiments were affected in the last week of December as the number of COVID-19 cases went up and travel restrictions came into place’.

The upward movement in the BCI was driven by an improvement in sentiments for all the four components of the BCI, namely ‘overall economic conditions will improve in the next six months’, ‘financial position of firms will improve in the next six months’, ‘present investment climate is positive as compared with six months ago’ and ‘present capacity utilisation is close to or above the optimal level’. It added ‘sentiments were broadly buoyant across sectors with the exception of the consumer non-durables sector, where the BCI fell by 2 per cent in 2021–22:Q3 on a quarter-on-quarter basis. The plateauing of business sentiments in this key sector lends credence to the K-shaped recovery of various stakeholders’.

The variation in business sentiments across sectors narrowed in the third quarter of 2021–22 as compared to that in previous quarter. The NCAER-NSE Political Confidence Index (PCI) remained virtually unchanged between the second and third quarter at 107.8. However, there was a 43.1 per cent year-on-year growth in the PCI in the third quarter of 2021-22. The shares of positive responses rose for three components of the PCI - ‘managing the exchange rate, ‘managing inflation’, and ‘managing a conducive political climate’. It fell for three of the components - ‘pushing economic reforms forward’, ‘external trade negotiations’ and ‘managing government finances’, and remained unchanged for the remaining two components - ‘managing overall economic growth’ and ‘managing unemployment’.

The CNX Nifty is currently trading at 17600.65, up by 40.45 points or 0.23% after trading in a range of 17480.30 and 17604.00. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.60%, ONGC up by 2.51%, Tata Steel up by 2.50%, JSW Steel up by 1.75% and Grasim Industries up by 1.65%. On the flip side, Hero MotoCorp down by 1.42%, Tata Consumer Products down by 1.14%, Bajaj Auto down by 0.76%, ITC down by 0.75% and Bharti Airtel down by 0.66% were the top losers.

Asian markets are trading in green; Nikkei 225 rose 57.49 points or 0.21% to 27,298.80, Straits Times added 6.47 points or 0.20% to 3,322.46, Hang Seng surged 655.05 points or 2.75% to 24,457.31, KOSPI advanced 23.22 points or 0.86% to 2,731.04 and Jakarta Composite was up by 25.53 points or 0.38% to 6,709.38.