Bourses trim losses in late afternoon session

Indian equity markets trimmed most of their losses in late afternoon session but continued to trade below neutral line. Traders were seen piling up positions in Metal, Basic Materials and Utilities sectors while selling was witnessed in Realty, Auto and PSU sectors’ stocks. Weakness was also visible in the broader indices i.e. the BSE Mid cap index and Small cap index. Sector wise, power sector remained in focused, as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook for the power sector for FY23, as it believes the overall plant load factor (PLF) of thermal power plants would continue to improve and reach closer to 60% in FY23. In scrip specific developments, Lupin surged as it has reported a rise of 24.48% in its net profit at Rs 545.52 crore for third quarter ended December 31, 2021 as compared to Rs 438.25 crore for the same quarter in the previous year and ITC rose as it has reported a rise of 14.82% in its net profit at Rs 4,118.80 crore for third quarter ended December 31, 2021.

On the global front, Asian markets were trading in green after a historic plunge in the stock price of Facebook’s parent company helped yank other tech stocks lower on Wall Street. European markets were trading mostly in green despite warnings from the Bank of England (BoE) governor that the UK faces tough times ahead.

The BSE Sensex is currently trading at 58729.71, down by 58.31 points or 0.10% after trading in a range of 58446.95 and 58943.62. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.36%, while Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were Metal up by 1.52%, Basic Materials up by 0.83%, Utilities up by 0.47%, FMCG up by 0.31% and Power was up by 0.30%, while Realty down by 1.72%, Auto down by 0.83%, PSU down by 0.74%, Bankex down by 0.59% and Consumer Discretionary was down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.46%, Tata Steel up by 1.43%, Sun Pharma up by 1.09%, Asian Paints up by 0.90% and HCL Tech up by 0.88%. On the flip side, SBI down by 1.67%, Mahindra & Mahindra down by 1.64%, NTPC down by 0.92%, Kotak Mahindra Bank down by 0.89% and HDFC down by 0.86% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook for the power sector for FY23, as it believes the overall plant load factor (PLF) of thermal power plants would continue to improve and reach closer to 60% in FY23. This is given the consistent growth in power demand and continued dependence on coal-based generation in the absence of any major increase in the capacity additions in any other sector except renewables.

Further, the rating agency said that a lower-than-expected addition in FY23 in renewables would aid the PLF recovery. Ind-Ra however expects the demand growth to come back to a normal level of 6%-7% in FY23, given a higher base. The impact of third covid wave remains lower on power demand, given the less stringent curbs imposed by local/state governments, although any stringent lockdowns in case of the emergence of any strong covid wave could derail the growth in power demand.

As per the report, coal availability could pose a risk to the overall demand and thus PLF recovery, given the higher reliance on domestic coal as international prices remain high. The domestic coal availability to the power sector would remain dependent on an improvement in the domestic coal production and its allocation to the power sector both of which improved in 9MFY22.

The CNX Nifty is currently trading at 17544.25, down by 15.95 points or 0.09% after trading in a range of 17462.55 and 17617.80. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.57%, Divi's Lab up by 2.18%, ONGC up by 1.49%, Ultratech Cement up by 1.43% and Tata Steel up by 1.35%. On the flip side, Hero MotoCorp down by 2.09%, SBI down by 1.67%, Mahindra & Mahindra down by 1.66%, Eicher Motors down by 1.54% and Bajaj Auto down by 1.36% were the top losers.

Asian markets were trading in green, Hang Seng increased 771.03 points or 3.24% to 24,573.29, Nikkei 225 surged 198.68 points or 0.73% to 27,439.99, Jakarta Composite soared 47.54 points or 0.71% to 6,731.39, KOSPI rose 42.44 points or 1.57% to 2,750.26, Jakarta Composite soared 47.54 points or 0.71% to 6,731.39 and Straits Times was up by 10.73 points or 0.32% to 3,326.72.

European markets were trading mostly in green, UK’s FTSE 100 increased 47.44 points or 0.63% to 7,576.28 and France’s CAC was up by 22.36 points or 0.32% to 7,027.99. On the flip side, Germany’s DAX was down by 62.05 points or 0.4% to 15,306.42.