Markets trade in fine fettle in early deals on Wednesday

Indian equity benchmarks made a positive start and are trading in fine fettle in early deals on Wednesday with frontline gauges recapturing their crucial 53,800 (Sensex) and 16,100 (Nifty) levels amid positive cues from other Asian markets. The session is also proving fruitful for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.95-1.25%. Sentiments got boost with report that the Agriculture Ministry is ready with a new central scheme to promote natural farming in the country with an estimated outlay of Rs 2,500 crore. The proposed new scheme on natural farming will soon be placed before the Cabinet for approval. Meanwhile, traders took note of the Reserve Bank has extended the interest equalisation scheme for pre and post shipment rupee credit for MSME exporters till March 2024 with the objective of boosting outbound shipments.

On the global front, Asian markets are mostly higher in early deals on Wednesday, despite the broadly negative cues overnight from Wall Street, amid the continued spike in crude oil prices and as traders picked up stocks at a bargain after the recent sell-off.  The US markets ended lower on Tuesday as President Joe Biden officially announced a U.S. ban on Russian imports of oil and energy.

Bank home, there were some reaction in auto stocks as India Ratings and Research (Ind-Ra) revised its outlook for the auto sector to 'neutral' from 'improving' for 2022-23, saying supply-side constraints and a muted rural demand will restrict growth. In stock specific developments, shares of airline companies -- InterGlobe Aviation and SpiceJet gained after the government announced resumption of international flights from March 27, 2022. The move is expected to boost international capacity and will help soften airfares, which have been soaring due to increased demand and rise in crude oil prices.

The BSE Sensex is currently trading at 53866.02, up by 441.93 points or 0.83% after trading in a range of 53367.52 and 53873.54. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.98%, while Small cap index up by 1.22%.

The top gaining sectoral indices on the BSE were IT up by 1.47%, TECK up by 1.39%, Healthcare up by 1.31%, Energy up by 1.30% and Industrials up by 1.25%, while Metal was down by 0.80% was only losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.15%, Tech Mahindra up by 2.04%, Maruti Suzuki up by 2.01%, Infosys up by 1.98% and Dr. Reddy's Lab up by 1.84%. On the flip side, Asian Paints down by 1.02%, Power Grid Corp down by 1.01%, Tata Steel down by 0.56%, Kotak Mahindra Bank down by 0.50% and NTPC down by 0.49% were the top losers.

Meanwhile, rating agency Icra in its latest report has said that it has warned of serious downside risks to the economy next fiscal (FY23) with runaway current account deficit, steep fall in the rupee and a hardening yields on government bonds, as a result of the Russian-Ukraine crisis and the resultant spike in crude and other commodity prices.

It stated that International crude oil prices have hit a 14-year high at USD 130 a barrel on March 7, up from USD 94 a barrel before the invasion of Ukraine by Russia, which is the world's third-largest oil producer, supplying 14 per cent of global production. The price of the Indian crude oil basket has averaged USD 114.6 a barrel so far in March, a steep 22.9 per cent surge from USD 93.3 a barrel in February.

It mentioned at the current crude level, the current account deficit is likely to widen by USD 14-15 billion (0.4 per cent of GDP) for every USD 10 per barrel rise in the average price. If the price averages USD 130 a barrel in FY23, then the CAD will widen to 3.2 per cent of GDP, crossing 3 per cent for the first time in a decade.   Accordingly, if the ongoing war pushes up the average price of the Indian crude oil basket in FY23 to USD 115 a barrel, the CAD is projected to widen to USD 100-105 billion or 2.8 per cent of GDP.

The CNX Nifty is currently trading at 16114.00, up by 100.55 points or 0.63% after trading in a range of 15990.00 and 16139.85. There were 36 stocks advancing against 13 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were Adani Ports &Special up by 2.20%, Sun Pharma up by 2.19%, Tech Mahindra up by 2.18%, Maruti Suzuki up by 1.89% and Infosys up by 1.84%. On the flip side, Power Grid Corp down by 1.67%, Shree Cement down by 1.38%, Asian Paints down by 1.03%, Tata Steel down by 0.82% and JSW Steel down by 0.76% were the top losers.

Asian markets are mostly trading in green; Taiwan Weighted strengthened 170.71 points or 1.01% to 16,995.96, Nikkei 225 surged 79.46 points or 0.32% to 24,870.41, Straits Times advanced 26.19 points or 0.83% to 3,175.05 and Jakarta Composite was up by 39.86 points or 0.58% to 6,854.04.

On the other side, Shanghai Composite declined 35.36 points or 1.07% to 3,258.17 and Hang Seng was down by 441.15 points or 2.12% to 20,324.72.