Benchmarks continue to trade higher in morning deals

Indian equity benchmarks continued to trade higher in morning deals, led by gains in Energy, Healthcare and TECK shares. Sentiments remained positive as the Reserve Bank of India (RBI) has extended the interest equalisation scheme for pre and post shipment rupee credit for Ministry of Small and Medium Enterprises (MSME) exporters till March 2024 with the objective of boosting outbound shipments. Traders overlooked rating agency Icra’s report in which it has warned of serious downside risks to the economy in 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. On the global front, Asian markets are trading mostly in green even as the escalation in the Russia-Ukraine crisis and stringent sanctions on Russia rendered the mood cautious.

The BSE Sensex is currently trading at 53974.34, up by 550.25 points or 1.03% after trading in a range of 53367.52 and 54019.60. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.12%, while Small cap index was up by 1.32%.

The top gaining sectoral indices on the BSE were Energy up by 2.20%, Healthcare up by 1.69%, TECK up by 1.54%, IT up by 1.53% and Telecom up by 1.40%, while Metal down by 0.86% and PSU down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.96%, Tech Mahindra up by 2.82%, Sun Pharma up by 2.74%, Dr. Reddy's Lab up by 2.66% and Hindustan Unilever up by 2.25%. On the flip side, Power Grid Corporation down by 2.36%, Kotak Mahindra Bank down by 1.16%, NTPC down by 1.09%, Asian Paints down by 1.04% and Tata Steel down by 0.91% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) has said that it has 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. It stated semiconductor chip shortages could persist for the next few quarters while improving gradually. It underlined the ongoing geopolitical tensions amid Russia-Ukraine situation could increase commodity prices, crude oil prices, and exacerbate supply chain issues.

Furthermore, it said a slower recovery in rural sales and further price hikes by original equipment manufacturers could act as possible headwinds for the sector.
It mentioned domestic automobile sales volume is expected to grow 5-9 per cent year-on-year in 2022-23, after three consecutive years of decline, and is likely to fall 5-8 per cent in 2021-22. In the next fiscal year, passenger vehicle volume could grow 5-9 per cent driven by an intermittent improvement in consumer sentiments and continued preference for personal mobility, although supply chain issues could limit the growth. In 2021-22, it is likely to grow 8-12 per cent.

Increased cost of ownership, a slower revival in the purchasing power of lower-end consumers and a muted rural demand could limit two-wheelers growth at 5-8 per cent for next fiscal year, it said, adding in 2021-22 it is expected to decline 10-13 per cent. As for commercial vehicles (CVs), it said volumes are likely to grow 16-22 per cent in 2022-23 as compared to 20-24 per cent in this fiscal year, mainly supported by medium and heavy CVs, aided by an uptick in economic activities and increased infrastructure spending.

The CNX Nifty is currently trading at 16151.95, up by 138.50 points or 0.86% after trading in a range of 15990.00 and 16172.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.04%, Tech Mahindra up by 2.97%, Adani Ports &SEZ up by 2.93%, Sun Pharma up by 2.77% and Dr. Reddy's Lab up by 2.73%. On the flip side, Shree Cement down by 2.90%, Power Grid Corporation down by 2.52%, NTPC down by 1.16%, JSW Steel down by 1.12% and Coal India down by 1.08% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted strengthened 240.08 points or 1.43% to 17,065.33, Nikkei 225 surged 141.48 points or 0.57% to 24,932.43, Jakarta Composite soared 55.50 points or 0.81% to 6,869.68, Straits Times advanced 26.66 points or 0.85% to 3,175.52.

On the flip side, Shanghai Composite declined 35.36 points or 1.07% to 3,258.17 and Hang Seng decreased 454.64 points or 2.19% to 20,311.23.