Markets recover opening losses; trade firm in early deals

Indian equity benchmarks made negative start on Friday tracking weakness across global markets. Though, domestic indices soon recovered all of their opening losses and turned positive in early deals. Markets are trading firm with notable gains ahead of the industrial growth data to be out later in the day. Initially, sentiments got impacted with the Reserve Bank data showing that India Inc's direct overseas investment declined 67 per cent to $753.61 million in February this year. However, some support came in as bank credit grew by 7.9 per cent to Rs 116.27 lakh crore and deposits rose by 8.6 per cent to Rs 162.17 lakh crore in the fortnight ended February 25. Besides, the Income Tax department said Refunds worth over Rs 1.86 lakh crore have been issued to more than 2.14 crore taxpayers during the current financial year.

Global cues remained subdued with all the Asian markets traded lower as inflation worries mounted and Russia's invasion of its neighbor Ukraine entered the 16th day, with little signs of progress on a potential cease-fire agreement. Russia and Ukraine failed to make a breakthrough Thursday in their first top-level talks since Moscow's invasion two weeks ago.

Back home, jewellery industry related stocks were in focus as Gem Jewellery Export Promotion Council (GJEPC) said India’s gold imports bounced back to 1,067.72 tonnes in 2021 from 430.11 tonnes during 2020 when the demand was hit due to the COVID-19 pandemic. In scrip specific development, Lupin traded higher as it launched its first reference laboratory under the diagnostics division in Kolkata.

The BSE Sensex is currently trading at 55611.18, up by 146.79 points or 0.26% after trading in a range of 55049.95 and 55732.78. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.06%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Metal up by 1.27%, Basic Materials up by 0.91%, Bankex up by 0.62%, Realty up by 0.59%, Healthcare up by 0.58%, while Auto down by 0.49%, Consumer Durables down by 0.20%, FMCG down by 0.19%, IT down by 0.18%, Power down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.66%, Tata Steel up by 1.65%, Axis Bank up by 1.23%, Bajaj Finserv up by 1.02% and Bajaj Finance up by 0.93%. On the flip side, Nestle down by 1.09%, Maruti Suzuki down by 0.94%, Tech Mahindra down by 0.44%, Infosys down by 0.40% and Mahindra & Mahindra down by 0.33% were the top losers.

Meanwhile, rating agency Crisil in its latest report ‘India Outlook, Fiscal 2023′ has said that Indian economy is likely to grow by 7.8 per cent in 2022-23, mainly driven by the government’s drive to push infrastructure spending and likely increase in private capital expenditure. Though, it also cautioned that the ongoing Russia Ukraine war and rising commodity prices do pose a downside risk to the growth. The country is expected to register a growth rate of 8.9 per cent in the current fiscal ending March 31. It said ‘any potential upside due to the early end of a mild third wave of COVID-19 infections will be offset by the ongoing geopolitical strife stemming from Russia’s invasion of Ukraine, which is creating a dampening effect on global growth and pushing up oil and commodity prices. The risks to growth are also tilted to the downside’.

Crisil Chief Economist Dharmakirti Joshi said private consumption remains the weak link, owing to reduced direct fiscal policy support. As for the average Consumer Price Index (CPI)-based inflation, he said, it will stay firm at 5.4 per cent next fiscal - if the price of crude oil averages $85-90/barrel - and takes into account the excise duty cuts announced last year. However, upside risks will build if the geopolitical strife prolongs, keeping oil and commodity prices higher for longer. He said ‘we believe the fiscal policy will need to be deployed more aggressively than envisaged in the Union Budget for next fiscal. This can be done by increasing allocation for employment-generating schemes and food subsidy, and cutting duty on petroleum products’. He noted that this can be a relief bridge for those most affected by the pandemic till such time the virtuous cycle of investment-led growth plays out in the labour market, and private consumption demand becomes self-sustaining.

As per the report, the higher price of crude oil will widen India’s current account deficit to 2.2 per cent in fiscal 2023, it added that typically, a $10 increase in the price of crude oil raises the current account deficit to GDP ratio by about 40 basis points. It also stated the near-term impact of high oil prices on inflation, assuming a significant passthrough, will be more pronounced than on growth, and added that all bets are off if oil stays around or above $100/barrel for a prolonged period. The report said ‘across consumption segments, recovery curves have been staggered and income sentiment will be the key driver. As things stand, we expect India Inc to see revenue growth of 10-14 per cent next fiscal’. It said India’s investment focus is now shifting towards green capital expenditure, with an expected spend of over Rs 2.85 lakh crore per annum over fiscals 2023 to 2030, accounting for nearly 15-20 per cent of total investments - into the infrastructure and industrial sectors - per annum. It noted that this will further help push a supply-driven recovery for the economy as a whole.

The CNX Nifty is currently trading at 16674.90, up by 80.00 points or 0.48% after trading in a range of 16470.90 and 16675.60. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.54%, Bajaj Finserv up by 1.66%, Sun Pharma up by 1.55%, Axis Bank up by 1.52% and Tata Steel up by 1.40%. On the flip side, Tata Consumer Products down by 1.83%, Tata Motors down by 1.16%, Nestle down by 1.05%, Maruti Suzuki down by 0.75% and UPL down by 0.52% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 657.67 points or 2.56% to 25,032.73, Straits Times fell 0.56 points or 0.02% to 3,240.17, Hang Seng plunged 672.62 points or 3.22% to 20,217.64, Taiwan Weighted declined 173.03 points or 0.99% to 17,260.17, KOSPI lost 28.34 points or 1.06% to 2,651.98, Jakarta Composite weakened 45.25 points or 0.65% to 6,878.76 and Shanghai Composite was down by 71.17 points or 2.16% to 3,224.92.