Benchmarks continue to trade marginally in red in morning deals

Indian equity benchmarks continued to trade marginally in red in morning deals, tracking losses in index majors Titan Company, Maruti Suzuki and ITC amid a weak trend in Asian equities. Traders remained cautious with S&P Global Ratings in its report said rising commodity prices, further triggered by the Russia-Ukraine war, could moderate healthy recovery of the country’s economy, and put pressure on the Reserve Bank of India (RBI) to normalise its monetary policy faster than anticipated. However, losses remain capped as some support came with the Periodic Labour Force Survey (PLFS) indicated that employment in the country has increased by 22 per cent in the past seven years since 2013-14. As per PLFS, the rise in employment in IT, healthcare and eduction sectors reflects that employment opportunities were generated through various government programmes. Meanwhile, the government has proposed to tighten the norms for taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets.

On the global front, Asian markets are trading mostly in red amid hawkish U.S. monetary policy, shifts in Chinese economic policy, and ongoing ructions in commodity markets due to the war in Ukraine. Back home, airline industry’s stocks remained in watch as the Minister of State for Civil Aviation V K Singh stated that investments worth Rs 36,000 crore have been planned for the development of greenfield airports under the public-private partnership (PPP) model. He also cited ‘highly price-sensitive customers’ and high taxes on jet fuel as major challenges faced by the country's civil aviation sector.

The BSE Sensex is currently trading at 57497.72, down by 97.96 points or 0.17% after trading in a range of 57391.49 and 57845.37. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.14%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Telecom up by 0.72%, Realty up by 0.59%, Energy up by 0.48%, Oil & Gas up by 0.46% and Metal up by 0.26%, while Consumer Durables down by 1.40%, FMCG down by 0.69%, Consumer Discretionary down by 0.31%, Capital Goods down by 0.31% and Auto down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 0.95%, Reliance Industries up by 0.90%, Bharti Airtel up by 0.62%, Kotak Mahindra Bank up by 0.52% and Bajaj Finserv up by 0.29%. On the flip side, Titan Company down by 2.59%, Maruti Suzuki down by 1.73%, ITC down by 1.16%, Nestle down by 0.97% and HDFC down by 0.92% were the top losers.

Meanwhile, Moody’s Investors Service has said  that Indian companies’ value of investments in Russia’s oil and gas fields could be impaired as import bans and international sanctions may constraint future cash flow generating capacity. Oil and Natural Gas Corporation (ONGC), Oil India (OIL), Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) have invested in upstream oil and gas assets in Russia. While multinationals like BP and Shell have announced withdrawal from Russia after its invasion of Ukraine, Indian companies have not announced an exit from their Russian investments.

It said this will lead to a limited impairment in the value of investments immediately, especially under the current oil price environment. Indian firms have invested $16 billion in Russian assets such as the Sakhalin-1 oil and gas field in the far east. It stated they may face hurdles in receiving dividend payments but the impact on earnings will not be significant.

It mentioned that if an increasing number of Russian banks are excluded from the main financial messaging SWIFT system, Indian companies might not be able to receive future dividends from their upstream investments in Russia. However, even in a situation where the companies cannot access these cash flows, the impact on their financial profiles will not be significant. For most companies, dividend income from the Russian investments constitutes less than 5-6 per cent of consolidated EBITDA.

The CNX Nifty is currently trading at 17190.05, down by 32.70 points or 0.19% after trading in a range of 17169.25 and 17294.90. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were UPL up by 1.73%, Bajaj Auto up by 1.25%, SBI up by 1.01%, Reliance Industries up by 0.83% and Bharti Airtel up by 0.68%. On the flip side, Titan Company down by 2.68%, Maruti Suzuki down by 1.92%, Tata Consumer Product down by 1.73%, ITC down by 1.20% and Cipla down by 1.19% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 355.70 points or 1.62% to 21,590.25, Jakarta Composite lost 60.57 points or 0.86% to 6,989.12, Taiwan Weighted dropped 57.66 points or 0.33% to 17,641.40, Shanghai Composite declined 15.22 points or 0.47% to 3,235.04.

On the flip side, KOSPI rose 3.36 points or 0.12% to 2,733.02, Nikkei 225 surged 9.95 points or 0.04% to 28,120.34 and Straits Times advanced 18.21 points or 0.54% to 3,417.91.