Bourses erase losses in late afternoon session

Indian equity benchmarks erased all the losses and traded above neutral lines in late afternoon session. The broader markets -- BSE Midcap and Smallcap indices however, continued to trade lower. In stock specific, PVR shined on inking merger deal with Inox Leisure. Traders took support after India and the UAE have agreed to set up a technical council on Investment, Trade Promotion and Facilitation, as part of the Comprehensive Economic Partnership Agreement (CEPA) signed between the two countries last month. The objectives of the council are to promote and enhance investment and trade cooperation and facilitation between the parties; monitor investment and trade relations, identify opportunities for expanding investment and trade, and to identify issues relevant to investment and trade that may be appropriate for further discussion.

On the global front, Asian markets were trading mixed amid lingering worries surrounding the Covid-19 pandemic, inflation and the Russian invasion of Ukraine. Amid increased concerns about high commodity prices and inflation growth, investors awaited speeches by several key Fed officials this week for clues on the pace of tightening. European markets were trading higher led by interest rate-sensitive banks and insurers as government bond yields continued to rise, while hopes of a peace deal in the Ukraine crisis further aided sentiment. 

The BSE Sensex is currently trading at 57438.90, up by 76.70 points or 0.13% after trading in a range of 56825.09 and 57582.20. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.57%, while Small cap index was down by 0.47%.

The top gaining sectoral indices on the BSE were Metal up by 1.18%, Energy up by 0.89%, Oil & Gas up by 0.80%, Telecom up by 0.76% and Bankex was up by 0.64%, while Consumer Durables down by 0.89%, Healthcare down by 0.77%, Capital Goods down by 0.70%, IT down by 0.56% and Industrials was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.34%, ICICI Bank up by 1.69%, ITC up by 1.62%, Axis Bank up by 1.35% and Tata Steel up by 1.06%. On the flip side, Dr. Reddy's Lab down by 2.39%, Nestle down by 2.22%, HDFC down by 1.92%, HCL Tech down by 1.23% and Larsen & Toubro down by 0.97% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained an improving outlook for the mid-corporate (MEC) sector for FY23. In line with the agency’s expectations, operating margins have improved in FY22 across some key sectors; however, it has come at the cost of a working capital build-up. The Guaranteed Emergency Credit Line (GECL) has helped these entities to meet the liquidity gap.

According to the report, MECs in some of the key sectors such as steel and textiles have witnessed a V-shaped recovery in FY22 while hospitality and auto ancillary remain weak. Ind-Ra has provided a snapshot of the sector-wise performance of MECs, focusing on the key sectors where these entities are largely concentrated.

The agency has specifically focused on how the liquidity and overall performance pre- and post-COVID-19 and the outlook for FY23.

The rating agency maintained a stable rating outlook for its MEC-rated portfolio for FY23, on account of the fair amount of liquidity support and also the major initiatives been taken by the finance ministry in rendering its support in the form of GECL and one-time loan recasting, leading to the frequency of negative rating actions likely to mellow down in FY23.

The CNX Nifty is currently trading at 17173.70, up by 20.70 points or 0.12% after trading in a range of 17003.90 and 17226.10. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.73%, Bharti Airtel up by 2.40%, ICICI Bank up by 1.69%, ITC up by 1.68% and Hindalco up by 1.43%. On the flip side, Dr. Reddy's Lab down by 2.44%, Nestle down by 2.16%, UPL down by 2.12%, HDFC down by 2.02% and Divi's Lab down by 1.55% were the top losers.

Asian markets were trading mixed, Hang Seng increased 280.09 points or 1.31% to 21,684.97, Jakarta Composite soared 47.07 points or 0.67% to 7,049.60, Straits Times advanced 11.35 points or 0.33% to 3,425.04 and Shanghai Composite was up by 2.26 points or 0.07% to 3,214.50.  On the flip side, KOSPI fell 0.42 points or 0.02% to 2,729.56, Taiwan Weighted dropped 156.94 points or 0.89% to 17,520.01 and Nikkei 225 was down by 205.95 points or 0.73% to 27,943.89.

European markets were trading higher, UK’s FTSE 100 increased 23.94 points or 0.32% to 7,507.29, France’s CAC increased 72.63 points or 1.11% to 6,626.31 and Germany’s DAX was up by 194.81 points or 1.36% to 14,500.57.