Domestic indices trade higher in early deals; Nifty reclaims 17,550 mark

Indian equity benchmarks extended their precious session’s gains with positive start on Thursday but soon turned volatile amid weak global cues. Volatility may remain in the markets during today’s trading session on account of the monthly future & options expiry. Now, markets are trading higher with notable gains of around 0.30% each in early deals on account buying in Telecom, Oil & Gas and FMCG counters. Some support came in as the International Monetary Fund said India, which has received a record number of foreign direct investment during the last few years despite COVID-19 crisis, has quite a few safeguards in place to mitigate the risks from capital flows. Adding optimism, Union Minister of State for Commerce Anupriya Singh Patel said India’s export of agricultural products have touched $40.87 billion in the first 10 months of the current fiscal and it is 25.14 percent more than the financial year.

Most of the Asian markets are trading lower, following Wall Street's overnight stumble, after Chinese manufacturing weakened and Russian shelling around Ukraine’s capital shook hopes of progress in peace talks. Back home, jewellery industry stocks were in focus as rating agency Crisil said the revenue of gold jewellery retailers is likely to increase by 12-15 per cent in 2022-23 on steady demand and sustained high prices of gold. In scrip specific development, Axis Bank traded higher amid reports that the bank will buy the retail business of Citibank India in an all-cash deal for Rs 12,325 crore.

The BSE Sensex is currently trading at 58856.99, up by 173.00 points or 0.29% after trading in a range of 58620.78 and 58884.52. 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 0.49%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Telecom up by 1.72%, Oil & Gas up by 1.00%, FMCG up by 0.73%, Bankex up by 0.63%, Energy up by 0.59%, while Healthcare down by 0.15% and TECK down by 0.09% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.41%, Mahindra & Mahindra up by 1.88%, HDFC up by 1.59%, Axis Bank up by 1.21% and Asian Paints up by 0.95%. On the flip side, Infosys down by 0.78%, Reliance Industries down by 0.69%, Power Grid down by 0.30%, Wipro down by 0.27% and Larsen & Toubro down by 0.24% were the top losers.

Meanwhile, citing the rising uncertainty over Russia-Ukraine war and the resultant dampening of consumer sentiment, India Ratings and Research (Ind-Ra) has lowered India’s Gross Domestic Product (GDP) growth forecast to 7-7.2 per cent for FY23, from 7.6 per cent projected earlier. It said that since the duration of the war continues to be uncertain, in the first scenario crude oil prices could remain elevated for three months, and in the second case for six months.

India Ratings chief economist Devendra Pant and principal economist Sunil Kumar Sinha said if crude prices remain high for three months, FY23 GDP could grow by 7.2 per cent; in case it lasts longer, then growth will be 7 per cent, down from 7.6 per cent projected earlier. They said the size of the economy in FY23 will be 10.6 per cent and 10.8 per cent lower than the FY23 GDP trend value in these two scenarios, respectively.

Ind-Ra expects private consumption spends to grow at 8.1 per cent and 8 per cent in scenario 1 and 2, respectively, in FY23, as against its earlier projection of 9.4 per cent. Similarly, investment demand, as measured by the gross fixed capita formation, is the second-largest component (27.1 per cent) of GDP from the demand side. Private capex by large corporates, which has been down and out over the past several years, has shown some promise lately in view of the rollout of the production-linked incentive scheme and increased manufacturing sector capacity utilisation driven by higher exports.

However, it expects the surge in commodity prices and disruptions in global supply chain caused by the Ukraine war to take a toll on sentiments and it’s likely this capex may get deferred till more clarity emerges with respect to the conflict. However, government capex is unlikely to be dented. On the inflation front, it warn that a 10 per cent rise in oil prices without factoring in currency depreciation, is expected to push up retail inflation by 42 bps and wholesale inflation by 104 bps. Similarly, a 10 per cent jump in sunflower oil without factoring in currency depreciation is expected to push retail inflation by 12.6 bps and wholesale inflation by 2.48 bps. Both these events can increase the retail and wholesale inflation by 55 bps and 109 bps, respectively.

The CNX Nifty is currently trading at 17552.70, up by 54.45 points or 0.31% after trading in a range of 17486.40 and 17559.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 2.34%, Mahindra & Mahindra up by 2.23%, HDFC up by 1.61%, Tata Consumer Products up by 1.46% and Axis Bank up by 1.37%. On the flip side, Hindalco down by 3.38%, Cipla down by 0.77%, Apollo Hospital down by 0.71%, Power Grid down by 0.62% and Reliance Industries down by 0.57% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 146.71 points or 0.52% to 27,880.54, Straits Times fell 9.30 points or 0.27% to 3,433.31, Hang Seng lost 180.13 points or 0.81% to 22,051.90, Taiwan Weighted declined 13.42 points or 0.08% to 17,727.14 and Shanghai Composite was down by 3.41 points or 0.10% to 3,263.19. On the other hand, KOSPI rose 12.60 points or 0.46% to 2,759.34 and Jakarta Composite was up by 24.22 points or 0.34% to 7,077.41.