Benchmarks continue to trade in green in morning deals

Indian equity benchmarks erased some gains but continued to trade in green in morning deals, tracking gains in index majors Mahindra & Mahindra, Bajaj Finance and Asian Paints amid a sharp fall in the global oil prices. Traders took note of union Minister of State for MSME Bhanu Pratap Singh Verma’s statement that Government has been putting special focus to bring MSMEs into the defence supply chain and thereby boosting self-reliance of the country. He said MSMEs can also contribute to the rapidly increasing defence exports market. However, gains remain capped as India Ratings and Research (Ind-Ra) lowered India’s Gross Domestic Product (GDP) growth forecast to 7-7.2 per cent for FY23, from 7.6 per cent projected earlier, citing the rising uncertainty over Russia-Ukraine war and the resultant dampening of consumer sentiment.

On the global front, Asian markets are trading mostly in red after Chinese manufacturing weakened and Russian shelling around Ukraine’s capital shook hopes of progress in peace talks. Back home, agriculture industry stocks remained in watch as 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.

The BSE Sensex is currently trading at 58758.45, up by 74.46 points or 0.13% after trading in a range of 58620.78 and 58890.92. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.34%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Telecom up by 1.71%, Oil & Gas up by 1.14%, FMCG up by 0.83%, Energy up by 0.68% and Utilities up by 0.67%, while Healthcare down by 0.42%, TECK down by 0.17%, Capital Goods down by 0.13%, IT down by 0.08% and Realty down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.70%, Bajaj Finance up by 1.65%, Asian Paints up by 1.29%, Axis Bank up by 1.27% and HDFC up by 1.05%. On the flip side, Reliance Industries down by 0.97%, Infosys down by 0.93%, Larsen & Toubro down by 0.35%, Wipro down by 0.30% and Bharti Airtel down by 0.27% were the top losers.

Meanwhile, The International Monetary Fund (IMF) in its a paper on the Review of the Institutional View (IV) on the Liberalization and Management of Capital Flows has said that 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.

IMF's First Deputy Managing Director, Gita Gopinath has said capital flows have several benefits. They finance needed investments. They help insure against some kinds of risks. There are many benefits to countries from having capital flows in India and also benefits from receiving those capital flows. 

Gopinath noted that there are other kinds of financial risks associated with having large amounts of capital inflows. In the case of India, there are a large number of capital restrictions already in place. The Indian government uses these restrictions quite proactively in dealing when the external environment changes. So, by putting restrictions on the amount of external borrowing the corporates can do, that is an instrument that they use. And they use it in response to changing external circumstances.

She stated, so, there are quite a few safeguards that the Indian economy has in terms of capital flows. But of course, it is still in the process of liberalizing its capital accounts. And as its financial markets deepen, it's financial institutions deepen, it could move towards more, allowing for more forms of capital flows.

The CNX Nifty is currently trading at 17525.90, up by 27.65 points or 0.16% after trading in a range of 17486.40 and 17559.80. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 1.90%, Bajaj Finance up by 1.64%, Mahindra & Mahindra up by 1.59%, Adani Ports &SEZ up by 1.45% and ONGC up by 1.36%. On the flip side, Hindalco down by 3.19%, Apollo Hospital down by 1.70%, Reliance Industries down by 0.90%, Cipla down by 0.89% and Eicher Motors down by 0.61% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 179.54 points or 0.81% to 22,052.49, Nikkei 225 slipped 117.91 points or 0.42% to 27,909.34, Taiwan Weighted dropped 15.19 points or 0.09% to 17,725.37, Straits Times trembled 7.80 points or 0.23% to 3,434.81 and Shanghai Composite declined 3.41 points or 0.1% to 3,263.19.

On the other hand, KOSPI rose 10.62 points or 0.39% to 2,757.36 and Jakarta Composite soared 14.39 points or 0.2% to 7,067.58.