Local equities extend opening gains in early deals; Nifty reclaims 17,100 mark

Domestic equity indices made positive start on Wednesday, after a sharp sell-off in the previous session, tracking firm global cues. Soon, markets extend their gains and are trading in fine-fettle in early deals on account of buying in all the sector indices led by Energy, Auto and Oil & Gas. Traders took encouragement as describing the Indian economy's recovery from the COVID-19 pandemic as distinct and pronounced, Finance Minister Nirmala Sitharaman exuded confidence about India posting robust economic growth this decade. Separately, she said the US-India relationship is at its best and will strengthen the global order in these challenging times.

Most of the Asian markets traded higher following the broadly positive cues overnight from Wall Street, as traders reacted positively to some of the latest corporate earnings news and also picked up stocks at a bargain after the recent drop in the market. However, the escalation in the Russia-Ukraine conflict and the prospects of increasing stringent sanctions to be imposed on Russia by the Western countries rendered the mood cautious.

Back home, OMCs stocks were in focus as Fitch Ratings said further hikes in retail fuel prices may be required for state-run oil marketing companies' marketing margins to reach pre-November levels. In scrip specific development, Mastek gained as it posted 16.5 per cent growth in Q4FY22 consolidated net profit at Rs 88.23 crore when compared with Rs 75.71 crore in Q4FY21.

The BSE Sensex is currently trading at 57008.69, up by 545.54 points or 0.97% after trading in a range of 56521.33 and 57036.26. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 1.03%, while Small cap index was up by 1.36%.

The top gaining sectoral indices on the BSE were Energy up by 2.24%, Auto up by 2.15%, Oil & Gas up by 1.59%, Power up by 1.54%, Consumer discretionary up by 1.40%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Reliance Industries up by 3.11%, Maruti Suzuki up by 2.76%, Wipro up by 1.49%, TCS up by 1.46% and Bharti Airtel up by 1.42%. On the flip side, Power Grid down by 1.12%, Larsen & Toubro down by 0.77%, Kotak Mahindra Bank down by 0.76%, Bajaj Finance down by 0.63% and Indusind Bank down by 0.21% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) report has slashed its gross domestic product (GDP) growth forecast of India to 8.2 per cent for fiscal year 2022-23 (FY23) from 9 per cent forecasted earlier. It said that higher commodity prices will weigh on private consumption and investment. This was one of the steepest cuts for emerging economies compared to the IMF’s January WEO forecasts.

The agency cut its global growth outlook for calendar year 2022 to 3.6 per cent from 4.4 per cent, saying that global economic prospects have worsened significantly due to commodity price volatility and disruption of supply chains caused by the war in Europe and added that both Russia and Ukraine could experience large GDP contractions.

As per the report, the multilateral institution cut the calendar year 2022 (or fiscal year 2022-23 in case of India and some other nations) GDP forecast for almost all developed and emerging economies. Notable downgrades to the 2022 forecast include Japan (0.9 percentage point) and India (0.8 percentage point), reflecting in part weaker domestic demand - as higher oil prices are expected to weigh on private consumption and investment - and a drag from lower net exports.

It also expected India’s FY23 current account deficit to be 3.1 per cent, compared with 1.5 per cent expected for FY22. There was also a cut in India’s FY24 GDP growth forecast to 6.9 per cent from 7.1 per cent estimated in IMF’s January report. The IMF’s projection of India’s retail inflation is now at 6.1 per cent, higher than the Reserve Bank of India’s (RBI’s) forecast of 5.7 per cent.

The CNX Nifty is currently trading at 17103.05, up by 144.40 points or 0.85% after trading in a range of 16978.95 and 17131.75. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 4.13%, Maruti Suzuki up by 3.05%, Reliance Industries up by 2.92%, Tata Motors up by 2.86% and BPCL up by 2.37%. On the flip side, Larsen & Toubro down by 1.16%, Apollo Hospital down by 1.13%, Power Grid Corp down by 0.97%, ONGC down by 0.79% and Bajaj Finance down by 0.74% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 171.18 points or 0.63% to 27,156.27, Straits Times added 21.17 points or 0.64% to 3,328.30, Hang Seng advanced 157.37 points or 0.75% to 21,185.13, Taiwan Weighted rose 54.28 points or 0.32% to 17,047.68 and Jakarta Composite edged up by 26.92 points or 0.37% to 7,226.15. On the other hand, KOSPI fell 1.54 points or 0.06% to 2,717.35 and Shanghai Composite was down by 6.80 points or 0.21% to 3,187.23.