Positive trade continues over Dalal Street

Positive trade continued over the Dalal Street in late morning session, with both Sensex and Nifty holding notable gains, on the back of positive cues from other Asian markets. Traders remained optimistic, as India is planning to set up “digital only” banks and non-banking financial companies (NBFCs) to ensure that business continuity in the lending system is not affected even in exceptional times. Besides, the government has set the foodgrain production target at a record level of 328 million tonnes for the 2022-23 crop year on the back of good monsoon rains. The target is 3.8 per cent higher compared to previous year's output.

On the global front, Asian markets were trading mostly in green, after Japan's industrial production rose more than estimated in February. The final data from the Ministry of Economy, Trade and Industry said that industrial production grew a seasonally adjusted 2.0 percent monthly in February. In the initial estimate, output rose 0.1 percent. Shipments remained unchanged monthly in February. In the initial estimate, shipments fell 1.3 percent.

The BSE Sensex is currently trading at 56866.48, up by 403.33 points or 0.71% after trading in a range of 56521.33 and 57036.26. There were 19 stocks advancing against 10 stocks declining, while 1 stock remained unchnaged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Auto up by 1.61%, Energy up by 1.58%, TECK up by 1.51%, IT up by 1.27% and Oil & Gas up by 1.09%, while Bankex down by 0.33%, Capital Goods down by 0.28% and PSU down by 0.26% were the only losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.55%, Maruti Suzuki up by 2.36%, Reliance Industries up by 2.30%, Ultratech Cement up by 2.25% and Bharti Airtel up by 2.15%. On the flip side, Bajaj Finance down by 2.76%, Power Grid down by 1.51%, ICICI Bank down by 1.15%, Larsen & Toubro down by 1.01% and ITC down by 0.99% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that financial conditions are going to tighten in the country over the next few months due to the likely increase in capital outflows, driven by rising external shocks, coupled with greater domestic vulnerability.

The agency said its Financial Conditions Index (FCI) dropped below the zero-mark in March 2022, indicating a deterioration in domestic financial conditions. In March, the financial conditions were not only tighter than the previous month but also relatively more stressed compared to the average conditions in the past decade. It noted that the country's vulnerability critically hinges on crude oil prices because they affect its major macroeconomic indicators, including the gross domestic product, inflation, current account deficit, rupee and, in some cases, fiscal deficit.

However, the report said measures to bring down the current account deficit and strengthen foreign exchange reserves will help the country to deal with any external shock. It also said so far, the RBI's accommodative policy has provided some cushion. However, rising inflation and external risks will make the central bank tighten its policy this fiscal. The RBI has already started the process of normalisation by restoring the LAF (Liquidity Adjustment Facility) policy corridor to its pre-pandemic width, and indicating withdrawal from accommodative stance in the coming months.

The CNX Nifty is currently trading at 17075.95, up by 117.30 points or 0.69% after trading in a range of 16978.95 and 17137.45. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.48%, BPCL up by 2.47%, Maruti Suzuki up by 2.26%, Dr. Reddy's Lab up by 2.23% and Tata Motors up by 2.14%. On the flip side, Bajaj Finance down by 2.68%, Power Grid down by 1.40%, Larsen & Toubro down by 1.25%, ICICI Bank down by 1.14% and ONGC down by 1.10% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 231.72 points or 0.86% to 27,216.81, Hang Seng increased 172.30 points or 0.82% to 21,200.06, Taiwan Weighted strengthened 69.98 points or 0.41% to 17,063.38, Straits Times advanced 23.06 points or 0.7% to 3,330.19 and KOSPI rose 4.66 points or 0.17% to 2,723.55. On the flip side, Jakarta Composite lost 5.58 points or 0.08% to 7,193.65 and Shanghai Composite declined 6.80 points or 0.21% to 3,187.23.