Gaining momentum continues over Dalal Street

Gaining momentum continued over the Dalal Street in late morning session, with both Sensex and Nifty holding strong gains, on the back of positive cues from other Asian markets. Trader were optimistic, amid a private reports stating that real-time payments are forecast to boost India's GDP by $45.9 billion in 2026 as real-time payments transaction volumes are set to exceed 206 billion by that time. Adding more comfort, the Ministry of Commerce and Industry said that there is a five-fold increase in the grant of patent annually, and a four-fold rise in trademark registration every year since 2014. It said that to modernise the Intellectual Property (IP) office and reduce legal compliances, along with facilitating filing of IP applications, the government has adopted several administrative and legislative measures.

On the global front, Asian markets were trading mostly in green, after South Korea's gross domestic product gained a seasonally adjusted 0.7 percent on quarter in the first three months of 2022, the Bank of Korea said in Tuesday's advance estimate. That exceeded expectations for an increase of 0.6 percent following the 1.2 percent expansion in the previous three months. Real gross domestic income increased 0.6 percent on quarter and 0.1 percent on year.

The BSE Sensex is currently trading at 57229.52, up by 649.63 points or 1.15% after trading in a range of 57066.24 and 57333.49. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.56%, while Small cap index was up by 1.00%.

The top gaining sectoral indices on the BSE were Auto up by 2.55%, Power up by 2.14%, Realty up by 2.02%, Utilities up by 1.99% and FMCG up by 1.58%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.03%, Indusind Bank up by 3.43%, Bajaj Finance up by 2.23%, SBI up by 2.12% and Infosys up by 1.85%. On the flip side, Asian Paints down by 0.17% was the only loser.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has warned that the ongoing headwinds like war-triggered inflation, rate tightening by RBI and weak rupee will lead to a Rs 60,000 crore increase in 'risky debt' in FY23. Defining 'risky debt' as borrowings by companies having a net leverage or debt to operating profit ratio of more than five times, it said the ongoing troubles will take the stock of such loans to Rs 6.9 lakh crore by end of FY23, as against the Rs 6.3 lakh crore it would have been but for the Russian invasion of Ukraine.

According to the report, commodity consumers are likely to experience a contraction in margin by up to 3 percentage points in FY23, given the difficulty in passing on the price increase to users without impacting volumes. However, it said margins are likely to improve for commodity producers by up to 4 percentage points in FY23, on account of higher realisations amid higher commodity prices, although energy costs will impact producers more, given the energy intensive nature of their operations.

The report said there will likely be an asymmetric impact across corporates and also among companies in sectors, and added that large entities will show resilience on account of healthy balance sheets, easy access to financing and pricing power, while small and medium entities could face headwinds due to buoyant commodity prices and firming interest rates. It stated that a continued rupee depreciation is likely to exacerbate the challenges for both Indian importers and foreign currency borrowers in FY23. It pointed out that the modest improvement in demand can help entities in import-oriented sectors or net importers to pass on the impact of weak rupee to their customers.

The CNX Nifty is currently trading at 17162.25, up by 208.30 points or 1.23% after trading in a range of 17110.30 and 17181.85. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 4.26%, Hero MotoCorp up by 4.11%, Mahindra & Mahindra up by 4.04%, Adani Ports & SEZ up by 3.75% and Indusind Bank up by 3.45%. On the flip side, ONGC down by 1.39% and Asian Paints down by 0.15% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 375.62 points or 1.89% to 20,244.96, Nikkei 225 surged 201.64 points or 0.76% to 26,792.42, Taiwan Weighted strengthened 56.35 points or 0.34% to 16,677.25, Shanghai Composite gained 27.42 points or 0.94% to 2,955.93 and KOSPI rose 13.52 points or 0.51% to 2,670.65. On the flip side, Straits Times tumbled 6.37 points or 0.19% to 3,333.22 and Jakarta Composite lost 18.42 points or 0.26% to 7,197.56.