Indian markets trade firm in early deals; IT, TECK lead gainers

Indian equity benchmarks extended their previous session’s gains with positive start on Wednesday. Soon markets gained traction and are trading firm in early deals on account of buying in IT and TECK stocks. Some support came in as rating agency Icra has forecasted the economy to grow 12-13 per cent in the first quarter of the current fiscal, citing the second highest business activity index reading in 13 months in April. Traders took note of report that as taxpayers face technical glitches on the GST portal, the government has extended the due date for April tax payment till May 24 and has directed Infosys for early resolution of the problem.

On the global front, most of the Asian markets are trading higher following the broadly positive cues overnight from Wall Street, as traders indulged in buying after US Fed Chair Jerome Powell's positive comments about the strength of the economy and news of lifting of lockdown restrictions in China.

Back home, telecom stocks were in focus as Digital Communication Commission cleared auction of 5G spectrum with a validity of 20 years, but decided not to auction part of the millimetre band between 27.5 GHz to 28.5 GHz for the time being. In scrip specific developments, Jet Airways rose as it successfully operated all proving flights and is now eyeing the grant of air operator certificate (AOC) by aviation regulator DGCA. However, IOC fell on reporting a 31.4% drop in its Q4 net profit at Rs 6,021.88 crore due to a margin squeeze in petrochemicals and drop in auto fuel sales.

The BSE Sensex is currently trading at 54762.58, up by 444.11 points or 0.82% after trading in a range of 54409.53 and 54782.32. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.01%, while Small cap index was up by 1.29%.

The top gaining sectoral indices on the BSE were IT up by 1.88%, TECK up by 1.59%, Utilities up by 1.50%, Power up by 1.45%, Telecom up by 1.03%, while Metal down by 0.18% was the sole losing index on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.34%, Axis Bank up by 2.15%, Infosys up by 2.03%, Bajaj Finance up by 1.98% and Wipro up by 1.62%. On the flip side, Power Grid down by 1.05%, NTPC down by 0.83%, ITC down by 0.13% and Nestle down by 0.08% were the top losers.

Meanwhile, rating agency Icra has forecasted the Indian economy to grow 12-13 per cent in the first quarter of the current fiscal (Q1FY23), citing the second highest business activity index reading in 13 months in April. However, it has maintained its annual GDP projection at 7.2 per cent for this fiscal citing worries over inflation and the resultant RBI tightening. Icra Chief Economist Aditi Nayar said ‘Our business activity monitor for April at 115.7 indicates that activity was roughly 16 per cent higher than the year ago (period) and pre-COVID levels in spite of the global headwinds’.

She said this high growth may persist in May, especially on an annualised basis, which should translate into a double-digit GDP expansion in Q1 at 12-13 per cent. However, this may not sustain and the annual growth in volume and activity may moderate. According to her, higher input costs may dampen GVA growth to single-digits. She said ‘Therefore, we maintain our GDP growth forecast at 7.2 per cent for FY23’. Citing rising inflation worries, she said the consumer price index is expected to average at 6.3-6.5 per cent this fiscal.

She said the biggest upside risks to inflation and growth come from the runaway fuel prices and the impact of the war in Ukraine. If the war does not de-escalate in the near term, the impact will be much farther than anticipated. This is also the primary reason for maintaining low GDP growth forecast at 7.2 per cent for the full year and higher one on a low base effect. On the interest rate front, she said the central bank is expected to hike rates by 25 basis points each in the June and August policy reviews and September action will depend on the direction of the war and its impact on the commodity prices.

The CNX Nifty is currently trading at 16394.45, up by 135.15 points or 0.83% after trading in a range of 16278.40 and 16397.00. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.40%, Axis Bank up by 2.16%, Infosys up by 2.01%, Bajaj Finance up by 1.93% and Wipro up by 1.65%. On the flip side, Power Grid down by 1.09%, NTPC down by 0.86%, JSW Steel down by 0.65%, Coal India down by 0.41% and Apollo Hospital down by 0.30% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 rose 184.56 points or 0.69% to 26,844.31, Straits Times added 30.94 points or 0.97% to 3,232.83, Taiwan Weighted surged 190.96 points or 1.19% to 16,247.05, Jakarta Composite advanced 51.01 points or 0.77% to 6,695.48 and KOSPI inched up by 1.77 points or 0.07% to 2,622.21. On the other hand, Hang Seng fell 143.54 points or 0.70% to 20,458.98 and Shanghai Composite was down by 11.58 points or 0.37% to 3,082.12.