Indian markets maintain upward momentum

Indian equity markets maintained their upward momentum in the noon session following gains in IT, TECK and Energy stocks. Healthy buying was observed in blue-chip stocks like Reliance Industries, Infosys and Wipro. Sentiments were upbeat as India's dominant services sector expanded at the fastest pace in 11 years in May on strong demand, although inflationary pressures touched new highs, restricting optimism and weighing on consumers' pocketbooks. The S&P Global India Services Purchasing Managers' Index rose to 58.9 in May from 57.9 in April, its highest since April 2011. In another positive development, India's merchandise exports rose by 15.46 per cent to $37.29 billion in May 2022 as compared to $32.30 billion in the same month last year on account of healthy performance by sectors like petroleum products, electronic goods and chemicals. On the global front, Asian markets were trading in green following a strong performance on Wall Street ahead of a key US jobs data release.

The BSE Sensex is currently trading at 56388.50, up by 570.39 points or 1.02% after trading in a range of 56200.68 and 56432.65. There were 19 stocks advancing against 10 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.15%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were IT up by 1.87%, TECK up by 1.55%, Energy up by 1.12%, Oil & Gas up by 0.68% and Capital Goods was up by 0.68%, while Power down by 1.64%, Utilities down by 1.54%, Basic Materials down by 0.96%, Auto down by 0.57% and Telecom was down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.25%, Infosys up by 2.55%, Wipro up by 2.30%, HCL Tech up by 1.97% and Larsen & Toubro was up by 1.80%. On the flip side, Ultratech Cement down by 3.95%, NTPC down by 2.04%, Bharti Airtel down by 0.90%, Mahindra & Mahindra down by 0.88% and Maruti Suzuki was down by 0.85% were the top losers.

Meanwhile, Credit rating agency Crisil in its latest report has said that freight rates have come down in May 2022 as transporters passed on the benefit of the lower diesel prices due to a cut in excise duty. It noted that cement and mining applications saw a flattish trajectory in freight rates in May owing to the high base of April, while for the auto-carriers, agri-products, container, FMCG/FMCD, petroleum tankers, textile and steel, these rates saw a lower single-digit drop.

The report said CRISFrex indicates that freight rates have dropped month-on-month with free cash flow (pre-equated monthly instalment) decreasing 100 basis points. It said CRISFrex captures the changes in freight rates on a sequential basis. Besides, it also tracks the free cash flows (FCF; pre-EMI) of transporters on an ongoing basis. Higher FCF would typically support demand for commercial vehicles. However, fleet utilisation was flat month-on-month and while for the market load, it was higher, which was offset by slightly lower utilisation for parcel/loose goods, mining (largely coal and iron ore), and agri-products, the remaining commodities, including auto-carriers, container applications, fast-moving consumer goods and durables, steel, textile, and petroleum tankers, saw flattish trajectory in utilization.

According to the report, freight rates, too, declined for most commodities but were stable for mining and cement. Freight rates declined month-on-month for consumer essentials, such as agri-products, FMCG/FMCD, loose goods and discretionary goods. The complete effect of this duty cut would be visible in the index from next month. This is because the central government set an extrinsic decline in excise duty at the end of the month, whereas CRISFrex represents freight rates and fuel prices for the entire month.

The CNX Nifty is currently trading at 16754.95, up by 126.95 points or 0.76% after trading in a range of 16710.15 and 16793.85. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.22%, Infosys up by 2.58%, Wipro up by 2.31%, HCL Tech up by 1.99% and Larsen & Toubro was up by 1.92%. On the flip side, Grasim Industries down by 5.62%, Ultratech Cement down by 4.01%, Shree Cement down by 3.83%, NTPC down by 2.20% and Apollo Hospital was down by 1.90% were the top losers.

Asian markets were trading in green; KOSPI rose 10.92 points or 0.41% to 2,669.91, Straits Times advanced 3.07 points or 0.1% to 3,229.79, Jakarta Composite soared 62.78 points or 0.88% to 7,211.50 and Nikkei 225 was up by 347.69 points or 1.27% to 27,761.57.