Benchmarks trim some gains in morning deals

Indian equity benchmarks trimmed some gains but continued to trade in green terrain in morning deals, led by gains in Telecom, Banking and Auto stocks amid positive global cues. Traders took some support with a report by Microfinance Institutions Network (MFIN) showing that the microfinance industry's Gross Loan Portfolio (GLP) grew by 10.04 per cent to Rs 2,85,441 crore as of March 2022. The industry's GLP stood at Rs 2,59,377 crore in March 2021. Some support also came as union minister Narayan Rane has called for coordinated efforts by all stakeholders to resolve the issue of delayed outstanding payments to Micro, Small and Medium Enterprises (MSMEs). However, gains remain capped as provisional data available on the NSE showed that foreign institutional investors (FIIs) have net sold Rs 3,531.15 crore worth of shares on June 15. On the global front, Asian markets are trading mostly in green after the U.S. Federal Reserve hiked interest rates by 75 basis points - the biggest since 1994 - to curb rising inflation, which is at a 40-year high. Fed Chair Jerome Powell indicated that another 75 bps of 50 bps hike could come in the next FOMC meeting.

The BSE Sensex is currently trading at 52735.62, up by 194.23 points or 0.37% after trading in a range of 52735.57 and 53142.50. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.38%.

The top gaining sectoral indices on the BSE were Telecom up by 0.54%, Bankex up by 0.52%, Auto up by 0.37%, IT up by 0.34%, Consumer Disc up by 0.30% while, Oil & Gas down by 0.38%, PSU down by 0.29%, Metal down by 0.29%, Realty down by 0.25%, Healthcare down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.80%, ICICI Bank up by 1.37%, HDFC up by 1.01%, Indusind Bank up by 0.81% and Reliance Industries up by 0.70%. On the flip side, Power Grid Corp down by 1.96%, Kotak Mahindra Bank down by 0.71%, Tech Mahindra down by 0.62%, Larsen & Toubro down by 0.53% and Nestle down by 0.45% were the top losers.

Meanwhile, credit rating agency Fitch Ratings has said it believes a sustained gross domestic product (GDP) growth, the government's thrust on infrastructure and affordable housing, and a revival in corporate capex, will underpin growth of the cement sector. It expects India's cement demand to rise by mid-to-high single digits over the medium term after an estimated mid-teen rebound in the financial year ended March 2022 (FY22).

However, it stated ‘Industrywide utilisation will drop towards 65 per cent from the close to 70 per cent we estimated in FY22 as faster new capacity additions will outpace demand growth’. It added ‘this will temper cement producers' pricing power, notwithstanding our expectation the industry will consolidate further’. Moreover, it asserted that Adani Group's potentially more aggressive approach to capacity expansion after it takes over Holcim Ltd's Indian business will heighten the competition in the industry.

Besides it said the price hikes by cement producers will not fully counter the spike in energy prices since the start of the Russia-Ukraine war. Cement producers' per tonne margin in FY23 will stay markedly below the pandemic-hit FY21 level when low energy prices boosted profit despite lower demand. Leading Indian cement companies' reduced financial leverage since FY20 will support their financial flexibility despite their lower profitability and plans for higher expansion capex. It mentioned ‘The impact of inflationary pressure on cement demand from the Russia-Ukraine war has been limited so far, but downside risks to our estimates will rise if macroeconomic conditions deteriorate significantly’.

The CNX Nifty is currently trading at 15736.15, up by 44.00 points or 0.28% after trading in a range of 15730.15 and 15863.15. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.69%, ICICI Bank up by 1.43%, HDFC up by 1.01%, Reliance Industries up by 0.82% and Indusind Bank up by 0.81%. On the flip side, Power Grid Corp down by 1.82%, ONGC down by 1.65%, Hindalco down by 1.41%, Hero MotoCorp down by 1.29% and Coal India down by 1.18% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 199.03 points or 0.76% to 26,525.19, Jakarta Composite soared 113.61 points or 1.62% to 7,120.66, Straits Times advanced 34.75 points or 1.12% to 3,140.60, KOSPI rose 19.73 points or 0.81% to 2,467.11 and Shanghai Composite gained 8.12 points or 0.25% to 3,313.53.

On the flip side, Taiwan Weighted dropped 30.64 points or 0.19% to 15,968.61 and Hang Seng decreased 85.00 points or 0.4% to 21,223.21.