Key indices cut some gains in late morning session

Indian equity benchmarks cut some their gains in late morning session, despite positive cues from other Asian markets. Gains got trimmed, after a private survey said that a majority of urban Indians interviewed felt that their cost of living has gone up to some extent compared to 12 months ago due to high inflation levels. Adding some concerns, Governor Shaktikanta Das said that India's central bank is on course to bring down prices but the retail inflation rate is likely to remain above the top end of its mandated target band until December. However, markets managed to trade in green, as Prime Minister Narendra Modi said that Mutual cooperation between the BRICS nations could help in global recovery after the coronavirus pandemic.

On the global front, Asian markets were trading in green, even after overall consumer prices in Japan were up 2.5 percent on year in May. That was in line with expectations and unchanged from the previous month. On a seasonally adjusted monthly basis, overall inflation rose 0.2 percent - again in line with expectations and slowing from 0.4 percent in the previous month.

The BSE Sensex is currently trading at 52576.03, up by 310.31 points or 0.59% after trading in a range of 52544.56 and 52909.87. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.00%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Telecom up by 2.19%, Auto up by 1.54%, Consumer discretionary up by 1.19%, Bankex up by 1.15% and FMCG up by 1.02%, while IT down by 0.56% and TECK down by 0.19% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.26%, Bharti Airtel up by 1.95%, Hindustan Unilever up by 1.83%, Indusind Bank up by 1.77% and ICICI Bank up by 1.42%. On the flip side, Infosys down by 1.09%, Tech Mahindra down by 1.02%, NTPC down by 0.66%, Asian Paints down by 0.61% and Wipro down by 0.41% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the government's scheme to liquidate overdue can help release Rs 9,000 crore dues owed by the distribution companies (discoms) to renewable energy (RE) generation companies (Gencos) over the next two fiscal. It said the payment stretch has been one of the key risks for the RE sector. In March 2022, the leading RE Gencos had receivables of about six months.

According to the report, receivables period for leading RE Gencos can be reduced by 40-50 days from 180 days now by March 2024. It noted that under the scheme, overdue, including past late payment surcharge (LPS) as on the cut-off date of June 3, 2022, will be converted into equated monthly instalments (EMIs) that discoms have to pay over 12 to 48 months based on different slabs.

The report further said the Rs 9,000 crore of liquidated dues can support equity investments in 24 gigawatts of under-implementation projects over the next two fiscals. It said ‘our calculation presumes financially stronger Discoms - such as in Gujarat and Maharashtra - would show better payment periods for RE projects compared to others that are expected to pay with an average delay of 3-5 months.’

The CNX Nifty is currently trading at 15634.90, up by 78.25 points or 0.50% after trading in a range of 15632.65 and 15749.25. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.03%, Hero MotoCorp up by 2.65%, Bharti Airtel up by 1.99%, ONGC up by 1.74% and Hindustan Unilever up by 1.72%. On the flip side, Apollo Hospital Ent. down by 1.86%, Infosys down by 1.20%, Tech Mahindra down by 1.10%, NTPC down by 0.99% and Asian Paints down by 0.73% were the top losers.

All Asian markets were trading in green; Hang Seng increased 309.16 points or 1.45% to 21,583.03, Straits Times advanced 8.49 points or 0.27% to 3,101.29, Shanghai Composite gained 14.52 points or 0.44% to 3,334.67, Nikkei 225 surged 305.27 points or 1.17% to 26,476.52, KOSPI rose 47.50 points or 2.05% to 2,361.82, Jakarta Composite soared 43.11 points or 0.62% to 7,041.38 and Taiwan Weighted strengthened 85.81 points or 0.57% to 15,262.25.