Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in late morning session, with Both Sensex and Nifty trading in green, tracking positive cues from other Asian markets. Traders remained positive, as the Reserve Bank of India (RBI) Governor Shaktikanta Das asked state governments to find out effective ways to address the issues related to debt and cash management. Besides, Finance Minister Nirmala Sitharaman urged public sector banks to ensure smooth flow of credit to Kisan Credit Card (KCC) holders to boost rural incomes.

Some support also came with a private report stating that roles in Indian research and development (R&D) increased 42 per cent in the last three years. Job postings in R&D also grew by over 40 per cent between May 2020 and 2021. Among job seekers, searches for roles in R&D increased 21 per cent in the last three years.

On the global front, Asian markets were trading in green, after the value of overall bank lending in Japan was up 1.3 percent on year in June, the Bank of Japan said on Friday - standing at 585.069 trillion yen. That follows the 0.7 percent increase in May. Excluding trusts, bank lending jumped an annual 1.5 percent at 508.864 trillion yen, up from 0.9 percent in the previous month. Lending from trusts eased 0.2 percent on year to 76.204 trillion yen, down from 0.4 percent a month earlier.

The BSE Sensex is currently trading at 54404.76, up by 226.30 points or 0.42% after trading in a range of 54350.41 and 54627.14. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.19%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.12%, Industrials up by 1.01%, Bankex up by 0.50%, Power up by 0.37% and PSU up by 0.31%, while Realty down by 0.65%, Oil & Gas down by 0.30%, Auto down by 0.17%, Consumer Durables down by 0.13% and Metal down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 4.50%, NTPC up by 2.21%, Axis Bank up by 1.37%, ICICI Bank up by 1.13% and Mahindra & Mahindra up by 1.03%. On the flip side, Maruti Suzuki down by 1.35%, Indusind Bank down by 1.23%, Tata Steel down by 1.19%, Asian Paints down by 1.11% and Bajaj Finserv down by 0.39% were the top losers.

Meanwhile, Ratings agency Crisil in its latest report has said that the information technology (IT) services sector will see a sharp fall in revenue growth to 12-13 per cent in FY23 from 19 per cent in FY22. However, the current depreciation in the rupee, strong demand for new age technologies like artificial intelligence, cloud computing and Internet of Things will help the over $220-billion sector maintain a double digit growth.

The report stated that the moderation from 19 per cent to 12-13 per cent will be the highest in the last eight years and attributed the decline to expected tightening of IT expenditure by corporates amid the inflationary headwinds in the United States and European Union (EU), which together contribute almost 85 per cent to the sector's revenue. It also said the revenue growth in FY22 was higher on a lower base of 6 per cent in the COVID-hit FY21.

The agency further said that there can be a marginal fall in profit margins to 22-23 per cent from 24 per cent due to rising employee costs and travel expenses and added that operating profitability will be healthy. Revenue contribution from the new-age digital business stream will cross 50 per cent mark in FY23 from the 47 per cent level on higher spending on cloud infrastructure, which is expected to grow 1.5 times in the next three years, and increasing adoption of new-age technologies such as cyber security and Internet of Things.

The CNX Nifty is currently trading at 16178.25, up by 45.35 points or 0.28% after trading in a range of 16177.40 and 16275.50. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 4.47%, NTPC up by 2.21%, Coal India up by 1.94%, Axis Bank up by 1.41% and Grasim Industries up by 1.23%. On the flip side, HDFC Life Insurance down by 1.60%, Maruti Suzuki down by 1.46%, ONGC down by 1.30%, Tata Steel down by 1.18% and Indusind Bank down by 1.16% were the top losers.

All Asian markets were trading in green; Hang Seng increased 15.04 points or 0.07% to 21,658.62, Jakarta Composite soared 54.57 points or 0.82% to 6,707.16, Straits Times advanced 4.59 points or 0.15% to 3,133.99, Shanghai Composite gained 5.88 points or 0.17% to 3,370.28, KOSPI rose 26.97 points or 1.16% to 2,361.24, Taiwan Weighted strengthened 124.95 points or 0.87% to 14,461.22 and Nikkei 225 surged 199.86 points or 0.75% to 26,690.39.