Key indices keep head above water in noon deals

Local equity benchmarks managed to keep their head above water in noon deals with both Sensex and Nifty were trading above 53,900 and 16,050 marks, respectively. Among blue chip stocks, Hindustan Unilever was top gainer up by over 2.50%, while Indusind Bank was top loser trading down by around 2%. Some support came as India's industrial growth, as per the Index of Industrial Production (IIP), surged to 19.6 percent in May from 7.1 percent in April. At 19.6 percent, the May industrial growth rate is the highest in one year, although it has been aided by a favourable base effect. However, traders were worried as rupee hit a record low for a third straight session ahead of US inflation data that could determine the pace of tightening in the world's largest economy. The partially convertible rupee was at 79.66, down by 7 paise, against previous close of 79.59 per dollar. On the global front, Asian markets were trading mixed as investors worry U.S. and European central bank action to cool inflation that is running at a four-decade high might derail global economic growth.

The BSE Sensex is currently trading at 53976.08, up by 89.47 points or 0.17% after trading in a range of 53879.93 and 54211.22. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.76%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were FMCG up by 1.21%, Metal up by 1.12%, Healthcare up by 1.00%, Basic Materials up by 0.92% and Capital Goods was up by 0.89%, while Power down by 1.18%, Utilities down by 1.17%, Oil & Gas down by 0.81%, Energy down by 0.51% and Telecom was down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.78%, Asian Paints up by 1.73%, Larsen & Toubro up by 1.46%, NTPC up by 1.39% and Kotak Mahindra Bank was up by 1.20%. On the flip side, Indusind Bank down by 1.85%, Bharti Airtel down by 1.37%, HDFC Bank down by 1.28%, HCL Tech down by 0.84% and TCS was down by 0.66% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the hotel industry's revenues and margins are expected to return to pre-COVID levels in 2022-23 despite the potential impact on demand in case of further waves of the pandemic. It said domestic leisure and transient travel will be the main demand drivers, although there will be a gradual recovery in business travel and foreign tourist arrivals (FTAs). It said pan-India premium hotel occupancy is expected to be at 68-70 percent for FY2023, and added that the average room rate (ARR) is expected to hover around Rs 5,600-5,800.

According to the report, the improved operating leverage along with sustenance of cost-optimization measures will support margins and accruals for hotels. Notwithstanding the potential impact on demand with further COVID waves, if any, it expects the industry's revenues and margins to return to pre-COVID levels in FY2023. The hotel industry witnessed a healthy start to FY2023, with 56-58 percent occupancy in premium hotels in the first quarter of FY23. It was up from 40-42 percent in FY2022 and closer to pre-COVID occupancy of 60-62 percent in Q1 FY2020.

The report further said pan-India ARR stood at around Rs 4,600-4,800 in Q1 FY2023, as against Rs 4,200-4,400 in FY2022. It remains at a 16-18 percent discount to pre-COVID levels on an average, although a few high-end hotels and leisure destinations witnessed ARRs spike to higher than pre-COVID levels in the last few months. The demand recovery was aided by leisure, transient passengers, MICE/weddings, and a gradual pickup in business travel and foreign tourist arrivals (FTAs), while some cities also witnessed traffic from specific events.

The CNX Nifty is currently trading at 16085.05, up by 26.75 points or 0.17% after trading in a range of 16056.75 and 16140.00. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.71%, JSW Steel up by 1.78%, Cipla up by 1.75%, Asian Paints up by 1.69% and BPCL up by 1.39%. On the flip side, Indusind Bank down by 2.28%, Bharti Airtel down by 1.53%, HDFC Bank down by 1.38%, HCL Tech down by 1.00% and TCS down by 0.69% were the top losers.

Asian markets were trading mixed; Shanghai Composite declined 7.08 points or 0.22% to 3,274.39, Hang Seng decreased 89.87 points or 0.43% to 20,754.87, Jakarta Composite lost 36.30 points or 0.54% to 6,681.99 and Straits Times was down by 24.67 points or 0.78% to 3,121.10

On the flip side, KOSPI rose 10.85 points or 0.47% to 2,328.61, Taiwan Weighted strengthened 374.06 points or 2.68% to 14,324.68 and Nikkei 225 was up by 142.11 points or 0.54% to 26,478.77.