Markets remain firm on sustained buying support

Mirroring their Asian peers, Indian equity markets were trading in fine fettle on the back of sustained buying activities by market-participants. Both, Sensex and Nifty were trading above 54300 and 16200 levels in the noon session due to heavy buying in IT, TECK and Capital Goods stocks. Gains in frontline blue chip stocks such as Infosys, Tech Mahindra and Indusind Bank also helped to lift the markets. Sentiments were upbeat as SBI Research in its latest report has said that the income of farmers has grown in the range of 1.3-1.7 times in FY22 from the FY18 levels on average while grain exports soared to over USD 50 billion. For certain crops in some states (like soyabean in Maharashtra and cotton in Karnataka) farmers’ income more than doubled in FY22 from FY18 levels. Traders paid no heed towards report where foreign investors continue to be cautious about the Indian equity market and have pulled out over Rs 7,400 crore this month so far amid sustained strengthening of the dollar and increasing concerns over a recession in the US. This comes following a net withdrawal of Rs 50,203 crore from equities in June. 

On the global front, most of the Asian markets were trading higher as the investor sentiments got buoyed after better-than-anticipated US retail sales data and on upbeat corporate earnings report. Back home, in scrip specific developments, Cyient jumped on inking multi-year deal with Honeywell and Oberoi Realty gained on reporting over 4-fold jump in Q1 consolidated net profit.

The BSE Sensex is currently trading at 54347.00, up by 586.22 points or 1.09% after trading in a range of 54034.97 and 54349.86. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.24%, while Small cap index was up by 1.28%.

The top gaining sectoral indices on the BSE were IT up by 3.25%, TECK up by 2.98%, Capital Goods up by 2.26%, Metal up by 2.14%, Consumer Durables up by 1.89%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Infosys up by 4.12%, Tech Mahindra up by 4.08%, Indusind Bank up by 3.35%, Larsen & Toubro up by 2.83% and Kotak Mahindra Bank was up by 2.66%. On the flip side, HDFC Bank down by 1.31%, Dr. Reddy's Lab down by 1.09%, HDFC down by 0.77%, Mahindra & Mahindra down by 0.70% and Hindustan Unilever was down by 0.35% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its article has said that the share of inward remittances from GCC (Gulf Cooperation Council) region dipped sharply during 2020-21 on account of the economic stress created by the COVID-19 pandemic. It noted that the share of remittances from the Gulf nations in India's inward remittances is estimated to have declined from more than 50 per cent in 2016-17 (last surveyed period) to about 30 per cent in 2020-21. On the other hand, advanced economies like the US, the UK and Singapore emerged as important sources for the country for remittances, accounting for 36 per cent of the total payments in 2020-21.

It stated that overall, notwithstanding headwinds of COVID-19, India's inward remittances have proven to be a resilient source of current account receipts. The decline in remittances from the Gulf countries during 2020-21 reflects a slower pace of migration and a larger presence of Indian diaspora in informal sectors which was hit the most during the pandemic period. As a result, the proportion of small size transactions in total remittances increased in 2020-21. The US surpassed the UAE as the top source country, accounting for 23 per cent of total remittances in 2020-21. This corroborates with the World Bank report (2021) citing an economic recovery in the US as one of the important drivers of India's remittances growth as it accounts for almost 20 per cent of total remittances.

The article also concluded that the majority of the remittances continue to be routed through private sector banks, followed by public sector banks although foreign banks have witnessed a marginal increase in remittances transactions, particularly from Singapore. It also noted that stressed income conditions are discernible from small size transactions gaining a share in total remittances during the pandemic period.

The CNX Nifty is currently trading at 16226.85, up by 177.65 points or 1.11% after trading in a range of 16142.20 and 16227.20. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.22%, Infosys up by 4.19%, Indusind Bank up by 3.43%, Hindalco up by 3.42% and Larsen & Toubro was up by 2.90%. On the flip side, Britannia Inds down by 1.39%, Dr. Reddy's Lab down by 1.21%, HDFC Bank down by 1.17%, HDFC down by 0.77% and Mahindra & Mahindra was down by 0.58% were the top losers.

Most of the Asian markets were trading higher, Straits Times advanced 20.69 points or 0.67% to 3,119.84, KOSPI rose 44.27 points or 1.9% to 2,375.25, Taiwan Weighted strengthened 169.02 points or 1.16% to 14,719.64, Shanghai Composite gained 45.07 points or 1.4% to 3,273.13 and Hang Seng was up by 508.35 points or 2.5% to 20,806.07.

On the flip side, Jakarta Composite was down by 3.79 points or 0.06% to 6,648.12.