Sensex, Nifty remain higher in late morning session

Indian equity benchmarks continued gaining rally in late morning session, despite negative cues from other Asian markets. Heavy buying at capital goods and industrials counters helped key indices to remain higher. Sentiments remained positive as ECGC has introduced a new scheme to provide enhanced export credit risk insurance cover to the extent of 90% to support small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).  The scheme is expected to benefit a number of small-scale exporters availing of export credit with banks which hold the ECGC WT-ECIB covers.

However, some concerns remained among traders, amid a private report stating that the global economy is in the grips of a serious slowdown, with some key economies at high risk of recession and only sparse meaningful cooling in inflation over the next year. Besides, global rating agency S&P said it expects “significant” increases in the policy rates by the Reserve Bank of India’s (RBI) monetary policy committee (MPC) at its upcoming meetings. The assessment comes a week ahead of the MPC’s three-day meeting.

On the global front, Asian markets were trading mostly in red, even after China industrial profits grew slightly in June after falling for two straight months, as the relaxation of pandemic related restrictions underpinned production and sales. Industrial profits grew 0.8 percent year-on-year in June, reversing a 6.5 percent fall in May. During the January to June period, industrial profits advanced 1.0 percent.

The BSE Sensex is currently trading at 55552.82, up by 284.33 points or 0.51% after trading in a range of 55157.99 and 55557.44. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.07%, Industrials up by 1.12%, Healthcare up by 0.94%, Basic Materials up by 0.74% and PSU up by 0.73%, while Telecom down by 0.44%, Consumer Durables down by 0.17%, Auto down by 0.16% and Power down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.40%, Sun Pharma up by 2.44%, Indusind Bank up by 1.85%, Axis Bank up by 1.42% and TCS up by 1.32%. On the flip side, Bajaj Finserv down by 1.09%, Kotak Mahindra Bank down by 1.02%, Bharti Airtel down by 1.01%, Bajaj Finance down by 0.47% and Titan Co down by 0.14% were the top losers.

Meanwhile, Crisil in its latest report has said that auto component industry is expected to see 9-11 per cent of its revenue coming from EV (Electric Vehicle) parts by 2027 amid increasing electrification. It said this growth will come even as the supply of parts for the conventional internal combustion engine-driven vehicles will also grow during the period. It noted that EV components' share in the sector's overall revenue during last fiscal stood at a meagre 1 per cent.

According to the report, revenue of the electric vehicle components is likely to rev up at a compound annual growth rate of around 76 per cent to Rs 72,500 crore in fiscal 2027 from Rs 4,300 crore last fiscal.  It forecasted that as much as 60 per cent of this revenue is expected to come from the battery segment and 15 per cent each from drivetrains and electronics, with 90 per cent of the EV component supplies likely to be for two-wheelers and PV (Passenger Vehicle) segments.

The report said an analysis of 220 manufacturers, which account for a-third of the auto components market, indicates the transition to EVs will create both opportunities and challenges for domestic auto component makers. It added that EV components such as batteries, drivetrains, electronics and others present an opportunity for auto component makers to diversify their revenue base beyond ICE (Internal Combustion Engine) vehicles.

The CNX Nifty is currently trading at 16565.50, up by 81.65 points or 0.50% after trading in a range of 16438.75 and 16568.75. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.32%, Grasim Industries up by 2.83%, Divi's Lab up by 2.52%, Sun Pharma up by 2.25% and Indusind Bank up by 1.84%. On the flip side, UPL down by 1.81%, Bajaj Auto down by 1.68%, Kotak Mahindra Bank down by 1.25%, Bharti Airtel down by 1.10% and Bajaj Finserv down by 1.07% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 3.07 points or 0.09% to 3,274.37, Straits Times trembled 7.57 points or 0.24% to 3,184.55, KOSPI fell 11.21 points or 0.46% to 2,401.75 and Hang Seng decreased 315.42 points or 1.51% to 20,590.46. On the flip side, Nikkei 225 surged 107.52 points or 0.39% to 27,762.73, Taiwan Weighted strengthened 15.05 points or 0.1% to 14,821.83 and Jakarta Composite soared 5.75 points or 0.08% to 6,877.29.