Markets remain strong; Nifty above 17,450 mark

Indian equity benchmarks remained strong in morning session, on account of buying in frontline blue chip counters. Sentiments were on upbeat mood with a joint survey conducted by industry body FICCI and Indian Banks' Association revealing that the economic activity in India is in recovery mode as growth seen broad basing with most sectors operating at pre-pandemic levels. The uptick in growth was despite a muted start to this year due to emergence of Omicron variant. Some optimism also came with Commerce and Industry Minister Piyush Goyal’s statement that India is looking at getting duty-free access for different products identified under One District One Product (ODOP) initiative. Moreover, the strengthening rupee against the dollar also buoyed the trading sentiments.

On the global front, Asian markets are trading mostly in green despite the broadly negative cues from global markets overnight, as stocks in the region rebounded after the recent sell-off with traders picking up some stocks at a bargain, even as continuing concerns remain over the outlook for interest rates and potential recession. Traders now look ahead to Friday's closely watched monthly employment report - which also may help to determine the outlook for interest rates.

The BSE Sensex is currently trading at 58516.77, up by 544.15 points or 0.94% after trading in a range of 58245.49 and 58521.14. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.29%, while Small cap index was up by 1.26%.

The top gaining sectoral indices on the BSE were Utilities up by 2.29%, Power up by 2.27%, Auto up by 2.22%, Realty up by 2.14% and Consumer Discretionary up by 1.71%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finserv up by 4.19%, Maruti Suzuki up by 2.93%, Bajaj Finance up by 2.93%, Indusind Bank up by 2.78% and NTPC up by 2.27%. On the flip side, Bharti Airtel down by 0.46% and Reliance Industries down by 0.38% were the only losers.

Meanwhile, rating agency Icra in its a note based on the analysis of 620 listed companies, excluding financial sector entities, has said that India Inc saw a 39 per cent jump in top lines during April-June quarter but their operating margins declined 213 basis points to 17.7 per cent due to input cost inflation. It stated while companies passed on higher input costs in the form of commodity and energy cost, leading to revenue growth, the same led to margin compression. Margin compression was attributed to the supply chain disruptions triggered by the war in Ukraine.

Further, it expects margins to recover from the second half. It mentioned that the sample 620 companies reported an aggregate revenue growth of 39.1 per cent on-year in the June quarter, which was optically aided by the low base of the previous year impacted by the second wave of the pandemic. Another major reason for the massive growth is price hikes across several sectors. But sequentially, the top line grew by 1.5 per cent and the trends varied across sectors.

Besides, according to Kinjal Shah, vice-president and co-group head at the agency, demand revival after the second wave of the pandemic led to the sharp rally in prices of most commodities especially metals to multi-year highs in FY22, exerting pressure on margins.

The CNX Nifty is currently trading at 17484.85, up by 171.95 points or 0.99% after trading in a range of 17401.50 and 17490.70. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 4.24%, Indusind Bank up by 2.99%, Maruti Suzuki up by 2.99%, Bajaj Finance up by 2.98% and Shree Cement up by 2.85%. On the flip side, Bharti Airtel down by 0.41% and Reliance Industries down by 0.31% were the only losers.

Asian markets are trading mostly in green; Nikkei 225 surged 335.91 points or 1.2% to 28,214.87, Taiwan Weighted strengthened 86.46 points or 0.58% to 15,012.65, Jakarta Composite soared 79.21 points or 1.11% to 7,211.26, KOSPI rose 21.86 points or 0.9% to 2,448.75 and Straits Times advanced 16.77 points or 0.52% to 3,239.03.

On the flip side, Shanghai Composite declined 18.45 points or 0.57% to 3,222.28 and Hang Seng decreased 179.51 points or 0.9% to 19,843.71.