Local equities continue firm trade in morning deals

Local equity benchmarks continued their firm trade in the morning session led by gains in Auto, Banking and Telecom stocks. Sentiments remained positive as Finance Minister Nirmala Sitharaman highlighted that inflation has come down to a manageable level and said the country’s economic growth remains a priority for the government. She added that job creation and equitable distribution of wealth remain the other focus areas. Some support also came as Sanjiv Bajaj, President of industry body CII said India is in a much better position to deal with the challenges related to growth and inflation. Meanwhile, Commerce and industry minister Piyush Goyal has launched an initiative -- SETU (Supporting Entrepreneurs in Transformation and Upskilling) -- to connect startups in India to US-based investors.

On the global front, Asian markets are trading mostly in green as oil prices slumped and Treasury yields pulled back, helping cool investor concerns about inflation and interest-rate hikes. Investors also reacted positively to Fed Vice Chair Lael Brainard's comments on bringing inflation down without going too far. Back home, automobile industry stocks remained in watch as automobile dealers' body FADA said retail sales of automobiles in India grew 8.31 per cent in August this year on the back of increase in registrations of vehicles across all major segments.

The BSE Sensex is currently trading at 59548.98, up by 520.07 points or 0.88% after trading in a range of 59374.99 and 59638.63. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index up by 0.79%.

The top gaining sectoral indices on the BSE were Auto up by 1.21%, Bankex up by 1.16%, Telecom up by 1.08%, TECK up by 0.98%, IT up by 0.97% while, Metal down by 0.30%, Realty down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.90%, ICICI Bank up by 2.57%, Bharti Airtel up by 2.32%, Asian Paints up by 1.89% and Indusind Bank up by 1.77%. On the flip side, Tata Steel down by 0.42% were the top losers.

Meanwhile, Credit ratings agency Icra in its latest report has said that domestic airlines industry is expected to report a net loss of around Rs 15,000-17,000 crore this fiscal (FY23) on account of elevated price of Aviation Turbine Fuel (ATF) and a weak rupee. It stated the losses for the industry in the previous fiscal were estimated at around Rs 23,000 crore. Any positive or negative movement in rupee against the US dollar and any increase or decrease in the jet fuel prices have a major bearing on the cost structure of airlines as in India, ATF accounts for around 45 per cent of the operational cost of an airline while as much as 35-50 per cent of the airlines' operating expenses are US dollar driven.

Further, it stated the debt levels for the industry are expected to be at around Rs 1 lakh crore (including lease liabilities) as on March 31, 2023. Two listed airlines -- IndiGo and SpiceJet -- have reported losses to the tune of Rs 1,064 crore and Rs 789 crore, respectively, in the June quarter of FY23, primarily owing to a weak rupee and higher jet fuel prices. According to Icra, the domestic passenger traffic for Indian carriers reported a healthy 57.7 per cent year-on-year growth at 84.2 million in FY22 on the back of the fast pace of vaccination, lower incidence of fresh Covid infections, coupled with the declining intensity of the infection.

Moreover, it said on a year-on-year basis, in Q1 FY23, the domestic passenger traffic was higher by 2.04 times at 32.5 million while it was short by around 7 per cent compared to the pre-Covid level (Q1 FY20). It also said with the back-to-normalcy in the operating environment driven by the waning effect of the pandemic, domestic passenger traffic is expected to witness YoY growth of 52-54 per cent in FY23. It added a fast-paced recovery in domestic passenger traffic is expected in FY2023 aided by improving demand in both leisure and business travel segments. This is attributable to the receding infection level and consequent normalcy in the operating environment.

The CNX Nifty is currently trading at 17768.05, up by 143.65 points or 0.82% after trading in a range of 17732.55 and 17792.20. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Shree Cement up by 3.21%, Mahindra & Mahindra up by 3.08%, BPCL up by 3.04%, ICICI Bank up by 2.37% and Bharti Airtel up by 2.34%. On the flip side, SBI Life Insuran down by 1.35%, Coal India down by 0.80%, Hindalco down by 0.75%, Cipla down by 0.65% and Tata Steel down by 0.60% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 585.49 points or 2.13% to 28,015.79, Taiwan Weighted strengthened 152.24 points or 1.06% to 14,562.29, Jakarta Composite soared 74.45 points or 1.04% to 7,261.21, Straits Times advanced 27.50 points or 0.86% to 3,238.33 and KOSPI rose 8.67 points or 0.36% to 2,385.13.

On the flip side, Shanghai Composite declined 4.68 points or 0.14% to 3,241.61 and Hang Seng decreased 74.48 points or 0.39% to 18,969.82