Domestic markets trade firm in early deals; Nifty reclaims 17k mark

Indian equity benchmarks started the F&O series expiry session on optimistic note tracking strong global cues. Markets are trading firm in early deals with gains of around a percent each on the back of buying in all the sector indices.  Sentiments got a boost as rating agency Icra retained its India’s previous growth forecast of 7.2 per cent for the current fiscal, citing revival in contact-intensive services and a pick-up in government and private expenditure. It said growth is expected to pick up to pre-Covid levels on the back of pent-up demand. Market participants overlooked a private report that India’s current account deficit (CAD) is expected to more than double sequentially to over $30 billion in the first quarter of financial year 2022-23 (Q1FY23) to rise above 3 per cent of gross domestic product (GDP) from $13.4 billion, or 1.5 per cent of GDP, in the previous quarter. Meanwhile, capital markets regulator Sebi came out with guidelines pertaining to preferential issues and institutional placement of units by emerging investment vehicles -- REIT and InvIT.

Most of the Asian markets are trading higher following the broadly positive cues from global markets overnight, as traders reacted positively to the dollar tumbling and bond yields moving sharply lower after news of the bond market intervention from the Bank of England. The BoE decided to intervene in the bond market by purchasing long-dated U.K. government bonds to address dysfunction in the gilt market. Back home, India has proposed additional customs duties of 15 per cent on the import of 22 products, including whiskey, cheese and diesel engine parts, from the UK in retaliation to Britain's decision to impose restrictions on steel products. In stock specific development, Tata Motors rallied after launching India's lowest priced electric car at a little over $10,000. FSN E-Commerce Ventures (Nykaa) surged as board plans to mull bonus share issue on Monday, October 3.

The BSE Sensex is currently trading at 57096.18, up by 497.90 points or 0.88% after trading in a range of 56932.21 and 57166.14. 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 1.06%, while Small cap index was up by 1.53%.

The top gaining sectoral indices on the BSE were Metal up by 2.65%, Utilities up by 1.85%, Power up by 1.76%, PSU up by 1.48%, Energy up by 1.48%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 3.10%, ITC up by 2.23%, NTPC up by 1.99%, Sun Pharma up by 1.84% and Indusind Bank up by 1.57%. On the flip side, Asian Paints down by 2.32% and TCS down by 0.04% were the only losers.

Meanwhile, rating agency Icra has retained its previous growth forecast of 7.2 per cent for India for the current fiscal (FY23), aided by a revival in contact-intensive services owing to pent-up demand, and a back-ended pick-up in government and private capex. It said growth is likely to pick up to pre-Covid levels on the back of pent-up demand, even though on an annualised basis, the absolute numbers will be falling from Q1 (13.5 per cent) to a much lower level in Q2 and further down in the two remainder quarters due to the high base.

The agency expects the growth momentum to lose steam and slows down to 6.5-7 per cent in Q2 and further 5-5.5 per cent each in Q3 and Q4 of FY2023 due to base effect, which is still higher the RBI forecast for these two quarters as she foresees a broad-based pick-up in private sector capex beginning from end of 2022, notwithstanding the higher-than-expected capacity utilisation of 74.5 per cent in Q4 FY22. It said the record generation of average daily GST e-way bills in August, owing to pre-festive stocking, indicates a revival in confidence and this, coupled with softening commodity prices, bodes well for the upcoming festive season. However, the decline in the output of key kharif crops such as paddy and flagging external demand pose risks to growth and remain the key monitorables.

The agency sees GVA (gross value add) growth 7 per cent and average retail inflation 6.5 per cent and wholesale inflation 10.1 per cent and the current account deficit nearly trebling to $120 billion or 3.5 per cent of GDP by March from $38.7 billion or 1.2 per cent in FY22. The latter, along with buoyant imports, following relatively stronger domestic demand, is expected to lead to a sharp widening of the CAD to 3.5 per cent in FY23, she said, adding although some relief is likely. Besides, gross fiscal deficit will print in at Rs 15.87 lakh crore or 6.7 per cent of GDP, which will be below the revised estimate of Rs 15.91 lakh crore or 6.9 per cent. It noted that the worst will be the rupee, which may plunge to 83 to a dollar by December and the 10-year G-sec yields to range 7.3-7.8 per cent in the rest of the year.

The CNX Nifty is currently trading at 17010.30, up by 151.70 points or 0.90% after trading in a range of 16955.50 and 17026.05. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.92%, Tata Steel up by 2.89%, ONGC up by 2.82%, Tata Motors up by 2.59% and ITC up by 2.26%. On the flip side, Asian Paints down by 2.49%, Hero MotoCorp down by 1.04%, Bajaj Auto down by 0.54%, Britannia Industries down by 0.36% and SBI Life Insurance down by 0.07% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 189.48 points or 0.72% to 26,363.46, Straits Times rose 31.56 points or 1.01% to 3,147.87, Hang Seng jumped 191.23 points or 1.11% to 17,442.11, Taiwan Weighted advanced 74.90 points or 0.56% to 13,540.97, KOSPI added 28.92 points or 1.33% to 2,198.21 and Shanghai Composite was up by 8.26 points or 0.27% to 3,053.33, while Jakarta Composite was down by 15.88 points or 0.22% to 7,061.15.