Benchmarks trade higher in morning deals as RBI raises repo rate

Indian equity benchmarks traded higher in morning deals, after the Reserve Bank of India (RBI) raised the benchmark lending rate by 50 basis points to 5.90 percent in a bid to check inflation, which has remained above its tolerance level for the past 8 months. This is the fourth consecutive rate hike after a 40 basis points increase in May and a 50 basis point hike each in June and August. Traders also found support with Union Minister Piyush Goyal’s statement that India will be the pillar of the global economic revival as it exhibited steady growth and emerged as the fastest-growing country among large economies of the world. Some optimism also came as Economic Affairs Secretary Ajay Seth said India’s economic recovery remains on course, supported by key structural reforms, despite exogenous shocks and challenges. Traders also took a note of report that the Centre has reduced its borrowing target for the financial year 2022-23 (FY23) by Rs 10,000 crore to Rs 14.21 trillion amid robust tax collections.

On the global front, all Asian markets are trading lower after German inflation spiked higher, British Prime Minister Liz Truss defended a tax-cut plan that rattled investors and Chinese manufacturing weakened. Back home, gems and jewelry industry stocks remained in focus as ICRA Ratings expects India’s exports of cut and polished diamonds (CPDs) to taper by 8-10% to $22.0-22.5 billion in FY2023, amid the demand moderation.

The BSE Sensex is currently trading at 56678.11, up by 268.15 points or 0.48% after trading in a range of 56147.23 and 56703.73. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.10%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Bankex up by 1.10%, Telecom up by 0.97%, PSU up by 0.76%, Power up by 0.61% and Utilities up by 0.58%, while IT down by 0.95%, TECK down by 0.74%, Healthcare down by 0.23%, FMCG down by 0.13% and Auto down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 3.14%, Ultratech Cement up by 2.06%, Reliance Industries up by 1.65%, Kotak Mahindra Bank up by 1.61% and HDFC Bank up by 1.40%. On the flip side, Asian Paints down by 1.72%, Tech Mahindra down by 1.67%, Dr. Reddy's Lab down by 1.42%, TCS down by 1.39% and HCL Technologies down by 1.05% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has said innovation is going to be key factor in making India a developed nation by 2047, as she highlighted the immense potential of digitalisation in achieving this. Sitharaman also said that if the same momentum that was seen through COVID-19 and immediately after that continues, and if all countrymen put their efforts together, building India as a developed economy by 2047 should not be difficult.

She mentioned ‘Innovation is going to be the key for many things that we can do between now and 2047. It is because of the innovation, the solutions which we have for very many of the festering problems of this economy, we can achieve that desired developed economy status.’ Also highlighting the emphasis that is being laid on further digitalisation, whether into medical services, education and Software as a service (SaaS), she said there is immense potential to take it up further.

Noting that India went through the pandemic with of course sufferings, but succeeded in keeping itself steady and businesses came out of it, the Minister said, ‘We have lots more to do, I'm not saying that we have succeeded in achieving everything that we want, but we have come out.’

The CNX Nifty is currently trading at 16904.80, up by 86.70 points or 0.52% after trading in a range of 16747.70 and 16905.10. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.55%, Power Grid Corporation up by 3.27%, Hindalco up by 2.44%, Ultratech Cement up by 2.00% and Kotak Mahindra Bank up by 1.71%. On the flip side, Asian Paints down by 1.79%, Coal India down by 1.52%, Dr. Reddy's Lab down by 1.51%, Tata Motors down by 1.43% and TCS down by 1.34% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 586.60 points or 2.22% to 25,835.45, Hang Seng decreased 11.39 points or 0.07% to 17,154.48, Taiwan Weighted dropped 130.49 points or 0.96% to 13,403.77, KOSPI fell 3.07 points or 0.14% to 2,167.86, Straits Times trembled 13.20 points or 0.42% to 3,101.88, Shanghai Composite declined 6.35 points or 0.21% to 3,034.85 and Jakarta Composite lost 34.95 points or 0.5% to 7,001.25.