Bourses trim some gains in late afternoon session

Indian equity markets trimmed some of their gains in late afternoon session on account of profit taking. Globally investors were eyeing on Biden administration plans to sell oil from the Strategic Petroleum Reserve in a bid to dampen fuel prices before next month’s congressional elections. President Joe Biden’s announcement is expected this week as part of the response to Russia’s war on Ukraine. Domestic traders were cautious after Prime Minister Narendra Modi expressed concern over the huge edible oil and fertilisers import bill, which is putting pressure on the exchequer, saying it is time to work in mission mode to make India self-reliant and reduce import dependence. Modi said it was necessary to become ‘AatmaNirbhar’ or self-reliant because problems in the exporting countries directly hit import prices for India as happened after the outbreak of the Russia-Ukraine war.

On the global front, Asian markets were trading mostly in green tracking the latest rally on Wall Street. Oil prices and U.S. futures advanced and the dollar was trading near 149 Japanese yen. European markets were trading higher building on the previous session's rally, driven by the historic reversal of Britain's fiscal plan, with investors keeping a watch on earnings reports to gauge the economic outlook.

The BSE Sensex is currently trading at 58,842.64, up by 431.66 points or 0.74% after trading in a range of 58744.13 and 59143.66. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.99%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.98%, PSU up by 1.78%, Industrials up by 1.66%, Realty up by 1.55% and Telecom was up by 1.45%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were SBI up by 3.27%, ITC up by 2.24%, Bharti Airtel up by 2.15%, Nestle up by 1.90% and Larsen & Toubro up by 1.83%. On the flip side, HDFC down by 1.05%, NTPC down by 0.80%, Tech Mahindra down by 0.53%, Sun Pharma down by 0.23% and Power Grid down by 0.14% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that with increase in material and logistic costs, home textile exporters are likely to witness a double-digit contraction in turnover as well as moderation in margins in 2022-23. It stated that after peaking in the third quarter of FY22, the turnover of home textile exporters moderated in the quarters ended March 2022 and June 2022 amid a slowdown in demand.

Further, the report noted that high and increasing raw material and logistic costs resulted in a consistent decline in operating margins since the second quarter of FY22. It said rising inflationary concerns, the resultant slowdown in consumer discretionary spending, uncertainty on economic growth outlook and cautious buying by retailers to manage inventories are affecting sales in key export markets. It expects the turnover of home textile exporters to further contract in the quarter ended September 2022, with muted sales in the December quarter as well.

Overall, Icra expects a double-digit contraction in turnover as well as moderation in margins for home textile exporters in FY23, following all-time high sales and profits in FY22. As the demand scenario has normalized and inflation is exerting pressure on consumer discretionary spending, it expects home textile companies to report a contraction in turnover in FY23.

The CNX Nifty is currently trading at 17,447.80, up by 136.00 points or 0.79% after trading in a range of 17434.05 and 17527.80. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 3.43%, SBI up by 3.41%, Eicher Motors up by 2.70%, Adani Enterprises up by 2.44% and Tata Motors up by 2.30%. On the flip side, HDFC down by 0.93%, NTPC down by 0.89%, Bajaj Auto down by 0.66%, Tech Mahindra down by 0.49% and Britannia down by 0.41% were the top losers.

Asian markets were trading mostly in green, Nikkei 225 surged 380.35 points or 1.42% to 27,156.14, Hang Seng increased 301.68 points or 1.82% to 16,914.58, Taiwan Weighted strengthened 158.63 points or 1.22% to 13,124.68, KOSPI rose 30.24 points or 1.36% to 2,249.95, Straits Times advanced 12.61 points or 0.42% to 3,028.36 and Jakarta Composite was up by 3.37 points or 0.05% to 6,834.49. On the flip side, Shanghai Composite was down by 3.98 points or 0.13% to 3,080.96.

European markets were trading higher, UK’s FTSE 100 increased 78.07 points or 1.13% to 6,998.31, France’s CAC increased 67.07 points or 1.11% to 6,107.73 and Germany’s DAX was up by 195.25 points or 1.54% to 12,844.28.