Key gauges trade lower in morning deals

Domestic equity markets wiped off early gains and inched lower in morning deals, amid mixed global cues.  Traders overlooked Finance Minister Nirmala Sitharaman’s statement that India offers policy stability, transparency and consultative process of governance to incubate investment. Traders also paid no heed towards Prime Minister Narendra Modi’s statement that loans worth Rs 20 lakh crore have been disbursed so far under the Centre’s MUDRA scheme to provide self-employment opportunities to the youth, and added that Maharashtra was one of its major beneficiaries. Meanwhile, the Reserve Bank's rate setting panel met on Thursday to discuss and draft a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January this year.

On the global front, Asian markets were trading mixed as hawkish comments from Fed Chair Jerome Powell dashed hopes around easing of monetary tightening from December, and China affirmed that a zero-tolerance approach continues to be the overall strategy in tackling COVID-19. Back home, stocks related to dairy industry remained in watch as Credit Rating Agency ICRA in its latest report has said that Indian dairy industry is likely to achieve 12-14 per cent revenue growth in the current financial year (FY23) on the back of strong revival of the hotels, restaurants and catering (HoReCa) segment and the increase in retail prices.

The BSE Sensex is currently trading at 60734.09, down by 102.32 points or 0.17% after trading in a range of 60697.16 and 60989.41. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.09%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Metal up by 1.88%, Capital Goods up by 0.49%, Industrials up by 0.43%, Auto up by 0.27% and PSU up by 0.12%, while IT down by 0.97%, TECK down by 0.90%, Healthcare down by 0.42%, Utilities down by 0.38% and Oil & Gas down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.28%, Ultratech Cement up by 2.03%, Bajaj Finance up by 0.84%, Tata Steel up by 0.78% and Maruti Suzuki up by 0.56%. On the flip side, Infosys down by 1.32%, Dr. Reddy's Lab down by 1.28%, Tech Mahindra down by 1.17%, HDFC down by 1.00% and HDFC Bank down by 0.88% were the top losers.

Meanwhile, Credit Rating Agency ICRA in its latest report has said that Indian dairy industry is likely to achieve 12-14 per cent revenue growth in the current financial year (FY23) on the back of strong revival of the hotels, restaurants and catering (HoReCa) segment and the increase in retail prices. However, it said the operating profit margins are expected to contract by 120-160 bps on a year-on-year basis as the retail price hikes are expected to provide only partial support to the input cost pressures. 

Rating agency expects the industry to maintain a stable credit profile, supported by a favourable demand outlook and moderate debt levels. Milk production yields in the first half (H1) of FY23 were hampered by the prevalence of Lumpy Skin Disease (LSD), notably among cows in the northern states. Although a successful immunisation programme helped contain the disease, it expects a slight moderation in milk production growth to 4-5 per cent in the current fiscal.

According to the report, raw milk procurement prices increased in FY22, led by healthy demand and constricted milk availability as a result of disruption in cattle insemination programmes earlier during the pandemic. It said raw milk prices have continued to rise in the current fiscal too, owing to rising cattle feed and fodder prices for dairy farmers. While erratic monsoons in various parts of the country impacted fodder availability, rising prices of grains like maize, wheat and soybean led to soaring cattle feed concentrate prices. Apart from that, it said the prevalence of LSD briefly limited milk availability. Furthermore, companies faced rising logistics, processing and packaging expenses. 

The CNX Nifty is currently trading at 18036.50, down by 16.20 points or 0.09% after trading in a range of 18026.90 and 18108.00. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 3.23%, Ultratech Cement up by 2.01%, Hindalco up by 1.97%, JSW Steel up by 1.75% and Eicher Motors up by 1.45%. On the flip side, Hero MotoCorp down by 1.83%, BPCL down by 1.61%, Divi's Lab down by 1.55%, Infosys down by 1.36% and Tech Mahindra down by 1.19% were the top losers.

Asian markets were trading mixed; Hang Seng increased 874.19 points or 5.7% to 16,213.68, Shanghai Composite gained 62.58 points or 2.09% to 3,060.39, KOSPI rose 13.85 points or 0.59% to 2,343.02 and Straits Times advanced 9.32 points or 0.3% to 3,111.83. On the flip side, Taiwan Weighted dropped 25.39 points or 0.2% to 12,961.21, Jakarta Composite lost 53.63 points or 0.76% to 6,980.94 and Nikkei 225 slipped 511.32 points or 1.85% to 27,152.07.