Markets continue to trade in fine fettle; IT stocks lead gains

Indian equity markets were continually trading in fine fettle in late morning deals, mirroring positive global cues as weak US inflation data raised hopes of Fed easing and a soft landing for the world’s largest economy. IT stocks led the surge, with Wipro, Tech Mahindra, HCL Technologies and Infosys all rising upto 4 percent. Sentiments got boost as SBI in its report said that rising software exports, remittances and a likely $5 billion jump in forex via swap deals will keep India's current account deficit CAD limited to 3 per cent for this fiscal against the consensus of 3.5%. On the sectoral front, almost all the sectoral indices on BSE were trading into positive territory; however stocks from FMCG counter were the only exception. Nevertheless, stocks from IT, TECK, Realty, Metal and Consumer Durables were the prominent gainers of the session.

On the global front, all Asian markets were trading in green following the broadly positive cues from global markets overnight, reflecting a positive reaction to the smaller-than-expected increase in US consumer price inflation in October. Back home, there were some buzz in tea  related stocks as the Tea Board has sought an assistance of Rs 1000 crore for the industry in the next five years starting 2022-23.

The BSE Sensex is currently trading at 61610.11, up by 996.41 points or 1.64% after trading in a range of 61311.02 and 61685.51. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.69%, while Small cap index up by 0.59%.

The top gaining sectoral indices on the BSE were IT up by 3.52%, TECK up by 3.09%, Realty up by 2.34%, Metal up by 1.83%a and Consumer Durables up by 1.20%, while FMCG down by 0.02% was the only losing index on BSE.

The top gainers on the Sensex were HDFC up by 4.01%, Infosys up by 3.98%, HDFC Bank up by 3.89%, HCL Tech. up by 3.80% and TCS up by 3.69%. On the flip side, NTPC down by 0.46%, Dr. Reddy's Lab down by 0.22%, ITC down by 0.18% and SBI down by 0.02% were the only losers.

Meanwhile, S&P Global Ratings has said that about half of the Indian companies that it rates are getting a boost in their core profitability from rupee depreciation. It said ‘much of our rated India corporate portfolio has sizable US-dollar linked revenue and, therefore, is not exposed to rupee depreciation. This encompasses entities in the IT, metals, and chemicals sectors. About half of the firms we rate are getting an EBITDA boost from currency weakening.’

S&P said domestically-driven sectors, such as telecom, are also well placed to withstand the rupee depreciation due to their hedging policies. It said infrastructure entities are most exposed to currency risk among Indian corporates and renewable players in particular have high capex spending and a heavy reliance on dollar debt. It also said still supportive onshore funding environment has also helped Indian companies manage the weaker offshore funding markets. Key onshore benchmark rates have risen about 200 basis points in the year to date, less than that seen in many offshore markets. This has made local markets an attractive alternate source of capital. This will give rated issuers a funding option to repay offshore bonds coming due through 2024.

It further said to tame inflation, the Reserve Bank has hiked key policy rates by 190 basis points since May, taking interest rates to a three-year high of 5.90 per cent. It said Asia-Pacific is in the middle of a set of rapid interest rate hikes coming out of the US. It expects the macro pressures to build on regional foreign-exchange rates, as apparent in widening current account deficits emerging in many countries.

The CNX Nifty is currently trading at 18306.10, up by 277.90 points or 1.54% after trading in a range of 18259.35 and 18332.20. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 4.89%, HDFC up by 4.17%, HDFC Bank up by 4.04%, Infosys up by 3.99% and HCL Tech. up by 3.83%. On the flip side, Eicher Motors down by 3.89%, Britannia down by 0.78%, NTPC down by 0.61%, Hero MotoCorp down by 0.55% and ITC down by 0.25% were the top losers.

All Asian markets were trading higher, Hang Seng increased 1113.92 points or 6.93% to 17,194.96, Shanghai Composite gained 63.29 points or 2.08% to 3,099.42, Taiwan Weighted strengthened 493.01 points or 3.65% to 13,996.77, Straits Times advanced 53.48 points or 1.69% to 3,226.66, KOSPI rose 80.56 points or 3.35% to 2,482.79, Jakarta Composite soared 84.39 points or 1.21% to 7,051.23 and Nikkei 225 surged 831.24 points or 3.03% to 28,277.34.