Markets trade in green in late morning deals

Indian equity markets continued to trade in green in late morning deals on the back of buying by funds and retail investors. Meanwhile, the broader indices on the BSE were trading mixed. Sentiments were positive as Indian rupee appreciating 3 paise to 81.76 against the dollar at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. There were some buzz in tyre related stocks as rating agency ICRA in its latest report has maintained its domestic tyre demand’s growth estimate at 6-8% for FY2023, driven primarily by strong growth in the original equipment manufacturers (OEM) segment and muted growth in replacement volumes. However, gains remained capped on concerns that rising COVID cases in China and strict pandemic curbs will weigh on global economic growth.

On the global front, Asian markets were trading mixed as imposition of stringent restrictions and lockdowns in several cities in China, including Shanghai and Beijing, amid a surge in new COVID cases raised concerns about the outlook for the global economy. Back home, on the BSE sectoral front,  traders were seen piling up positions in FMCG, Consumer Durables, Metal, Capital Goods and Industrials stocks, while selling was witnessed in Realty, Utilities, Oil & Gas, Power and Energy. In stock specific development, Kaynes Technology India made a stellar debut, with its shares listed at Rs 778, a 33 per cent premium over its issue price of Rs 587 per share on the National Stock Exchange (NSE). The stock started trade at Rs 775 on the BSE.

The BSE Sensex is currently trading at 61272.39, up by 127.55 points or 0.21% after trading in a range of 61073.68 and 61330.24. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index was up by 0.19%, while Small cap index down by 0.02%.

The top gaining sectoral indices on the BSE were FMCG up by 0.51%, Consumer Durables up by 0.41%, Metal up by 0.38%, Capital Goods up by 0.27% and Industrials up by 0.25%, while Realty down by 1.14%, Utilities down by 0.52%, Oil & Gas down by 0.52%, Power down by 0.48% and Energy down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.28%, Ultratech Cement up by 1.20%, NTPC up by 1.06%, Hindustan Unilever up by 0.80% and Titan Co up by 0.78%. On the flip side, Power Grid Corp down by 0.62%, Nestle down by 0.59%, Kotak Mahindra Bank down by 0.43%, SBI down by 0.18% and Wipro down by 0.15% were the top losers.

Meanwhile, rating agency ICRA in its latest report has maintained its domestic tyre demand’s growth estimate at 6-8% for FY2023, driven primarily by strong growth in the original equipment manufacturers (OEM) segment and muted growth in replacement volumes. It stated that OE demand shall witness a low double-digit growth supported by factors like easing supply-related headwinds in the passenger vehicle (PV) segment, improving two-wheeler (2W) demand, and strong growth in Commercial Vehicle (CV) segment amidst favourable macro-economic environment.

According to the report, replacement demand, which forms around two-third of tyre demand, is likely to witness mid-single digit growth in FY23 following a strong FY2022. It noted that growth in tyre exports from India was robust in FY2022 supported by healthy demand from key export destinations such as the US and European nations. However, it said the economic slowdown in the US and European nations is expected to impact export demand and growth is expected to be flat in FY2023. Over the next three years, tyre demand growth is pegged at 6-8% (CAGR) supported by stable replacement demand.

The report further said tyre industry has been investing around 10% of its revenues in capacity expansion over the past few years. It expects the industry to continue to invest around 10-12% of the revenues in the medium term. While part of the CAPEX shall be debt-funded, it said the credit profiles of tyre manufacturers would be supported by healthy earnings and cash reserves.

The CNX Nifty is currently trading at 18201.65, up by 41.70 points or 0.23% after trading in a range of 18137.70 and 18216.55. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 1.41%, Grasim Industries up by 1.33%, Divi's Lab up by 1.33%, NTPC up by 1.13% and Ultratech Cement up by 1.11%. On the flip side, Bajaj Auto down by 0.91%, BPCL down by 0.73%, Power Grid Corp down by 0.66%, Nestle down by 0.63% and ONGC down by 0.55% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 180.80 points or 0.66% to 28,128.59, Straits Times added 14.96 points or 0.54% to 3,265.58, Taiwan Weighted advanced 81.14 points or 0.57% to 14,530.53 and Shanghai Composite was up by 15.26 points or 0.72% to 3,100.30. On the other hand, Hang Seng fell 19.28 points or 0.12% to 17,620.63, KOSPI lost 8.80 points or 0.36% to 2,410.70 and Jakarta Composite was down by 3.00 points or 0.02% to 7,060.25.