Domestic equity indices remain in green in late morning deals

Domestic equity indices remained in green in late morning deals on account of buying in Capital Goods and banking stocks. Meanwhile, the broader indices were also trading in-line with benchmarks. Traders were getting encouragement as the government extended export benefits under the tax refund scheme -- RoDTEP -- to chemicals, pharmaceuticals and products of iron and steel for a specified period with a view to boost shipments of these goods, amidst exports growth recording a contraction of 16.65 per cent in October. Sentiments were further supported by Indian rupee appreciating 19 paise to 82.28 against the dollar at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks.

On the global front, Asian markets were mostly trading in red as traders expressed concerns about the outlook for interest rates and a global recession.  The Japanese stock market was significantly lower, extending the losses of the previous session, following the mixed cues from Wall Street overnight, with weakness across most sectors, led by technology and financial stocks. Back home, in stock specific development, Sun Pharmaceutical Industries slipped after the company said that the US health regulator has put its manufacturing facility at Halol under import alert.

The BSE Sensex is currently trading at 62492.31, up by 81.63 points or 0.13% after trading in a range of 62320.18 and 62633.56. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index up by 0.26%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.79%, Bankex up by 0.67%, Industrials up by 0.56%, Telecom up by 0.34% and PSU up by 0.20%, while Healthcare down by 0.72%, Realty down by 0.47%, Utilities down by 0.45%, Power down by 0.41% and IT down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.36%, Larsen & Toubro up by 1.38%, Indusind Bank up by 1.27%, Mahindra & Mahindra up by 0.93% and ICICI Bank up by 0.77%. On the flip side, Sun Pharma down by 3.06%, Power Grid Corp down by 1.42%, Kotak Mahindra Bank down by 1.16%, TCS down by 0.72% and NTPC down by 0.47% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that the many rising headwinds, both domestic as well as external, are expected to pull down India’s Gross domestic product (GDP) growth to 4-4.5 per cent in the second half of FY2023 (H2FY23), shaving off the better numbers in the first half. It noted that in the first half of the current fiscal, the economy has grown at 9.7 per cent -- 6.3 per cent in the September quarter and 13.5 per cent in the previous three months, and forecasts for the full year vary from a low of 6.6 per cent to 7 per cent.

The report said notwithstanding this, the economy still has a lot of ground to cover which was lost due to the pandemic as the CAGR during Q1FY20-Q2FY23 works out to be a paltry 2.5 per cent, significantly lower than the CAGR of 5.3 per cent during Q2FY17-Q2FY20. Even at the disaggregate level, key employment-intensive sectors like manufacturing and trade, hotels, transport and communication clipped at a CAGR of just 2 per cent and 0.7 per cent, respectively during this period while the CAGR for Q2FY17-Q2FY20 were 3.4 and 8.1 per cent, respectively.

The report also pointed to the muted wage growth at the lower end of the income pyramid, resulting in a skewed recovery of consumption demand. A broad-based recovery in consumption demand is imperative for sustained growth. The road ahead will not be without hiccups as synchronous global monetary tightening has increased financial fragility and downside risks to global growth which would impact the Indian economy as well. It also noted the nascent industrial output growth, which fell to an eight-quarter low of 1.5 per cent in Q2FY23 from 9.5 per cent on-year.

The CNX Nifty is currently trading at 18583.70, up by 23.20 points or 0.12% after trading in a range of 18536.95 and 18625.00. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.46%, Eicher Motors up by 1.57%, Indusind Bank up by 1.37%, Larsen & Toubro up by 1.31% and Mahindra & Mahindra up by 0.80%. On the flip side, Sun Pharma down by 2.96%, Power Grid Corp down by 1.43%, HDFC Life Insurance down by 1.25%, Kotak Mahindra Bank down by 1.17% and TCS down by 0.78% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 116.73 points or 0.42% to 27,569.67, Taiwan Weighted dropped 76.97 points or 0.53% to 14,553.04, Shanghai Composite declined 4.51 points or 0.14% to 3,195.11, KOSPI fell 15.74 points or 0.66% to 2,367.07 and Jakarta Composite lost 66.28 points or 0.97% to 6,752.47.  However, Straits Times advanced 13.32 points or 0.41% to 3,238.77 and Hang Seng increased 530.07 points or 2.82% to 19,344.89.