Sensex, Nifty trade in green during early noon deals

Indian equity benchmarks staged recovery and now are trading in green during early afternoon deals, aided by positive cues from other Asian markets along with heavy buying at Metal and Telecom counters. Sentiments were positive, after Secretary in Department for Promotion of Industry and Internal Trade (DPIIT) Anurag Jain said India has the third largest startup ecosystem in the world and the way startups here are performing; soon the country will become a top ecosystem globally. He also said that the country's startups will attract significant foreign direct investments (FDI) in 2023 on account of steps being taken by the government to strengthen the ecosystem for budding entrepreneurs.

However, gains were limited, as traders were cautious after credit rating agency, India Ratings and Research (Ind-Ra) in its ‘December Credit Market Tracker’ has forecasted that the core inflation is likely to remain elevated in the remaining FY23, given that there is a pending pass-through of higher input costs by producers and a continued robust demand in the economy.

On the global front, Asian markets were trading mostly in green, even after China's industrial profits declined at a faster rate in the January to November period as slowing demand and the resurgence of Covid cases weighed on industrial activity. The National Bureau of Statistics reported that industrial profits decreased 3.6 percent in January to November period, which was bigger than the 3.0 percent decline in January to October.

The BSE Sensex is currently trading at 60668.53, up by 102.11 points or 0.17% after trading in a range of 60405.66 and 60970.63. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.43%, while Small cap index was up by 1.20%.

The top gaining sectoral indices on the BSE were Metal up by 3.12%, Telecom up by 1.36%, Utilities up by 1.21%, Power up by 1.15% and Realty up by 0.98%, while Bankex down by 0.13% and FMCG down by 0.02% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.14%, Tata Motors up by 2.25%, Asian Paints up by 1.40%, Bajaj Finance up by 1.31% and Wipro up by 1.06%. On the flip side, Hindustan Unilever down by 0.82%, HDFC Bank down by 0.54%, NTPC down by 0.36%, Indusind Bank down by 0.34% and Mahindra & Mahindra down by 0.28% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its ‘December Credit Market Tracker’ has forecasted that the core inflation is likely to remain elevated in the remaining FY23, given that there is a pending pass-through of higher input costs by producers and a continued robust demand in the economy. The country’s retail inflation, measured by the Consumer Price Index (CPI), decreased to 5.88 per cent in the month of November 2022 as compared to 6.77 per cent in October 2022.

As per the report, the surplus liquidity in the banking system has improved in December 2022 compared to November 2022. The surplus liquidity rose moderately to Rs 1115 billion (average up to December 19, 2022) from Rs 454 billion (average for November 2022), largely driven by foreign inflows to equity market and government spending.

According to the LAF data, the Reserve Bank of India (RBI) injected liquidity in the banking system in November 2022 to offset the tightening liquidity. However, it said that the liquidity conditions may tighten further due to a deficit in India’s balance of payments in FY23 and a seasonal uptick in the currency leakage in Q4.

The CNX Nifty is currently trading at 18067.35, up by 52.75 points or 0.29% after trading in a range of 17967.45 and 18134.05. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.24%, Hindalco up by 3.93%, JSW Steel up by 3.45%, Tata Motors up by 2.26% and ONGC up by 2.02%. On the flip side, Hindustan Unilever down by 0.81%, HDFC Bank down by 0.64%, NTPC down by 0.36%, BPCL down by 0.34% and Indusind Bank down by 0.34% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 42.00 points or 0.16% to 26,447.87, Shanghai Composite gained 30.25 points or 0.99% to 3,095.81, Taiwan Weighted strengthened 43.30 points or 0.3% to 14,328.43, Jakarta Composite soared 64.59 points or 0.94% to 6,900.40, KOSPI rose 15.65 points or 0.68% to 2,332.79 and Straits Times advanced 12.07 points or 0.37% to 3,269.77.