Domestic indices extend opening gains; TCS gains over 2% ahead of result

Indian equity indices made optimistic opening of new week tracking firm global cues. Soon, domestic markets gained traction and are trading firm with gains of around a percent each in early on Monday ahead of the earnings season, which will kick off with Tata Consultancy Services' (TCS) results, due later in the day. Sensex and Nifty reclaimed their crucial 60,400 and 18,000 levels, respectively. Board based buying in IT and TECK stocks also aided the sentiments. Some support came in as latest central bank data showed that the Reserve Bank of India’s foreign exchange reserves rose by $44 million to $562.85 billion in the week ended December 30. Meanwhile, advanced estimates of National Income for 2022-23 revealed by the National Statistical Office (NSO) showed that Indian economy is likely to grow at 7 per cent in 2022-23 as compared to 8.7 per cent in 2021-22.

On the global front, Asian markets are trading higher following the broadly positive cues from global markets on Friday, as data showing a drop in U.S. wage growth to a 50-year low and a contraction in U.S. service sector activity in the month of December helped ease concerns about aggressive policy tightening by the US Federal Reserve. Meanwhile, the Japanese stock market is closed on account of Coming of Age holiday. Back home, in stock specific developments, Kalyan Jewelers soared as it reported consolidated revenue growth of 13 percent for the December quarter. On the other hand, Jaiprakash Associates tumbled after defaulting on loans of Rs. 4,059 crore.

The BSE Sensex is currently trading at 60482.23, up by 581.86 points or 0.97% after trading in a range of 60109.94 and 60506.11. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index soared 0.96%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were IT up by 2.20%, TECK up by 2.06%, Metal up by 1.38%, Telecom up by 1.21%, Capital Goods up by 1.08%, while Consumer Durables down by 0.80% was the sole losing index on BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.24%, TCS up by 2.87%, HCL Technologies up by 2.49%, Wipro up by 2.16% and Bharti Airtel up by 2.15%. On the flip side, Titan Company down by 2.05% and ICICI Bank down by 0.28% were the only losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das said that taming inflation is the top priority for South Asian countries like India as an unchecked price rise may pose risk to growth and investment outlook. He said rising levels of debt, alongside sustained price pressures, pose risks to the region's economic growth and both must be contained. He noted that multiple external shocks in the form of COVID-related global supply chain disruptions, food and energy crisis following the war in Ukraine, and financial market volatility arising from the aggressive monetary policy tightening have exerted sustained price pressures in the South Asian economies. During the first three quarters of 2022, food price inflation in South Asia averaged more than 20 per cent.

He said ‘while the recent softening of commodity prices and supply chain bottlenecks should help in lowering seinflation going ahead, risks to growth and investment outlook may rise if inflation persists at a high level’. He said the region's heavy dependence on imported fossil fuels has made it vulnerable to imported fuel inflation. He said ‘for successful disinflation, credible monetary policy actions accompanied by targeted supply side interventions, fiscal, trade policy and administrative measures have become the key instruments’. He said ‘The approach to disinflation, however, needs to be mindful of the rising risks to the growth outlook in an environment of deteriorating prospects for global growth and trade activity’.

Apart from inflation, he said reducing external debt vulnerabilities, moving focus to highly productive sectors, strengthening energy security, cooperation on a greener economy and increasing tourism should be focus areas for the region. Underscoring the importance of multilateral agencies in assisting the countries in the region, he said ‘The surge in external debt in recent years and associated vulnerabilities have undermined macroeconomic stability in several countries of the South Asian region’. He said ‘The role of multilateral organisations, particularly the IMF and the World Bank, becomes crucial in making debt treatment efforts more effective, while also strengthening the mechanism of recording, reporting and analysis of debt data so as to enhance transparency and preserve debt sustainability’, and added deep structural reforms in the region were necessary.

The CNX Nifty is currently trading at 18036.85, up by 177.40 points or 0.99% after trading in a range of 17936.15 and 18041.85. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.01%, TCS up by 2.72%, HCL Technologies up by 2.63%, Tata Motors up by 2.21% and Bharti Airtel up by 2.14%. On the flip side, Titan Company down by 2.18%, Eicher Motors down by 0.23% and ICICI Bank down by 0.05% were the few losers.

Asian markets are trading in green; Straits Times rose 17.37 points or 0.53% to 3,294.09, Hang Seng surged 336.77 points or 1.60% to 21,328.41, Taiwan Weighted jumped 286.45 points or 1.99% to 14,659.79, KOSPI advanced 50.43 points or 2.20% to 2,340.40, Jakarta Composite added 5.80 points or 0.09% to 6,690.36 and Shanghai Composite was up by 16.69 points or 0.53% to 3,174.33.