Benchmarks trim opening gains to trade flat in early deals

Indian bourses extended their previous session’s gains with optimistic start on Monday tracking gains in global peers. But, soon markets trimmed their most of the gains and are trading flat in early deals amid sharp rise in crude oil prices on Friday overnight. Initially, some support came in with a private report that industry leaders have expressed confidence in India’s economy being resilient in the face of global headwinds in uncertainties, with the Confederation of Indian Industries’ Business Confidence Index achieving its highest reading in two years for the October-December quarter. Though, some cautiousness came in as foreign investors offloaded around Rs 15,000 crore worth of Indian equities in the first two weeks of January amid risks of Covid in some parts of the world and recession worries in the US. Also, the Reserve Bank said India's forex reserves declined by $1.268 billion to $561.583 billion for the week ended January 6.

On the global front, Asian markets are trading mostly higher following the broadly positive cues from global markets on Friday, as upbeat consumer price inflation and consumer sentiment data from the U.S. raised hopes the US Fed will slow its pace of interest rate-hike trajectory in the coming months. Japanese market is lower amid speculation that the Bank of Japan will shift from its ultra-easy policy at its monthly monetary policy meeting on Wednesday.

Back home, IT stocks were in focus with a private report stating that India's IT services heavyweights delivered between 14-20 per cent on-year growth in topline for December quarter, as they raised guard on global uncertainties and choppy verticals, but remained hopeful that costs as well as business considerations will drive tech demand. In stock specific developments, HDFC Bank gained after it reported an 18.5% increase in its standalone net profit at Rs 12,259.5 crore for Q3FY23. However, D-Mart fell on lower-than-expected Q3 results.

The BSE Sensex is currently trading at 60295.66, up by 34.48 points or 0.06% after trading in a range of 60280.19 and 60586.77. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.21%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Utilities up by 0.59%, Power up by 0.55%, IT up by 0.40%, TECK up by 0.26%, Bankex up by 0.22%, while Metal down by 1.01%, Auto down by 0.51%, Oil & Gas down by 0.47%, Telecom down by 0.46%, Energy down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.11%, Wipro up by 1.11%, Bajaj Finserv up by 1.06%, HCL Technologies up by 1.03% and Ultratech Cement up by 0.85%. On the flip side, TCS down by 1.66%, Mahindra & Mahindra down by 0.84%, NTPC down by 0.83%, Tata Steel down by 0.71% and Maruti Suzuki down by 0.53% were the top losers.

Meanwhile, The Confederation of Indian Industry (CII) has said that its latest Business Confidence Index for the October-December quarter rebounded to highest reading in almost two years of 67.6 from 62.2 in the previous quarter, reflecting optimism around India being in a 'sweet spot' despite the rising global uncertainties. It added the sharp improvement in the value of the index was buttressed by subsiding of concerns around the impending recession and its impact on the Indian economy.

The Index is based on the findings of a survey of over 120 firms of varying sizes and across all industry sectors and regions of the country. However, a majority (70 per cent) of the survey respondents feel that the Indian economy will expand in a range of 6.5 per cent to 7.5 per cent in the current financial year ending March from 8.7 per cent in the last fiscal. It said ‘Growth is expected to moderate further in the next year on global headwinds. Hence, to support growth, it is critical that RBI refrains from raising the interest rates any further’.

The survey revealed that nearly half of the respondents (47 per cent) have indicated that they have already started feeling the impact of the policy rate hikes by the RBI on the overall economic activity. High interest rates have impinged on private investment levels too. Currently most of the heavy lifting to support growth is being done by public capex, with private capex playing a supporting role. Even as global economic growth is witnessing headwinds due to the tightening financial conditions and geopolitical tensions, an overwhelming 73 per cent of the survey respondents expect only a moderate impact on the Indian economy.

CII said the confidence among respondents stems from the fact that 86 per cent believe the government's focus on infrastructure is the biggest positive for the Indian economy, followed by improvement in tax collections and good consumption recovery. In addition to high borrowing costs, the prevailing heightened uncertainty has prevented firms from furthering their investment plans. However, the survey results present an encouraging prognosis with 90 per cent feeling that their company's investment cycle will recover during the next fiscal.

Around 52 per cent expect recovery during the first half of the next fiscal while about 37 per cent of them foreseeing a pickup in investments by the second half of the year. Nearly half of the survey respondents feel that the capacity utilisation levels in their companies would range between 75-100 per cent during the Oct-Dec quarter. CII said it is encouraging to note that given its bearing on the overall economy, a recovery in the rural demand is eagerly awaited and about 60 per cent of the respondents feel that a pick-up in rural consumption will take place in the next fiscal.

The CNX Nifty is currently trading at 17956.25, down by 0.35 points after trading in a range of 17950.20 and 18049.65. There were 16 stocks advancing against 33 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Bajaj Finance up by 1.10%, HCL Technologies up by 1.04%, Bajaj Finserv up by 0.98%, Wipro up by 0.94% and Ultratech Cement up by 0.75%. On the flip side, JSW Steel down by 1.78%, TCS down by 1.72%, BPCL down by 1.51%, Adani Enterprises down by 1.45% and Bajaj Auto down by 0.92% were the top losers.

Asian markets are trading mostly in green; Hang Seng surged 160.88 points or 0.74% to 21,899.54, Taiwan Weighted rose 100.48 points or 0.68% to 14,924.61, KOSPI advanced 21.40 points or 0.90% to 2,407.49 and Shanghai Composite was up by 46.04 points or 1.42% to 3,241.35. On the other hand, Nikkei 225 declined 337.76 points or 1.29% to 25,781.76, Straits Times lost 0.95 points or 0.03% to 3,292.80 and Jakarta Composite was down by 0.40 points or 0.01% to 6,641.43.