Benchmarks trade marginally in green in morning deals

Indian equity benchmarks erased initial losses and were trading marginally in green in morning deals, driven by well-received earnings reports from some blue-chip firms. Traders took some support with the Reserve Bank of India’s (RBI’s) January 2023 Bulletin stating that lead indicators suggest that domestic current account deficit (CAD) is likely to reduce in 2023, while macro-economic stability has received a boost from inflation being brought back to the official tolerance band. Some support also came as provisional data available on the NSE showing that foreign institutional investors (FII) bought shares worth Rs 399.98 crore on January 19, 2023. Traders also took a note of a private report that the Indian government is likely to set a conservative target for the funds it can raise through the disinvestment of state enterprises in fiscal 2024 after mop-up fell short this year.

On the global front, Asian markets are trading higher amid expectations that the U.S. Federal Reserve might end its tightening cycle after a 25-basis point hike at each of its next two policy meetings. Back home, aviation industry stocks remained in watch as aviation regulator DGCA said domestic air traffic continued to register growth as passengers carried by domestic airlines during January-December 2022 were 12.32 crore as against 8.38 crore during the corresponding period of previous year thereby registering annual growth of 47.05 per cent and monthly growth of 13.69 per cent.

The BSE Sensex is currently trading at 60934.50, up by 76.07 points or 0.12% after trading in a range of 60736.65 and 60960.00. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.01%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Bankex up by 0.70%, PSU up by 0.69%, Capital Goods up by 0.53%, Industrials up by 0.45% and Power up by 0.40%, while Consumer Durables down by 0.83%, Telecom down by 0.68%, FMCG down by 0.66%, Realty down by 0.11% and Healthcare down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.27%, HDFC up by 1.18%, Tata Motors up by 1.04%, Indusind Bank up by 1.00% and Power Grid Corporation up by 0.95%. On the flip side, Hindustan Unilever down by 2.85%, Asian Paints down by 2.13%, Nestle down by 1.20%, Sun Pharma down by 1.05% and Bharti Airtel down by 0.82% were the top losers.

Meanwhile, Moody's Investors Service in its latest report on the banking sector in emerging markets has said the asset quality of Indian banks and those in Southeast Asian countries will be stable in 2023. It stated Indian banks will benefit from a stable operating environment and significant improvements in their solvency metrics.

According to report, the rising interest rates amid high inflation will lead to gradual increases in margins, supporting banks' revenue. On the other hand, higher debt-servicing costs and slowing economic growth pose asset risks for banks, although they are well positioned to cope with potential growth in problem loans thanks to prudent underwriting standards and ample reserves.

Further, it said inflation rates will fall but remain high in 2023 while economic slowdown is likely to be moderate. Capital inflows support funding and liquidity of the banks in emerging markets. During the first nine months of 2022, capital inflows into India stood at over 2 per cent of its gross domestic product. It also said the emerging markets face the double whammy of inflation and currency depreciation.

The CNX Nifty is currently trading at 18124.10, up by 16.25 points or 0.09% after trading in a range of 18069.35 and 18136.40. There were 23 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.59%, HDFC Bank up by 1.28%, HDFC up by 1.16%, Tata Motors up by 0.99% and SBI up by 0.92%. On the flip side, Hindustan Unilever down by 2.82%, Asian Paints down by 2.10%, Nestle down by 1.41%, JSW Steel down by 1.19% and Sun Pharma down by 1.05% were the top losers.

All Asian markets are trading higher; Hang Seng advanced 254.81 points or 1.18% to 21,905.79, Shanghai Composite strengthened 18.77 points or 0.58% to 3,259.05, KOSPI increased 11.24 points or 0.47% to 2,391.58, Jakarta Composite gained 9.27 points or 0.14% to 6,829.18, Straits Times rose 18.6 points or 0.57% to 3,294.78 and Nikkei 225 surged 112.38 points or 0.43% to 26,517.61.