Markets trade higher with marginal gains in early deals on bargain hunting

Indian equity benchmarks made cautious start on Monday amid weak global cues, following Silicon Valley Bank crisis. But, soon markets gained traction and are trading higher with marginal gains of around 0.20% each in early deals. Buying in beaten-down but fundamentally strong stocks added to the upside on the domestic indices. Growth in industrial production of the country also lend some support to the markets. India’s industrial production growth perked up slightly to 5.2 per cent in January from 4.7 per cent in December 2022, mainly due to good performance of the power, mining and manufacturing sectors. Adding more optimism on the street, the Central Board of Direct Taxes (CBDT) said net direct tax collection so far this fiscal grew 17 per cent to reach Rs 13.73 lakh crore, which is 83 per cent of the revised target for the full financial year. Though, upside remained limited as investors are awaiting the retail inflation data to be out later in the day.

On the global front, Asian markets are trading mixed as traders remain cautious and assess the fallout of the biggest US bank failure since the 2008 financial crisis. Data showing an increase in U.S. unemployment rate, and a drop in wage growth also raised concerns the US Fed will continue to remain aggressive with regard to interest rate hikes this month. Back home, auto stocks are under pressure as SIAM said that exports of two-wheelers, passenger vehicles and three-wheelers from India declined by 35 per cent in February mainly due to the weakening of currencies against the US dollar in destination countries, especially in the African continent. In stock specific development, Adani Enterprises rallied after the conglomerate fully prepaid margin-linked share-backed loans worth $2.2 billion (Rs 20,494 crore) way ahead of their maturity date.

The BSE Sensex is currently trading at 59254.35, up by 119.22 points or 0.20% after trading in a range of 59011.36 and 59510.92. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.45%, while Small cap index was down by 0.80%.

The top gaining sectoral indices on the BSE were Utilities up by 0.90%, Power up by 0.82%, Metal up by 0.41%, IT up by 0.35%, Oil & Gas up by 0.24%, while Consumer Durables down by 0.72%, Auto down by 0.54%, Telecom down by 0.37%, Healthcare down by 0.24%, Realty down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 8.54%, Power Grid up by 1.13%, Kotak Mahindra Bank up by 0.83%, Larsen & Toubro up by 0.70% and HDFC Bank up by 0.61%. On the flip side, Indusind Bank down by 5.03%, Tata Motors down by 0.83%, Infosys down by 0.72%, Titan Company down by 0.51% and NTPC down by 0.44% were the top losers.

Meanwhile, in line with good performance of the power, mining and manufacturing sectors, India's industrial production growth perked up slightly to 5.2 per cent in January 2023 from 4.7 per cent in December 2022. There was an improvement on an annual as well as sequential basis. The factory output growth measured in terms of the Index of Industrial Production (IIP) stood at 2 per cent in January 2022. For the month of January 2023, the Quick Estimates of IIP with base 2011-12 stood at 146.5. For the first 10 months of the current fiscal (April-January), the growth in IIP works out to be 5.4 per cent, down from 13.7 per cent in the year-ago period.

As per the IIP data released by the National Statistical Office (NSO), the manufacturing sector's output grew 3.7 per cent in January 2023 from 1.9 per cent a year ago. Mining output rose 8.8 per cent during the month under review compared to 3 per cent in January 2022. Power generation also surged 12.7 per cent in January 2023 against 0.9 per cent in the year-ago month. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of January 2023 stood at 135.9, 144.3 and 186.6 respectively.

The capital goods segment recorded a growth of 11 per cent in January against a growth of 1.8 per cent in the corresponding month of the last fiscal. Consumer durables output declined by 7.5 per cent compared to a contraction of 4.4 per cent a year ago. Consumer non-durable goods output expanded by 6.2 per cent against a growth of 3.1 per cent earlier. Infrastructure/construction goods too posted a growth of 8.1 per cent compared to a 5.9 per cent expansion in the same month of 2022. The data also showed that the output of primary goods logged 9.6 per cent growth in the month against 1.6 per cent in the year-ago period. The intermediate goods output growth decelerated to 0.1 per cent from 2.5 per cent earlier.

As per Use-based classification, the indices stood at 149.6 for Primary Goods, 105.3 for Capital Goods, 153.6 for Intermediate Goods and 171.7 for Infrastructure/ Construction Goods for the month of January 2023. Further, the indices for Consumer durables and Consumer non-durables stood at 109.6 and 164.0 respectively for the month of January 2023.

The CNX Nifty is currently trading at 17453.55, up by 40.65 points or 0.23% after trading in a range of 17386.95 and 17529.90. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 8.60%, Apollo Hospital up by 1.87%, Adani Enterprises up by 1.65%, Power Grid up by 1.13% and Grasim Industries up by 0.88%. On the flip side, Indusind Bank down by 5.05%, Hero MotoCorp down by 0.86%, Tata Motors down by 0.85%, Infosys down by 0.76% and Titan Company down by 0.58% were the top losers.

Asian markets are trading mixed; Hang Seng advanced 436.8 points or 2.26% to 19,756.72, Taiwan Weighted added 32.53 points or 0.21% to 15,558.73, Shanghai Composite strengthened 24.45 points or 0.75% to 3,254.53 and KOSPI increased 5.55 points or 0.23% to 2,400.14. On the other hand, Nikkei 225 slipped 399.59 points or 1.42% to 27,744.38, Straits Times fell 22.05 points or 0.69% to 3,155.38 and Jakarta Composite plunged 2.1 points or 0.03% to 6,763.20.