Domestic indices trade firm in early deals; Nifty reclaims 17,050 mark

Indian equity benchmarks extended their previous session’s gains with gap-up opening on Friday tracking firm trend in Asian counterpart following the broadly positive cues from global markets overnight, as stocks rebounded from recent losses with risk sentiment improving after First Republic Bank and Credit Suisse secured a lifeline, which helped ease recent concerns about turmoil in the banking sector. Credit Suisse said it would borrow up to $54 billion from the Swiss National Bank to enhance its liquidity. Now, domestic indices trimmed some of their opening gains but continued their trade in green garnering around 0.50% in early deals. Value buying in counters such as Realty, Capital Goods and Industrials aided the markets. Sensex and Nifty are trading well above their crucial 57,900 and 17,050 levels, respectively.

However, some cautiousness prevailed in the markets amid continued foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) net sold shares worth Rs 282.06 crore on March 17. On the sectoral front, textile industry stocks were in focus as Cotton Association of India (CAI) further reduced its cotton crop estimate for the 2022-23 season to 313 lakh bales as production is expected to decline in Maharashtra, Telangana and Haryana. In stock specific development, Hindustan Aeronautics (HAL) surged after Defence Acquisition Council (DAC) cleared weapons procurement for capital acquisitions worth Rs 70,500 crore.

The BSE Sensex is currently trading at 57957.00, up by 322.16 points or 0.56% after trading in a range of 57911.99 and 58178.94. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.69%, while Small cap index WAS up by 0.86%.

The top gaining sectoral indices on the BSE were Realty up by 2.13%, Capital Goods up by 1.58%, Industrials up by 1.37%, Metal up by 1.29%, Utilities up by 1.21%, while FMCG down by 0.14% was the sole losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.88%, Infosys up by 1.76%, HCL Technologies up by 1.66%, Ultratech Cement up by 1.56% and Kotak Mahindra Bank up by 1.29%. On the flip side, ITC down by 1.18%, TCS down by 0.49%, NTPC down by 0.42%, Sun Pharma down by 0.35% and Bharti Airtel down by 0.34% were the top losers.

Meanwhile, rating agency Crisil in its annual growth forecast has projected India’s gross domestic product (GDP) growth at 6% in the next fiscal year (FY24), in line with consensus estimates, driven by an increased capex by the private sector. It added that the private sector capex is expected to deliver double-digit revenue growth for the second year on the trot. Besides, the economy is projected to grow 7 per cent this fiscal (FY23). The agency also sees the economy averaging 6.8 per cent growth over the next five fiscals. It further said it expects the corporate revenue to log in double-digit rise again next fiscal.

Crisil Chief Economist DK Joshi said a complex interplay of geopolitical events, stubbornly high inflation and sharp rate hikes to counter that have turned the global environment gloomier. On the domestic front, the peak impact of the rate hikes -- 250 basis points since May 2022, which has pushed interest rates above pre-Covid levels, will play out more in the next fiscal. He said retail inflation is expected to average 5 per cent in FY24 from 6.8 per cent in FY23, owing to the high-base effect and some softening of crude and commodity prices.

However, a good rabi harvest would help cool food inflation, provided the monsoons are normal while the slowing economy should moderate core inflation. Though, he said risks to inflation are tilted upward, given the ongoing heat wave and the World Meteorological Organization's prediction that an El Nino warming is likely over the next couple of months. On the external sector, Joshi said the country's external vulnerability is expected to decline with a narrower current account deficit (CAD) and modest short-term external debt.

While CAD is expected to narrow to 2.4 per cent of GDP or $8 billion next fiscal from an estimated 3 per cent of $100 billion this fiscal, its financing may face challenges as foreign portfolio flows remain volatile and external commercial borrowings are less attractive. In the corporate sector, Joshi said revenue growth is expected to touch double-digits in fiscal 2024 despite a global slowdown and interest rate hikes. This will be driven by a 10-12 per cent growth in revenue for non-commodity sectors despite the cooling prices.

The CNX Nifty is currently trading at 17070.30, up by 84.70 points or 0.50% after trading in a range of 17068.90 and 17145.80. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 2.96%, SBI Life Insurance up by 2.14%, Infosys up by 1.88%, Larsen & Toubro up by 1.73% and Adani Enterprises up by 1.67%. On the flip side, BPCL down by 1.27%, ITC down by 1.23%, Eicher Motors down by 0.80%, Hero MotoCorp down by 0.79% and TCS down by 0.61% were the top losers.

All Asian markets are trading higher; Hang Seng jumped 342.37 points or 1.78% to 19,546.28, Nikkei 225 surged 251.05 points or 0.93% to 27,261.66, Taiwan Weighted advanced 211.31 points or 1.39% to 15,432.43, Jakarta Composite gained 83.34 points or 1.27% to 6,649.07, Shanghai Composite strengthened 51.12 points or 1.56% to 3,278.01, Straits Times rose 26.04 points or 0.83% to 3,181.58 and KOSPI was up by 18.71 points or 0.79% to 2,396.62.