Domestic indices remain in green in afternoon session

Domestic equity indices remained in positive in afternoon session as market participants indulged in enlarging positions. Meanwhile, the session was also proving good for broader indices which were trading with gains in the range of 0.50-0.55%. The sentiments were supported by Indian rupee appreciating 5 paise to 82.79 against the dollar at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. Traders were seen pilling up position in Utilities, Power, Oil & Gas, Energy and Metal, while selling was witnessed only in Capital Goods and Industrials. Adani Group companies were trading higher for a third straight day after an interim report by the Supreme Court (SC)-appointed panel last Friday did not find any conclusive evidence to support allegations made by the US-based short seller Hindenburg Research.

On the global front, Asian markets were trading mixed as investors were watching private surveys on Japan’s manufacturing and services activity released today, as well as Singapore’s inflation numbers for April. Back home, there was some buzz in automobile industry related stock as private report stated that Indian automakers are considering making investments of around $10 billion or Rs 80,000 crore, in a bid to provide a stronger push to electric vehicle (EV) manufacturing in the country. The investment will be made to build a robust infrastructure for the EV ecosystem.

The BSE Sensex is currently trading at 62184.17, up by 220.49 points or 0.36% after trading in a range of 62061.24 and 62245.19. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.50%.

The top gaining sectoral indices on the BSE were Utilities up by 1.61%, Power up by 1.31%, Oil & Gas up by 1.24%, Energy up by 0.87% and Metal up by 0.83% while, Capital Goods down by 0.29% and Industrials down by 0.02% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.22%, Indusind Bank up by 1.43%, Infosys up by 1.31%, Wipro up by 1.15% and Tata Motors up by 1.03%. On the flip side, Kotak Mahindra Bank down by 1.16%, Larsen & Toubro down by 0.70%, Titan down by 0.26%, Ultratech Cement down by 0.20% and Bharti Airtel down by 0.10% were the top losers.

Meanwhile, think tank Global Trade Research Initiative (GTRI) in its report has said that the government should not extend financial support under the production-linked incentive scheme (PLI) to small firm-dominated products like leather shoes and handicrafts as the move may shift business away from those enterprises. It said small firms need assistance like access to technology and low-cost finance and not PLI. It also said PLI for industries like food processing or auto, where many domestic manufacturers make similar products, introduces competitive distortion by giving money to a few firms.

GTRI said PLI money at the rate 4-6 per cent of incremental sales could increase profit margins by 30-40 per cent, giving a considerable price advantage over others. It said non-PLI recipients suffer for no fault and the scheme should avoid incentivizing such sectors. It should focus only on cutting-edge product groups where India has no manufacturing capabilities.

The report suggested the introduction of PLI for clean energy technology, incentivizing local production of components and not the final product, PLI for developing expertise in basic sciences, chemistry, metals, and electronics, and for setting up industrial labs for reverse engineering. It said given the upcoming carbon border taxes by the EU and soon by other countries, India must invest in clean energy technologies.

The CNX Nifty is currently trading at 18400.55, up by 86.15 points or 0.47% after trading in a range of 18349.75 and 18413.95. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 12.47%, Divi's Lab up by 4.04%, Adani Ports up by 2.37%, Bajaj Finserv up by 2.33% and BPCL up by 1.94%. On the flip side, Kotak Mahindra Bank down by 1.11%, Grasim Industries down by 0.89%, Larsen & Toubro down by 0.63%, HDFC Life Insurance down by 0.45% and ONGC down by 0.39% were the top losers.

Asian markets were trading mixed; Taiwan Weighted added 7.14 points or 0.04% to 16,188.03, KOSPI increased 10.09 points or 0.39% to 2,567.17, Jakarta Composite gained 25.17 points or 0.37% to 6,754.82 and Straits Times rose 8.63 points or 0.27% to 3,219.72. However, Nikkei 225 slipped 129.05 points or 0.42% to 30,957.77, Hang Seng declined 136.61 points or 0.69% to 19,541.56 and Shanghai Composite weakened 29.2 points or 0.89% to 3,267.27.