Markets trade above water in early deals after negative start

Indian equity benchmarks extend their previous session’s losses with negative start on Thursday. Trading sentiments remained subdued as most of the Asian markets are trading in red, following the broadly negative cues from global markets overnight, as lingering concerns about US lawmakers' ability to reach an agreement on increasing the U.S. debt ceiling continued. Soon, domestic markets wiped out their losses and are trading above neutral lines with marginal gains in early deals on account of bargain hunting after recent losses. Some support came in as Reserve Bank Governor Shaktikanta Das said the growth for 2022-23 is expected to be more than the advance estimate of 7 per cent on the back of economic momentum maintained in the third and fourth quarters of the last fiscal. Besides, broader indices are outperforming larger peers with gains of around 0.30%.  

On the sectoral front, IT stocks are in focus as S&P Global Ratings believe that Indian IT firms could see revenue decelerate by 5 per cent through FY25. Macroeconomic concerns, along with a cautious approach towards discretionary information technology (IT) spending, will likely impact the revenue. In stock specific developments, LIC rallied after its Q4 net profit surged nearly six-fold. ICRA rose on reporting a 15 percent rise in Q4 net profit. On the other hand, Hindalco Industries fell after it posted a 48 percent fall in its standalone net profit for the March quarter.

The BSE Sensex is currently trading at 61796.90, up by 23.12 points or 0.04% after trading in a range of 61599.27 and 61810.28. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.26%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Telecom up by 0.96%, FMCG up by 0.90%, Realty up by 0.60%, Healthcare up by 0.35% and Industrials up by 0.30%, while Metal down by 0.48%, Oil & Gas down by 0.15%, Energy down by 0.14%, IT down by 0.12% and Bankex down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.60%, Bharti Airtel up by 1.20%, Kotak Mahindra Bank up by 0.98%, Nestle up by 0.97% and Power Grid up by 0.87%. On the flip side, Tata Motors down by 1.11%, Wipro down by 0.73%, Indusind Bank down by 0.67%, HDFC down by 0.55% and SBI down by 0.52% were the top losers.

Meanwhile, expressing optimism over India’s economic situation, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the growth for 2022-23 is likely to be more than the advance estimate of 7 per cent on the back of economic momentum maintained in the third and fourth quarters of the last fiscal. He said ‘there is a possibility that it could be even more…it will not be a surprise if the GDP growth of last year comes slightly above 7 per cent’. As per the second advance estimate released by the National Statistical Office (NSO) in February, the economy is estimated to grow at 7 per cent in 2022-23 against 8.7 per cent in the preceding fiscal. 

He further said ‘In fact, all the high-frequency indicators, around 70 of them, which we monitored in the Reserve Bank of India, almost in all of these high-frequency indicators, the momentum was maintained in the fourth quarter. So therefore, we should not be surprised if the growth is slightly more than 7 per cent’. For the current financial year, he said the RBI has projected a growth rate of 6.5 per cent. 

About the global scenario, he said the coexistence of high inflation and banking stress is complicating the responses of central banks, as they face or trade-off between the risk of either straining financial markets or having to tolerate a longer period of high inflation. He also said ‘amidst these global uncertainties, the Indian banking system remains stable and resilient with strong capital and liquidity positions, improving asset quality better provisioning coverage and improved profitability’.

The CNX Nifty is currently trading at 18293.10, up by 7.70 points or 0.04% after trading in a range of 18236.50 and 18299.50. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.69%, Britannia Industries up by 2.16%, ITC up by 1.75%, Apollo Hospital Ent. up by 1.29% and Eicher Motors up by 1.25%. On the flip side, Hindalco down by 1.55%, Tata Motors down by 1.09%, Wipro down by 0.73%, HDFC down by 0.62% and Indusind Bank down by 0.59% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 395.53 points or 2.07% to 18,720.40, Jakarta Composite plunged 21.1 points or 0.31% to 6,724.70, Shanghai Composite weakened 21 points or 0.66% to 3,183.75, KOSPI dropped 14.51 points or 0.57% to 2,552.94 and Straits Times was down by 5.46 points or 0.17% to 3,208.75. On the other hand, Nikkei 225 surged 155.27 points or 0.51% to 30,837.95 and Taiwan Weighted was up by 141.42 points or 0.88% to 16,300.74.