Positive trade continues over Dalal Street in early noon deals

Positive trade continued over the Dalal Street in early afternoon session, with both Sensex and Nifty managing to hold their heads in green terrain, aided by firm cues from other Asian markets along with buying at Realty and Utilities counters. Sentiments remained positive, as Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has stated that the corporate rating upgrades continue to outpace the downgrades in July 2023, as it upgraded 20 ratings in July 2023 (June 2023: 29) while downgrading 10 ratings (June 2023: 9). As per the report, the upgrades were mainly in the realty, power and auto & auto components sectors in the reported month. 

On the global front, Asian markets were trading higher, even after the unemployment rate in Japan came in at a seasonally adjusted 2.7 percent in July. That exceeded expectations for 2.5 percent, which would have been unchanged from the June reading. The jobs-to-applicant ratio ticked down to 1.29, shy of forecasts for 1.30, which again would have been unchanged. 

Back home, IT sector related stocks were in watch, as a domestic ratings company Icra Ratings said that Indian IT services sector's revenue growth will slow down to 3 per cent in the current fiscal from 9.2 per cent in the previous financial year. Icra Ratings said the profitability will also take a beating in this financial year and the operating profit margin will narrow by up to 1 percentage point to 20-21 per cent.

The BSE Sensex is currently trading at 65106.33, up by 109.73 points or 0.17% after trading in a range of 64994.97 and 65229.03. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.54%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Realty up by 1.77%, Utilities up by 1.06%, Metal up by 0.87%, Power up by 0.83% and Capital Goods up by 0.49%, while Telecom down by 0.33% and FMCG down by 0.19% were the only losing indices on BSE.

The top gainers on the Sensex were Jio Financial Services up by 2.29%, Power Grid Corporation of India up by 1.53%, Tech Mahindra up by 1.35%, Tata Motors up by 1.25% and JSW Steel up by 1.11%. On the flip side, Bharti Airtel down by 1.38%, Axis Bank down by 0.77%, Indusind Bank down by 0.69%, Reliance Industries down by 0.59% and Hindustan Unilever down by 0.49% were the top losers.

Meanwhile, the government has said that India's automotive industry is poised to rank number three in the world by 2030, with various schemes like the Rs 25,938 crore Production Linked Incentive (PLI) for Automobile and Auto Components supporting the sector's growth. Ministry of Heavy Industries (MHI) considers the PLI-Auto applicants of automotive industry as one of the crucial stakeholders of the scheme.

It emphasized that the goal of deep localization and development of Advanced Automotive Technology (AAT) products within the country cannot be achieved without the support and growth of the automotive industry. The automotive industry in India is one of the main pillars of the economy. With strong backward and forward linkages, it is a key driver of growth. The contribution of this sector to the national GDP has risen to about 7.1 per cent from 2.77 per cent in 1992-93. It provides direct and indirect employment to over 19 million people.

In the automobile market in India, two-wheelers and passenger cars accounted for 77 per cent and 18 per cent market share respectively during 2021-22. Passenger car sales are dominated by small and mid-sized cars. India aims to double its auto industry size to Rs 15 lakh crore by end of year 2024. There has been an FDI inflow of $33.77 billion in the industry from April 2000 till September 2022 which is around 5.48 per cent of the total FDI inflows in India during the same period.

The CNX Nifty is currently trading at 19350.40, up by 44.35 points or 0.23% after trading in a range of 19313.65 and 19377.90. There were 41 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Jio Financial Services up by 2.75%, UPL up by 2.32%, Hindalco up by 2.25%, Adani Enterprises up by 2.01% and Adani Ports and Special Economic Zone up by 1.99%. On the flip side, Bharti Airtel down by 1.44%, Axis Bank down by 0.82%, Reliance Industries down by 0.78%, Indusind Bank down by 0.75% and Hindustan Unilever down by 0.60% were the top losers.

All Asian markets were trading higher; Hang Seng advanced 359.83 points or 1.98% to 18,490.57, Shanghai Composite strengthened 32.23 points or 1.04% to 3,130.87, Taiwan Weighted added 114.39 points or 0.69% to 16,623.65, Jakarta Composite gained 28.03 points or 0.4% to 6,949.76, KOSPI increased 8.75 points or 0.34% to 2,552.16, Straits Times rose 7.49 points or 0.23% to 3,221.17 and Nikkei 225 surged 56.98 points or 0.18% to 32,226.97.