Indian equity markets were trading in fine fettle on continued buying by funds and retail investors. Sensex and Nifty were trading above 55,900 and 16,650 levels, respectively, in the noon session due to buying in banking, metal and basic materials stocks. Gains in frontline blue chip stocks such as HDFC Bank, Kotak Mahindra Bank and ICICI Bank also helped to lift the markets. Traders took support with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the Indian economy is relatively better placed amid a turbulent global economic scenario, drawing strength from its strong macroeconomic fundamentals. Additional support came as Foreign Institutional Investors (FIIs) remained net buyers, buying shares worth Rs 1,799.32 crore on Thursday, exchange data showed. However, upside remain capped as Asian Development Bank (ADB) in its supplement to the Asian Development Outlook (ADO) for 2022 said that it has lowered the economic growth forecast for India for current financial year (FY23) to 7.2 per cent, with impacts of COVID-19 and Russia-Ukraine war getting exacerbated by high inflation. In April, it had forecast the Indian economy to grow by 7.5 per cent. On the global front, Asian markets were trading mostly in green mirroring Wall Street gains overnight after upbeat earnings results partially offsets global recession fears.

The BSE Sensex is currently trading at 55933.15, up by 251.20 points or 0.45% after trading in a range of 55685.45 and 56006.22. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index lost 0.08%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Bankex up by 1.34%, Metal up by 0.61%, Basic Materials up by 0.50%, Consumer Durables up by 0.42% and Auto was up by 0.34%, while TECK down by 0.99%, IT down by 0.97%, Power down by 0.83%, Utilities down by 0.75% and Oil & Gas was down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.91%, Kotak Mahindra Bank up by 1.82%, ICICI Bank up by 1.62%, Titan Company up by 1.49% and HDFC was up by 1.41%. On the flip side, Infosys down by 2.07%, NTPC down by 1.19%, Power Grid down by 0.99%, Indusind Bank down by 0.83% and Tech Mahindra was down by 0.77% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that annual revenue of around 49 auto ancillaries is expected to grow 8-10 percent in the current fiscal year (FY23) from Rs 3 lakh crore. It said the revenue increase is expected on the back of stable demand and gradual easing of supply-chain issues in FY23. It noted that stable demand from the OEM segment coupled with steadily increasing premiumization of vehicles, focus on localization, improved export potential and EV opportunities (resulting in higher content per vehicle) will translate into healthy growth prospects for auto component suppliers.

While cost pressures are likely to continue in the first half of the fiscal year, ICRA expects a year-on-year improvement of 50-75 basis points in operating margins in 2022-23, with easing of commodity prices and supply-chain issues. It said while the sharp rupee depreciation vis-a-vis USD could impact the cost structure of auto ancillaries with high import dependency, the impact on margins will be driven by the ability to pass through the same.

Besides, the report expects auto component suppliers to gradually increase their capital expenditure outlay in 2022-23 to 6-6.5 percent of operating income, translating into Rs 16,000-Rs 18,000 crores. It said the incremental investments will be primarily towards capability development, new product additions, and development of advanced technology and EV components, unlike the investments towards capacity expansion witnessed in the past. It added that the capex is expected to hover around 7-8 percent of operating income in FY2024 and FY2025, which is over Rs 20,000 crore each for FY2024 and FY2025.

The CNX Nifty is currently trading at 16680.50, up by 75.25 points or 0.45% after trading in a range of 16610.90 and 16704.80. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.50%, Eicher Motors up by 2.10%, HDFC Bank up by 1.93%, Kotak Mahindra Bank up by 1.84% and ICICI Bank was up by 1.69%. On the flip side, Infosys down by 2.13%, NTPC down by 1.29%, Power Grid down by 1.08%, Apollo Hospital down by 1.06% and BPCL was down by 1.05% were the top losers.

Asian markets were trading mostly in green; Straits Times advanced 29.76 points or 0.94% to 3,182.06, Jakarta Composite soared 28.45 points or 0.41% to 6,892.58, Taiwan Weighted strengthened 11.66 points or 0.08% to 14,949.36 and Nikkei 225 was up by 111.66 points or 0.4% to 27,914.66.

On the other hand, Hang Seng was down by 0.99 points to 20,573.64, Shanghai Composite declined 21.54 points or 0.66% to 3,250.46 and KOSPI was down by 16.02 points or 0.66% to 2,393.14.

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