Sensex gains over 100 points in early trade, Nifty above 17,850; ONGC, IOC gain over 3%

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The benchmark equity indices traded higher in the early trade on Wednesday. At 09:23 IST, the S&P BSE Sensex, was up 108.3 points or 0.18% to 59,853.18. The Nifty 50 index added 49.55 points or 0.28% to 17,871.85. Among the Nifty 50 stocks, ONGC (up 4.03%), IOC (up 3.19%), UPL (up 1.78%), Mahindra & Mahindra (up 1.35%) and Bajaj Finance (up 1.19%) were the top index gainers.

On the other hand, Divi’s Lab (down 0.81%), Titan Company (down 0.76%), IndusInd Bank (down 0.41%), SBI Life (down 0.40%) and Sun Pharma (down 0.39%) were the top index losers. In the broader market, the S&P BSE Midcap index rose 0.45% while the S&P BSE Smallcap index gained 0.72%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1,922 shares rose and 509 shares fell. A total of 75 shares were unchanged.

Economy:

Credit ratings agency Moody’s hiked India’s sovereign credit rating outlook to stable from negative, citing an improvement in the financial sector and faster-than expected economic recovery across sectors.

The decision to change the outlook to stable reflects Moody’s view that the downside risks from negative feedback between the real economy and financial system are receding, Moody’s said in a report on October 5.

It said that with higher capital cushions and greater liquidity, banks and non-bank financial institutions pose a much lesser risk to the sovereign than previously anticipated.

Stocks in spotlight:

Coal India added 2.17% to Rs 202.20. The company’s board has accorded in-principle approval to pre-feasibility report for setting up integrated greenfield aluminium project in Odisha which shall include bauxite mining, alumina refinery, aluminium smelter and associated captive power plant by its subsidiary Mahanadi Coalfields.

Marico advanced 1.86% to Rs 568.25. In the Indian business, the company witnessed healthy consumer sentiment across our categories. Revenue growth in the quarter was in the low twenties, with volume growth close to double-digits on a 2-year CAGR basis. The International business delivered double-digit constant currency growth as the company witnessed positive trends in all markets, except Vietnam.

Among key inputs, copra prices corrected further, crude remained firm, while edible oil prices oscillated at higher levels. As a result, the company expects modest bottom-line growth in the quarter. The operating margin is expected to contract on a year on year basis.

MTAR Technologies rose 2.56% to Rs 1514.65. CRISIL Ratings has upgraded long-term rating of company’s bank facilities to ‘CRISIL A-/Stable’ from ‘CRISIL BBB+/Positive’ and the short-term rating on the same to ‘CRISIL A2+’ from ‘CRISIL A2’.

Global markets:

Asian stocks are trading mixed on Wednesday, following an overnight bounce on Wall Street with stocks rebounding from Monday’s losses. Mainland Chinese markets remain closed on Wednesday for the holidays.

The Reserve Bank of New Zealand (RBNZ) on Wednesday raised its official cash rate to 0.5%, joining South Korea and Norway in being among the earliest countries to raise rates in the pandemic era.

The Committee noted that further removal of monetary policy stimulus is expected over time, with future moves contingent on the medium-term outlook for inflation and employment, the RBNZ said in a release.

In US, the major averages rebounded on Tuesday following a technology-centered market rout in the previous session.

In Washington, lawmakers are still trying to agree to raise or suspend the U.S. borrowing limit and avert a dangerous first-ever default on the national debt. The Treasury Department warned last week that lawmakers must address the debt ceiling before October 18 when officials estimate the U.S. will exhaust emergency efforts to honour its bond payments.

Treasury Secretary Janet Yellen said Tuesday she believes the economy would fall into a recession if Congress fails to raise the debt ceiling before a default on the US debt.

Investors are readying for the closely watched jobs report, which will be released on Friday.

The US trade deficit increased to a record $73.3 billion in August as a small gain in exports was swamped by a much larger increase in imports. The Commerce Department reported Tuesday that the monthly trade deficit increased 4.2% in August, rising to an all-time high, surpassing the previous record of $73.2 billion set in June.

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