Benchmarks remain in green in morning deals

Indian equity benchmarks remained in green in morning deals, led by gains in Telecom, Basic Materials and Consumer Durables stocks. Traders took support with the latest HSBC Flash India PMI (Purchasing Manager’s Index) report showing that India's business activity extended its robust growth streak in August as a stronger services industry offset a slight slowing in manufacturing expansion. It also indicated price pressures also were easing. Those findings suggest India will hold on to its title of fastest-growing major economy over coming quarters despite expectations of a slowdown in the global economy. The report showed that the Composite PMI Output Index recorded an impressive 60.5, marking the 37th consecutive month of expansion. However, gains remain capped as traders remained cautious with an analysis by S&P Global Market Intelligence showing that dividend growth at some of India's largest banks is expected to slow after surging in the fiscal year ended March 31. It said the anticipated slowdown comes as the rising cost of deposits and heightened competition for customer savings puts pressure on bank margins and profits. On the global front, Asian markets are trading mostly in red as traders are a bit cautious after revised data showed US job growth was weaker than previously reported in the twelve months ended March 2024, raising some concerns about growth.

The BSE Sensex is currently trading at 81028.62, up by 123.32 points or 0.15% after trading in a range of 80954.02 and 81236.45. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.40%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Telecom up by 0.92%, Basic Materials up by 0.92%, Consumer Durables up by 0.70%, FMCG up by 0.58% and TECK up by 0.43%, while Utilities down by 0.61%, Power down by 0.57%, Realty down by 0.29%, Auto down by 0.08% and Energy down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.30%, Asian Paints up by 0.94%, Titan Company up by 0.63%, Tata Steel up by 0.59% and ICICI Bank up by 0.58%. On the flip side, Power Grid Corporation down by 0.96%, NTPC down by 0.78%, Tata Motors down by 0.68%, Mahindra & Mahindra down by 0.65% and TCS down by 0.50% were the top losers.

Meanwhile, ICRA in its latest report has said that the non-banking financial companies (NBFCs) shall witness headwinds related to funding availability, which is likely to impede growth vis-a-vis the robust expansion in the last two fiscals. It projects the growth of NBFC asset under management (AUM) to ease to 13-15% in FY25 from 18% in FY24. Standing at about Rs 47 trillion in March 2024, the sector AUM is set to cross Rs 50 trillion in FY25. 

It stated key challenges for meeting growth expectations, however, would be in accessing the required debt funding over and above the refinancing of existing debt. The estimated incremental debt funding for AUM expansion is Rs 5.6-6.0 trillion for FY25. Notwithstanding the sizeable demand and unmet credit requirements, the downside risk to the indicated NBFC AUM growth would accentuate, if the tight funding environment, as witnessed in Q1 FY25, continues for a prolonged period in the current fiscal.

A M Karthik, Senior Vice President & Co-Group Head Financial Sector Ratings, ICRA, said ‘The banking sector, a key lender to the NBFC segment, is expected to register an overall credit expansion of around 12% in FY25, resulting in an incremental bank credit of about Rs 19.0-20.5 trillion. This, however, is lower than the Rs 22 trillion credit expansion in the last fiscal. Further, the impact of tightening regulatory norms for bank funding to the sector, is already visible over the last few months. Incremental direct bank credit to the NBFCs in Q1 FY25 was a modest Rs 75 billion compared to Rs 920 billion in Q1 FY24.’

The CNX Nifty is currently trading at 24808.25, up by 38.05 points or 0.15% after trading in a range of 24784.45 and 24867.35. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.45%, Tata Consumer Product up by 2.28%, Bharti Airtel up by 1.31%, Asian Paints up by 1.08% and LTIMindtree up by 0.64%. On the flip side, Dr. Reddy's Lab down by 1.70%, Power Grid Corp down by 0.98%, NTPC down by 0.87%, Cipla down by 0.82% and Tata Motors down by 0.67% were the top losers.

Asian markets are trading mostly in red; Jakarta Composite plunged 32.45 points or 0.43% to 7,522.14, Shanghai Composite weakened 1.02 points or 0.04% to 2,855.56, Straits Times fell 11.88 points or 0.35% to 3,361.88, KOSPI dropped 1.11 points or 0.04% to 2,700.02 and Taiwan Weighted lost 127.38 points or 0.57% to 22,110.51.

On the flip side, Hang Seng advanced 69.53 points or 0.4% to 17,460.54 and Nikkei 225 surged 115.06 points or 0.3% to 38,066.86.