Domestic indices trade above neutral lines in late morning deals

Domestic equity indices traded above neutral lines in late morning deals on account of buying in Tata Motors, Mahindra & Mahindra, ICICI Bank and Bharti Airtel companies’ stocks. Traders were getting some encouragement after the finance ministry, in the monthly economic report for July, maintained a positive stance on the economy, keeping the growth forecast at 6.5-7 per cent for the current financial year (2024-25/FY25). The sentiments were further supported by Indian rupee appreciating 6 paise to 83.87 against the dollar at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. On the BSE sectoral front, traders were seen pilling up positions in Auto, Capital Goods, Consumer Disc, Industrials and Metal, while selling was witnessed in Realty, IT, TECK, Basic Materials and FMCG. 

On the global front, Asian markets were trading mixed as investors awaited U.S. Federal Reserve Chairman Jerome Powell’s comments at Jackson Hole gathering of global central bankers. Traders took a note of the data report from Japan showing the country’s headline inflation at 2.8% in July, unchanged from the previous month. Core inflation, which strips out prices of fresh food, stood at 2.7%, in line with expectations and higher than June’s figure of 2.6%. Back home, in the stock specific development, Zomato surged after the Zomato chief executive officer Deepinder Goyal said that they have discontinued their intercity food delivery service Legends as it could not find product market fit.

The BSE Sensex is currently trading at 81149.98, up by 96.79 points or 0.12% after trading in a range of 80883.26 and 81231.49. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.13%, while Small cap index up by 0.18%.

The top gaining sectoral indices on the BSE were Auto up by 1.13%, Capital Goods up by 0.63%, Consumer Disc up by 0.55%, Industrials up by 0.52% and Metal up by 0.43%, while Realty down by 1.07%, IT down by 0.59%, TECK down by 0.39%, Basic Materials down by 0.22% and FMCG down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.92%, Mahindra & Mahindra up by 0.98%, Sun Pharma up by 0.92%, ICICI Bank up by 0.78% and Bharti Airtel up by 0.66%. On the flip side, Infosys down by 0.78%, Titan down by 0.63%, Tech Mahindra down by 0.57%, TCS down by 0.57% and Asian Paints down by 0.35% were the top losers.

Meanwhile, rating agency CRISIL in its latest report has said that the Indian cement industry has lined up a capital expenditure (capex) of around Rs 1.25 lakh crore for FY25 to FY27 to meet the growing demand. During this period, the industry is expected to add 130 million tonne of cement grinding capacity, which is a fifth of the existing capacity. It said the investment will be driven by healthy demand outlook and the quest for market share, and the low capex intensity and strong balance sheets will keep the credit profiles of the companies stable.

According to the report, the projected outlay will be 1.8 times the capex during the past three fiscals, yet the credit risk profiles of manufacturers will remain stable. This is owing to their continued low capex intensity and solid balance sheets with financial leverage sustaining below 1x on the back of strong profitability. A healthy 10 per cent annualised increase in cement demand in the past three fiscals outpaced growth in capacity addition, pushing the utilisation level to a decadal high of 70 per cent in FY24. This has prompted the cement manufacturers ‘to press the capex pedal’. 

Over the credit profiles, the report said CRISIL Ratings-rated cement manufacturers will remain stable because capex intensity of the cement industry is still low and likely to remain range-bound at 0.7-0.9 time during fiscal 2025-2027, which is similar to that in the past three fiscals. It said the findings are based on an analysis of 20 cement makers, accounting for over 80 per cent of the industry's installed cement grinding capacity as of March 31, 2024.

The CNX Nifty is currently trading at 24852.90, up by 41.40 points or 0.17% after trading in a range of 24771.65 and 24858.40. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.18%, Tata Motors up by 1.96%, Hero MotoCorp up by 1.85%, Coal India up by 1.54% and BPCL up by 1.41%. On the flip side, LTIMindtree down by 1.15%, ONGC down by 0.91%, Divi's Lab down by 0.83%, Infosys down by 0.82% and Wipro down by 0.78% were the top losers.

Asian markets were trading mixed; Jakarta Composite gained 55.08 points or 0.73% to 7,543.76, Straits Times rose 7.81 points or 0.23% to 3,381.39, KOSPI increased 2.06 points or 0.08% to 2,709.73 and Nikkei 225 surged 165.59 points or 0.43% to 38,376.60. However, Hang Seng declined 56.9 points or 0.32% to 17,584.10 Shanghai Composite weakened 2.5 points or 0.09% to 2,846.27 and Taiwan Weighted lost 11.8 points or 0.05% to 22,137.03.