Domestic indices trade deeply in red in late morning deals

Domestic equity indices traded deeply in red with cut of around one percent in late morning deals as market participants indulged in reducing their positions. Hectic selling in Infosys, Mahindra & Mahindra, Tech Mahindra, HCL and Titan companies’ stocks dragged the markets to trade below their psychological 79,500 and 24,050 levels. Weak cues from the global markets weighed on the domestic sentiments. Depreciation in Indian rupee against dollar also weighed down sentiments. Rupee weakened by around 9 paise to 84.49 against the dollar at the Inter-bank Foreign Exchange market on account of increased demand for the American currency from importers and banks. On the BSE sectoral front, traders were seen pilling up position in Utilities, Oil & Gas, Realty, Power and Energy, while selling was witnessed in IT, TECK, Auto, Telecom and Consumer Durables. 

On the global front, Asian markets were trading mostly in red following weak cues from the US markets overnight. Back home, in the stock specific development, BEML surged after the company has bagged an order worth Rs 3,658 crore, from Chennai Metro Rail. 

The BSE Sensex is currently trading at 79462.63, down by 771.45 points or 0.96% after trading in a range of 79420.47 and 80447.40. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.08%, while Small cap index up by 0.36%.

The top gaining sectoral indices on the BSE were Utilities up by 0.90%, Oil & Gas up by 0.53%, Realty up by 0.47%, Power up by 0.37% and Energy up by 0.27%, while IT down by 1.96%, TECK down by 1.82%, Auto down by 0.92%, Telecom down by 0.73% and Consumer Durables down by 0.72% were the top losing indices on BSE.

The only gainer on the Sensex was SBI up by 0.26%. On the flip side, Infosys down by 2.83%, Mahindra & Mahindra down by 2.68%, Tech Mahindra down by 2.52%, HCL down by 2.01% and Titan down by 1.46% were the top losers.

Meanwhile, Rating agency ICRA in its latest report has revised down its volume growth forecast for the cement industry to 4-5 per cent at 445-450 million tonne for the current fiscal (FY25) on account of slower-than-expected ramp-up in construction activity across the housing and infrastructure sectors, post the General Elections. In July this year, it had forecast a year-on-year volume growth of 7-8 per cent, expecting a better pick-up in demand in the second half. Besides, on a YoY basis, the operating profit margins declined by 375 basis points to 12 per cent in Q2 FY25 and by 192 bps to 14 per cent in H1 FY25 as prices remained under pressure due to muted demand and oversupply.

According to the report, in the first half of FY25 all-India cement volumes witnessed a muted rise of 2 per cent YoY to 212 million tonne on account of the slowdown in construction activity in Q1 during the elections, followed by the ample monsoon rainfall in Q2. The likely improvement in farm cash flows, backed by healthy monsoons, an upbeat kharif output and elevated replenishment levels of reservoirs supporting the rabi crop sowings, are expected to boost the rural consumption in H2, which should aid the cement demand for the rural housing segment. Moreover, sustained healthy demand for urban housing should support the pick-up in cement volumes from the housing segment. The infrastructure segment is also likely to witness greater traction in H2, supported by an increase in government spending on infrastructure projects.

The report said the government gross capex spend in H1 FY25 remained subdued at Rs 4 lakh crore, against the revised Budget Estimate of Rs 11.1 lakh crore for the full year FY25. The substantial headroom for the government’s capital spending in H2 FY25 to meet the FY25 revised BE, is likely to provide a fillip to construction activity and aid in supporting the allied input sectors like cement. Besides volume, the cement industry is also facing a decline in actual realisation due to lower prices prevalent into the sector. The cement prices remained under pressure, declining by 10 per cent YoY to Rs 330 per bag in H1 FY25 due to muted demand and oversupply in the market. While the lower sales realisations were partially offset by moderation in costs of coal and pet coke, which eased by 38 per cent and 13 per cent YoY in H1 FY25, respectively.

The CNX Nifty is currently trading at 24045.20, down by 229.70 points or 0.95% after trading in a range of 24037.10 and 24345.75. There were 4 stocks advancing against 46 stocks declining on the index.

The few gainers on Nifty were Adani Enterprises up by 2.51%, SBI Life up by 0.54%, Coal India up by 0.28% and SBI up by 0.26%. On the flip side, Infosys down by 2.95%, Mahindra & Mahindra down by 2.75%, Tech Mahindra down by 2.69%, HCL down by 2.12% and Eicher Motors down by 1.80% were the top losers.

Asian markets were trading  mostly in red; Hang Seng declined 217.33 points or 1.11% to 19,385.80, Jakarta Composite plunged 35.43 points or 0.49% to 7,210.46, Shanghai Composite weakened 3.93 points or 0.12% to 3,305.85 and Taiwan Weighted lost 65.23 points or 0.29% to 22,269.55. However, Straits Times rose 7.05 points or 0.19% to 3,715.14, KOSPI increased 2.99 points or 0.12% to 2,506.05 and Nikkei 225 surged 300.2 points or 0.79% to 38,435.17.