Key gauges extend gains for third consecutive session

Bulls have further tighten their holding on Dalal Steet as equity benchmarks extended the gains for third consecutive session on Tuesday amid buying in blue-chip stocks like Adani Ports & SEZ, NTPC and SBI and firm trends in global markets. After opening on a positive note, markets gradually advanced throughout the day, as traders took encouragement with Economic Affairs Secretary Ajay Seth’s statement that second quarter GDP growth at 5.4 per cent is lower than the potential but exuded confidence that the second half to be better. He added several high-frequency indicators in the month of October are pointing towards that. Some support also came as rating agency ICRA said it expects sequential revenue growth for India Inc in the December quarter, led by improved rural demand and uptick in government spending, additionally supported by the festival season. 

Markets added gains in second half of trading session and ended near day’s highs as sentiments remained optimistic as India scrapped the 30-month old windfall profit tax on domestically-produced crude oil and on export of jet fuel (ATF), diesel and petrol following a decline in international oil prices. Traders overlooked a private report that the recent decline in corporate earnings is likely to cast a shadow on the government’s direct-tax receipts and its fiscal position. Tax payment by listed companies was down 7 per cent year-on-year (Y-o-Y) in Q2FY25, their worst showing in the last four years and the first decline in corporate tax in seven quarters. Meanwhile, the RBI is expected to maintain the current benchmark interest rate due to high inflation exceeding the set limit. This decision will be announced on December 6, 2024. 

On the global front, European markets were trading higher with mining, energy and technology stocks rising after new U.S. curbs on tech exports to China fell short of earlier proposals. Investors also kept a close eye on the latest political developments in France as Prime Minister Michel Barnier braced for a no-confidence vote this week over a budget dispute. Asian markets settled higher on Tuesday as new U.S. curbs on semiconductor exports to China proved to be less harsh than previously expected. Sentiment was also boosted by expectations of a Federal Reserve rate cut later this month and speculation that a key economic meeting expected in December may unleash more Chinese stimulus. Back home, on the sectoral front, power stocks were in watch as the government data showed that India's power consumption rose 5.14 per cent to 125.44 billion units (BU) in November as compared to the year-ago month. In November 2023, power consumption was 119.30 GW. 

Finally, the BSE Sensex rose 597.67 points or 0.74% to 80,845.75, and the CNX Nifty was up by 181.10 points or 0.75% to 24,457.15.      

The BSE Sensex touched high and low of 80,949.10 and 80,244.78 respectively. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.92%, while Small cap index was up by 1.03%.

The top gaining sectoral indices on the BSE were PSU up by 1.51%, Utilities up by 1.41%, Industrials up by 1.36%, Capital Goods up by 1.23% and Power up by 1.20%, while FMCG down by 0.31% and Telecom down by 0.05% were the few losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 6.02%, NTPC up by 2.60%, SBI up by 2.12%, Larsen & Toubro up by 2.12% and Axis Bank up by 2.05%. On the flip side, Bharti Airtel down by 1.43%, ITC down by 1.02%, Sun Pharma down by 0.53%, Asian Paints down by 0.41% and Kotak Mahindra Bank down by 0.28% were the top losers.

Meanwhile, rating agency ICRA has said that it expects sequential revenue growth for India Inc in the December quarter, led by improved rural demand and uptick in government spending, additionally supported by the festival season. However, it said headwinds such as uneven urban demand and evolving global uncertainties could weigh on growth in the second half of the fiscal.

Further, it expects the operating profit margin (OPM) for India Inc to improve in the coming quarters. As a result, the credit metrics of India Inc in the October-December period of FY25 are estimated to improve with the interest coverage ratio in the range of 4.5-5 times, against 4.1 times in Q2 FY25.

Kinjal Shah, Senior Vice President and Co-Group Head -- Corporate Ratings, ICRA -- said while corporate India witnessed a muted sequential revenue growth in Q2 FY2025, led by the ongoing slowdown in urban demand, lower government spending amid monsoon-related disruptions, the same is expected to improve in the upcoming quarters. 

Shah added this would be supported by continued growth in consumption-oriented sectors like FMCG, retail as well as improved revenues in commodity-oriented sectors like iron and steel and cement, among others, led by uptick in government capex spending as well as increased rural demand.

The CNX Nifty traded in a range of 24,481.35 and 24,280.00. There were 41 stocks advancing against 9 stocks declining on the index. 

The top gainers on Nifty were Adani Ports & SEZ up by 5.86%, NTPC up by 2.65%, Adani Enterprises up by 2.20%, Axis bank up by 2.10% and SBI up by 2.04%. On the flip side, Bharti Airtel down by 1.50%, Hero MotoCorp down by 1.10%, ITC down by 0.97%, HDFC Life Insurance down by 0.81% and Sun Pharma down by 0.39% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 53.95 points or 0.64% to 8,366.84, France’s CAC rose 37.73 points or 0.52% to 7,274.62 and Germany’s DAX gained 39.73 points or 0.2% to 19,973.35. 

Asian markets settled higher on Tuesday after technology shares pulled Wall Street to another record finish ahead of a slew of US economic data due this week. Market sentiments were also supported by expectations of a Federal Reserve interest rate cut later this month. Seoul shares gained as new US curbs on semiconductor exports to China proved to be less harsh than previously expected, while Japanese shares rallied with optimism that Japan-made chip products will be exempted from new US curbs on exports to China.