Benchmarks remain in red in late morning deals

Indian equity markets remained in red and were trading with cut of around quarter percent in late morning deals as market participants were cautious ahead of the release of the Economic Survey 2022-23 later in the day and the presentation of Union Budget in Parliament on Wednesday. Weak cues from global markets dampened the domestic sentiments. Sentiments were weak as the International Monetary Fund (IMF) said it is expecting some slowdown in the Indian economy next fiscal year and projected the growth to 6.1 percent from 6.8 percent during the current fiscal ending March 31. The market sentiments were further being weighed down by the weakness in rupee, which fell by 20 paise to 81.72 against the US dollar due to fresh demand for the US currency from banks and importers.  On the sectoral front, PSU, Telecom, Metal, Industrials and Auto witnessed the maximum gains in trade, while IT, TECK, Energy, FMCG and Oil & Gas remained the top losers on the BSE sectoral space.

On the global front, Asian markets were trading in red, following the broadly negative cues from US markets, as traders continued to refrain from creating fresh long positions and were cautious ahead of the interest rate decisions from the US Fed, Bank of England and European Central Bank later in the week. Back home, in the stock specific development, Tech Mahindra dipped due to the management's weak commentary post the Q3FY23 results. The management said, given the tough macro-economic environment, the company is witnessing moderation in growth, slower decision making for projects, cuts in discretionary spending and shrinking budgets for short-term tactical deals.

The BSE Sensex is currently trading at 59344.98, down by 155.43 points or 0.26% after trading in a range of 59104.59 and 59787.63. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.11%, while Small cap index up by 1.50%.

The top gaining sectoral indices on the BSE were PSU up by 2.31%, Telecom up by 2.26%, Metal up by 1.42%, Industrials up by 1.35% and Auto up by 1.20%, while IT down by 1.07%, TECK down by 0.90%, Energy down by 0.56%, FMCG down by 0.42% and Oil & Gas down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.72%, Power Grid Corp up by 2.41%, Ultratech Cement up by 1.72%, Mahindra & Mahindra up by 1.70% and NTPC up by 1.48%. On the flip side, Tech Mahindra down by 3.06%, Bajaj Finance down by 2.07%, Infosys down by 1.39%, TCS down by 1.37% and HCL down by 1.35% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that India currently has around 35 per cent of its towers fiberised for 5G and the backhaul infrastructure will cost a whopping Rs 3 lakh crore over the next 4-5 years. It said the full-scale 5G deployment across the country will entail densification of the network and, thereby, sizable investments in fiberisation. However, it said the debt levels for the industry continue to remain high and the same further increased post the conclusion of the last round of auctions.

According to the report, the industry is expected to close the year with a debt of around Rs 6.3 lakh crore (as on March 31, 2023). It said while the rollouts have started and customers are being upgraded to the 5G network, the same is being done at no additional costs as 5G-specific plans have not been launched yet. Moreover, it said 5G deployment will entail densification of network and close placement of radio antennas, with possible collocation on street furniture. While small cells are likely to be the first option to start with, these need to be connected with fibre for efficient network coverage and delivery.

The report further stated that as several use cases are under development, it will take some time for 5G to reach an adequate level of penetration. To begin with, it will be more focused towards enterprise-based use cases. Thus, unlike 4G, it expects the 5G rollout to be more phased out and pockets specific. The telecom industry has continued to report healthy improvement in its operating metrics as reflected by improvement in ARPU (average revenue per user) levels and consistent growth in telephony usage. ARPU has already crossed Rs 170 mark in H1 and is likely to touch Rs 180 by the end of the fiscal, followed by improvement to close to Rs 200 by FY2024. This has translated into healthy growth in industry AGR over the last few quarters.

The CNX Nifty is currently trading at 17613.65, down by 35.30 points or 0.20% after trading in a range of 17537.55 and 17735.70. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 3.08%, BPCL up by 2.72%, SBI up by 2.71%, JSW Steel up by 2.50% and Power Grid up by 2.41%. On the flip side, Tech Mahindra down by 2.91%, Britannia down by 2.76%, Bajaj Finance down by 1.93%, HDFC Life Insurance down by 1.59% and Infosys down by 1.35% were the top losers.

Asian markets were trading lower; Taiwan Weighted lost 207.24 points or 1.34% to 15,286.58, Hang Seng declined 311.86 points or 1.41% to 21,757.87, Shanghai Composite weakened 11.56 points or 0.35% to 3,257.76, KOSPI dropped 23.76 points or 0.97% to 2,426.71, Jakarta Composite plunged 31.07 points or 0.45% to 6,841.41, Straits Times fell 10.38 points or 0.31% to 3,367.91 and Nikkei 225 slipped 111.69 points or 0.41% to 27,321.71.