Bears tighten grip over Dalal Street

Bears have tighten their grip over the Dalal Street in early noon deals with both Sensex and Nifty trading near their intraday low points, impacted by heavy selling at Metal and Realty counters along with negative cues from other Asian markets. Traders got cautious amid reports that Sebi has become stricter in its approach while giving its go-ahead to IPOs after investors lost their money in some of the high-profile initial shares in 2021. The street overlooked a report stating that foreign investors have put in Rs 11,500 crore in the Indian equities so far this month, mainly driven by bulk investment from the US-based GQG Partners in the Adani Group companies.

On the global front, Asian markets were trading lower, after China retained its benchmark lending rates for the seventh straight month after a surprise reserve requirement ratio reduction last week. The People's Bank of China left its one-year loan prime rate, or LPR, unchanged at 3.65 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was maintained at 4.30 percent.

The BSE Sensex is currently trading at 57238.95, down by 750.95 points or 1.29% after trading in a range of 57197.32 and 57829.23. All 30 stocks were declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.52%, while Small cap index was down by 1.09%.

There were no gaining sectoral indices on the BSE, while Metal down by 2.61%, Realty down by 1.91%, IT down by 1.71%, TECK down by 1.65% and PSU down by 1.51% were the top losing indices on BSE.

The top losers on the Sensex were Bajaj Finserv down by 4.34%, Bajaj Finance down by 2.93%, Tech Mahindra down by 2.46%, Tata Steel down by 2.38% and Tata Motors down by 2.35%, while there were no gainers.

Meanwhile, credit rating agency Crisil in its latest report has said that cement companies are expected to go on an expansion spree, and add 145-155 MT capacity between FY 2023 and 2027. That translates to a 4-5 per cent compound annual growth rate on a high base. A robust 6-7 per cent CAGR expected in demand over these five fiscals will encourage the growth in supply. The expected 145-155 MT of fresh capacity addition will entail a likely capex of Rs 1.2 lakh crore, with large producers accounting for more than half of the spending.

According to the report, with 570 MT of installed capacity, India is the world's second-largest cement producer after China. Between FY12 and FY23, the installed capacity grew by a whopping 61 per cent to 570 MT from 353 MT in FY12 -- a net addition of 217 MT from 2013 to 2022 -- and FY22 saw the highest capacity addition of 34 MT. It further said cement makers have been adding substantial capacity in the past too. In the five fiscals through 2017, around 108 MT were added, while in the next five fiscals through 2022, 109 MT were added despite pandemic-induced disruptions. On the balance-sheet side, healthy post-pandemic demand recovery and strong profitability helped producers deleverage. Capex plans, which were on hold or delayed due to the pandemic, restarted in the latter half of fiscal 2021. 

However, the agency expects the capacity addition drive to peter off fiscal 2023 and moderate to 30-32 MT, inclusive of grinding and integrated units, as higher input cost has hit their profitability, leading to slowing capex. And fiscal 2024 also looks tepid with an addition of only 30-32 MT. That is because policies may change because of general elections. But once the hustings are over, the agency expects capacity addition to gather pace, supported by the rising demand amid a growing population and the government's infrastructure thrust.

The CNX Nifty is currently trading at 16866.60, down by 233.45 points or 1.37% after trading in a range of 16858.95 and 17066.60. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.59%, Divi's Laboratories up by 1.16%, Dr Reddy's Laboratories up by 0.13% and Bajaj Auto up by 0.05%. On the flip side, Bajaj Finserv down by 4.50%, Adani Enterprises down by 4.36%, Hindalco down by 3.47%, Bajaj Finance down by 3.01% and Tata Motors down by 2.45% were the top losers.

All Asian markets were trading lower; Hang Seng declined 680.59 points or 3.49% to 18,838.00, Nikkei 225 slipped 388.12 points or 1.44% to 26,945.67, Jakarta Composite plunged 59.14 points or 0.89% to 6,619.10, Straits Times fell 52.08 points or 1.64% to 3,131.20, Taiwan Weighted lost 32.99 points or 0.21% to 15,419.97, Shanghai Composite weakened 16.84 points or 0.52% to 3,233.71 and KOSPI dropped 16.49 points or 0.69% to 2,379.20.