Domestic indices maintain solid gains in late morning deals

Domestic equity indices maintained their solid gains in late morning deals on the back of fresh buying by funds and retail investors. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Positive cues from global markets supported domestic sentiments. A lack of major negative developments regarding the banking industry in recent days has led to confidence that the situation has stabilized. The sentiments were further supported by Indian rupee appreciating 11 paise to 82.23 against the dollar at the Inter bank Foreign Exchange on increased selling of the US currency by exporters and banks. Besides, sentiments also got boost as private brokerage upgraded India to equal weight from under weight, citing economic resilience and valuation premiums.

On the global front, Asian markets were trading mostly higher, following the broadly positive cues from global markets overnight, as easing concerns over turmoil in the banking sector helped reduce fears about risks to economic growth. Back home, in the stock specific development, Reliance Industries jumped as the company reportedly called a shareholder meeting on May 2 to approve the demerger of its financial services business.

The BSE Sensex is currently trading at 58579.87, up by 619.78 points or 1.07% after trading in a range of 58273.86 and 58709.17. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.03%, while Small cap index up by 1.46%.

The top gaining sectoral indices on the BSE were Telecom up by 1.53%, Utilities up by 1.49%, IT up by 1.47%, Energy up by 1.46% and PSU up by 1.33%, while there were no losing indices on the BSE.

The top gainers on the Sensex were Reliance Industries up by 3.32%, ICICI Bank up by 2.80%, Nestle up by 2.73%, Tech Mahindra up by 1.73% and NTPC up by 1.69%. On the flip side, Sun Pharma down by 0.55%, Bajaj Finance down by 0.42%, Asian Paints down by 0.37%, Hindustan Unilever down by 0.37% and ITC down by 0.37% were the top losers.

Meanwhile, credit rating agency Crisil in its latest report has said that the domestic stainless steel demand is expected to grow at a compound annual growth rate (CAGR) of 9 per cent till 2024-25 financial year. The domestic demand for stainless steel was at 4 million tonnes (MT) in fiscal 2021-2022. It noted that the demand will be driven by increasing adoption of stainless steel in railways which is a focus area for government infrastructure spending, and rising application in the automobile and construction sectors. The demand growth, in turn, will spur capacity additions.

However, the report said the credit profiles of players are expected to remain comfortable, given stable profit levels and healthier balance sheets. Adoption of stainless steel is increasing because of its higher durability and lower maintenance. Demand from railways is expected to more than triple by fiscal 2025 and constitute 20 per cent of incremental demand for the metal over fiscal 2023-2025. To be sure, the recent Union Budget has doubled the amount earmarked for manufacturing railway coaches to Rs 47,500 crore for fiscal 2024. 

According to the report, demand from other major sectors with application of stainless steel, including consumer goods (45 per cent of demand) and process industry (25 per cent), is also expected to grow at a healthy clip of 7-9 per cent over the next 3-5 fiscals given higher consumer spends and recovery in consumption. Strong demand prospects, coupled with the absence of any major supply addition in the last three fiscals, have set the stage for capital expenditure (capex). Domestic manufacturers are undertaking capex to add 1 MT of steel melting capacity by fiscal 2024. The industry added 1.3 MT between fiscal 2009 and 2012, post which utilisation and profitability issues led to a phase of stress build-up. 

The CNX Nifty is currently trading at 17259.00, up by 178.30 points or 1.04% after trading in a range of 17204.65 and 17289.75. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.39%, Nestle up by 2.88%, ICICI Bank up by 2.82%, HCL up by 1.82% and Tech Mahindra up by 1.74%. On the flip side, Apollo Hospital down by 0.77%, Sun Pharma down by 0.71%, Hindustan Unilever down by 0.46%, ITC down by 0.42% and Eicher Motors down by 0.40% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted added 18.63 points or 0.12% to 15,868.06, Hang Seng advanced 147.05 points or 0.72% to 20,456.18, Shanghai Composite strengthened 9.92 points or 0.3% to 3,271.17, KOSPI increased 22.5 points or 0.91% to 2,475.66, Straits Times rose 7.68 points or 0.24% to 3,264.86 and Nikkei 225 surged 257.84 points or 0.92% to 28,040.77. However, Jakarta Composite plunged 1.09 points or 0.02% to 6,807.86.