Sensex, Nifty remain higher in early noon deals

Indian equity benchmarks remained higher during early afternoon deals, with both Sensex and Nifty holding notable gains, on the back of buying at Healthcare and Auto counters. Sentiments were optimistic, amid reports that foreign investors turned net buyers of Indian shares over the past couple of sessions. Foreign investors bought about $1 billion in domestic equities from March 28 to April 10. However, there was some anxiety among traders, amid a private report that the tax buoyancy in the goods and services tax (GST) regime has improved for the Union government but same has not improved for states yet.

On the global front, Asian markets were trading mixed, even after the value of overall bank lending in Japan was up 3.0 percent on year in March, coming in at 600.372 trillion yen. That beat forecasts for an increase of 1.8 percent and was down from 3.3 percent in February. Excluding trusts, lending climbed an annual 3.3 percent to 523.282 trillion yen - slowing from 3.6 percent in the previous month.

Back home, on the sectoral front, oil and gas sector stocks were in watch, after India Ratings and Research (Ind-Ra) maintained a neutral outlook for oil and gas sector for FY24, amid a stable demand for petroleum products, continued high crude and natural gas prices benefitting the upstream companies, an improvement in the credit profile of oil manufacturing companies (OMCs) on account of a reduction in the losses on the sale of primary fuels and high crack spreads, and a continued sound credit profile of city gas distribution (CGD) entities, backed by supportive regulatory policies.

The BSE Sensex is currently trading at 60279.45, up by 121.73 points or 0.20% after trading in a range of 60094.69 and 60313.24. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.37%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.26%, Auto up by 0.91%, IT up by 0.71%, TECK up by 0.50% and Metal up by 0.41%, while FMCG down by 0.49%, PSU down by 0.41%, Utilities down by 0.35%, Power down by 0.20% and Capital Goods down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.58%, HDFC Bank up by 1.10%, Tata Motors up by 1.09%, Tech Mahindra up by 1.03% and Infosys up by 0.80%. On the flip side, Power Grid Corporation of India down by 1.49%, Nestle down by 1.19%, NTPC down by 1.01%, Indusind Bank down by 0.93% and Hindustan Unilever down by 0.90% were the top losers.

Meanwhile,  India Ratings and Research (Ind-Ra) in its latest report has said that the rising interest rate burden, which is near the pre-pandemic levels and already up 30 per cent over FY22 levels, will force companies to reverse their deleveraging course this fiscal (FY24). The current fiscal is also likely to witness a 25 per cent increase in interest servicing cost.

According to the report, top 3,360 plus non-financial, debt-heavy corporates have a debt burden of about Rs 36 lakh crore as of H1 FY23 and their interest outflow will jump to Rs 3.38 lakh crore in FY24 from Rs 2.52 lakh crore in FY22. To tame the stubbornly high inflation, the Reserve Bank has hiked the key policy rates by 250 bps so far since May 2022 and at 6.50 per cent it is already 25 bps more than the pre-February 2020 levels.

The report further said the tailwinds of a lower interest burden owing to a low-interest rate regime and a debt reduction are likely to be reversed in FY24, even without a meaningful increase in leverage, which however, is unlikely to lead to any broad-based credit deterioration, given the headroom available in terms of significant deleveraging and margin growth with most large companies.

The cost of debt is likely to increase across all categories irrespective of the size of the corporate in FY24 compared to FY22. A sharp rise in interest rates and higher working capital financing are likely to increase interest outflow to Rs 3.38 lakh crore in FY24 from Rs 2.52 lakh crore in FY22, which is based on the interest costs on a net basis of around 3,365 non-financial, debt-heavy corporates with a total debt of about Rs 36 lakh crore as of H1 FY23. 
The CNX Nifty is currently trading at 17770.00, up by 47.70 points or 0.27% after trading in a range of 17717.25 and 17780.00. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Divi's Laboratories up by 7.58%, Bajaj Auto up by 2.12%, Adani Enterprises up by 2.10%, Asian Paints up by 1.55% and Dr Reddy's Laboratories up by 1.39%. On the flip side, Power Grid Corporation of India down by 1.53%, Nestle down by 1.14%, ONGC down by 1.10%, NTPC down by 1.04% and Indusind Bank down by 0.97% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 159.33 points or 0.57% to 28,082.70, Taiwan Weighted added 19.09 points or 0.12% to 15,932.97, Shanghai Composite strengthened 11.94 points or 0.36% to 3,325.51 and KOSPI increased 2.78 points or 0.11% to 2,550.64, while Straits Times fell 14.06 points or 0.43% to 3,283.77, Jakarta Composite plunged 25.11 points or 0.37% to 6,786.20 and Hang Seng declined 178.47 points or 0.88% to 20,306.77.