Domestic indices trade near neutral lines with negative bias

Domestic equity indices traded near neutral lines with negative bias in late afternoon session as Investors await more of financial results from India Inc, with HCL Tech due to post its earnings later in the day. Muted cues from global markets also weighed on the domestic sentiments. Sentiments were cautious as investors reacted to hawkish comments from Fed officials and fretted over recession risks. There were some buzz in pharmaceutical stocks as credit rating agency, India Ratings and Research (Ind-Ra) has said that the Indian pharmaceuticals market (IPM) is likely to grow 10%-11% year on year (yoy) in FY24 (FY22: 14.5% yoy; FY23: 9.3% yoy). It maintained a neutral outlook for the Indian pharmaceutical sector for FY24. 

On the global front, Asian markets were trading mostly in red as expectations of more interest-rate hikes lifted the U.S. dollar and pushed up yields across the board. European markets were trading in red as investors await more U.S. earnings and economic data for directional cues. Back home, in the stock specific development, Mastek surged after the company reported strong revenue growth in January-March quarter (Q4FY23).

The BSE Sensex is currently trading at 59564.70, down by 3.10 points or 0.01% after trading in a range of 59489.98 and 59836.79. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.01%, while Small cap index up by 0.16%.

The top gaining sectoral indices on the BSE were Utilities up by 0.79%, Telecom up by 0.74%, Power up by 0.69%, Capital Goods up by 0.49% and Industrials up by 0.48%, while Healthcare down by 0.77%, Realty down by 0.47%, FMCG down by 0.38%, Metal down by 0.35% and Energy down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.56%, Bharti Airtel up by 1.01%, Tata Motors up by 0.99%, Asian Paints up by 0.78% and Tech Mahindra up by 0.72%. On the flip side, Hindustan Unilever down by 1.58%, Ultratech Cement down by 0.83%, Axis Bank down by 0.82%, Bajaj Finance down by 0.76% and Sun Pharma down by 0.63% were the top losers.

Meanwhile, maintaining a neutral outlook for the Indian pharmaceutical sector for FY24, credit rating agency, India Ratings and Research (Ind-Ra) has said that the Indian pharmaceuticals market (IPM) is likely to grow 10%-11% year on year (yoy) in FY24 (FY22: 14.5% yoy; FY23: 9.3% yoy).

The agency also expects a muted performance in the US generic market due to a high single-digit price deflation (9MFY23 and FY22: high single digit to low double digit). As per the agency, the Indian active pharmaceuticals ingredient (API) suppliers witnessed weak growth of negative 8.1% yoy in FY22 (FY21: 19.2% yoy), due to inventory destocking and high base last year, while a recovery was seen in 9MFY23 (up 5.6% yoy).

Ind-Ra further noted that the API business of selected companies is expected to report high single-digit growth in FY24 due to a demand uptick; the overall revenue growth for them is also expected at 9%-10% yoy, given their optimised operating costs, a moderation in the US price erosion, a softening of raw material and other cost (logistic/freight). This will lead to a healthy EBITDA margin performance (around 21%) in FY24 (FY22: 20.1; FY21: 23.0%; 9MFY23: 20.3%).

The CNX Nifty is currently trading at 17607.75, down by 11.00 points or 0.06% after trading in a range of 17584.35 and 17684.45. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.56%, Bajaj Auto up by 1.04%, Bharti Airtel up by 0.96%, Tata Motors up by 0.89% and Adani Ports up by 0.89%. On the flip side, Divi's Lab down by 3.70%, Hindustan Unilever down by 1.74%, Eicher Motors down by 1.67%, Dr. Reddy's Lab down by 1.36% and Cipla down by 0.99% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted lost 62.95 points or 0.4% to 15,707.52, Shanghai Composite weakened 3.1 points or 0.09% to 3,367.03, KOSPI dropped 11.97 points or 0.47% to 2,563.11 and Straits Times fell 16.42 points or 0.49% to 3,307.63. However, Nikkei 225 surged 50.81 points or 0.18% to 28,657.57 and Hang Seng advanced 29.21 points or 0.14% to 20,396.97.

European markets were trading in red; UK’s FTSE 100 fell 14.41 points or 0.18% to 7,884.51, Germany’s DAX dropped 138.78 points or 0.85% to 15,759.30 and France’s CAC was down by 32.16 points or 0.45% to 7,515.59.