Weak trade persists over Dalal Street

Weak trade persisted over the Dalal Street in early afternoon deals, amid negative cues from other Asian markets along with heavy selling at Realty and Metal stocks. Some anxiety came after reports that GST evasion detection by tax officers almost doubled year-on-year to over Rs 1.01 lakh crore in the just concluded 2022-23 fiscal. The street overlooked the Retirement fund body, Employees' Provident Fund Organisation’s (EPFO) latest data report showing that India created 1396185 new jobs in the month of February 2023 as against revised figure of 1299220 in January 2023.

On the global front, Asian markets were trading mostly in red, as overall consumer prices in Japan were up 3.2 percent on year in March. That was in line with expectations and down from 3.2 percent in February. On a seasonally adjusted monthly basis, inflation rose 0.4 percent - exceeding expectations for a gain of 0.1 percent following the 0.6 percent decline in the previous month.

The BSE Sensex is currently trading at 59557.55, down by 74.80 points or 0.13% after trading in a range of 59533.79 and 59781.36. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.49%, while Small cap index was down by 0.36%.

The top gaining sectoral indices on the BSE were FMCG up by 0.53%, Telecom up by 0.41%, Healthcare up by 0.16%, IT up by 0.13% and TECK up by 0.08%, while Realty down by 2.04%, Metal down by 1.58%, Capital Goods down by 0.89%, Auto down by 0.86% and Industrials down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.44%, Asian Paints up by 0.99%, Wipro up by 0.92%, Kotak Mahindra Bank up by 0.68% and TCS up by 0.61%. On the flip side, Tech Mahindra down by 2.25%, Tata Steel down by 2.13%, Tata Motors down by 1.81%, Ultratech Cement down by 1.57% and Larsen & Toubro down by 1.21% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that India's quick service restaurant industry is likely to witness 20-25 per cent growth in the current financial year (FY24) on account of the demand uptick and increasing penetration driven by a rapid expansion of stores. It noted that over the long-term, revenue growth shall be supported by factors like rising QSR penetration levels, a shift from the unorganised to the organised segment with a preference for branded quick service restaurant (QSR) players, given the hygiene and convenience factors (delivery over dine-in), etc.

However, the report stated that downside risks to the estimates remain from the emergence of any further Covid waves or any material weakening in purchasing power due to a high inflationary interest-rate regime. ICRA estimates that the top five players in the domestic quick-service restaurant industry are likely to add approximately 2,300 stores between FY2023-FY2025 with an estimated capex at around Rs 5,800 crore (excluding refurbishment) for this period, twice that of the levels seen during the pre-Covid era.

According to the report, majority of capex is expected to be funded through internal accruals and cash on the books, having raised money through the pre-IPO /IPO route in the last two fiscals to support the planned capex in the near- to medium-term. India's dependence on imports for edible oils further exposes the players' margins to geo-political risks and forex fluctuations.

The CNX Nifty is currently trading at 17593.20, down by 31.25 points or 0.18% after trading in a range of 17588.30 and 17663.20. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.49%, Cipla up by 1.32%, BPCL up by 1.31%, Asian Paints up by 1.03% and Wipro up by 0.95%. On the flip side, Hindalco down by 2.35%, Tech Mahindra down by 2.32%, Tata Steel down by 2.18%, Tata Motors down by 1.85% and Grasim Industries down by 1.73% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 268.19 points or 1.31% to 20,128.78, Taiwan Weighted lost 104.53 points or 0.67% to 15,602.99, Nikkei 225 slipped 93.2 points or 0.33% to 28,564.37, Shanghai Composite weakened 58.91 points or 1.75% to 3,308.12, KOSPI dropped 18.71 points or 0.74% to 2,544.40 and Straits Times fell 7.26 points or 0.22% to 3,306.15.