Sensex, Nifty trim gains in early noon deals

Indian equity benchmarks trimmed some of their gains in early afternoon session, however managed to trade in green. Gains got trimmed, amid a privet report showing that the value of foreign portfolio investment (FPI) in Indian equities was at $542 billion in the March quarter of 2023, a decline of 11 per cent from the preceding year, largely due to the exodus of foreign money from the domestic market. Further, the Department for Promotion of Industry and Internal Trade (DPIIT) has taken up the taxation issue of startups with the finance ministry. Post the amendments proposed in the Finance Bill, concerns have been raised over the methodology of calculation of fair market value under the two different laws.

On the global front, Asian markets were trading in green, after Singapore posted a merchandise trade surplus of SGD4.713 billion in April. That was shy of expectations for a surplus of SGD6.346 billion following the SGD6.207 billion surplus in March. Non-oil domestic exports were up 2.7 percent on month, beating forecasts for a decline of 3.0 percent following the 18.4 percent surge in the previous month.

Back home, hardware companies’ stocks were in focus, as the Union Cabinet approved the Production Linked Incentive (PLI) Scheme 2.0 for IT Hardware with a budgetary outlay Rs 17,000 crore. PLI Scheme 2.0 for IT hardware covers laptops, tablets, all-in-one PCs, servers and ultra small form factor devices.

The BSE Sensex is currently trading at 61788.32, up by 227.68 points or 0.37% after trading in a range of 61687.10 and 61955.90. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.10%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Bankex up by 0.78%, TECK up by 0.41%, IT up by 0.33%, FMCG up by 0.05% and PSU up by 0.01%, while Realty down by 1.78%, Power down by 0.54%, Oil & Gas down by 0.48%, Utilities down by 0.37% and Consumer Durables down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.56%, ICICI Bank up by 1.26%, Bharti Airtel up by 1.00%, Axis Bank up by 0.97% and Infosys up by 0.87%. On the flip side, Power Grid Corporation of India down by 0.86%, Titan Company down by 0.85%, Hindustan Unilever down by 0.84%, Larsen & Toubro down by 0.80% and Sun Pharma down by 0.67% were the top losers.

Meanwhile, following an estimated expansion of 27-30% in FY23, Credit Rating Agency ICRA in its latest report has said that the revenues of the domestic automobile dealership industry is likely to grow by 11-13% in FY24, aided by 6-9% volume growth and an increase in vehicle prices. It said factors like improving consumer sentiments, as seen through a continued preference for personal mobility and rising disposable income, easing supply-side constraints, better features in the new product models, change in product-mix with increasing skew towards high-priced vehicles, etc., are expected to favourably support the sales growth in the consumer segment. 

According to the report, in the commercial segment, improving economic activities, rising spends in infrastructure and mining activities stable financing environment shall support the growth. Potential headwinds could arise from adverse monsoons or the occurrence of the El Nino and its impact on rural demand, supply-related issues, general inflation, and further hardening in financing rates.

Segment-wise, report said demand for commercial vehicles (CV) is expected to be supported by replacement demand, pick-up in mining, infrastructure construction activities, and overall healthy fleet utilisation levels. In the passenger vehicle (PV) segment, underlying demand trends remain stable, although supply-chain related factors, increase in the cost of ownership, and monsoon performance are key monitorables. With the PV segment, demand remains buoyant in the segments like special-utility vehicles and luxury cars. In the two-wheeler (2W) segment, headwinds like elevated ownership costs, inflation, and high financing costs remain a challenge, although demand is expected to recover gradually.

The CNX Nifty is currently trading at 18229.50, up by 47.75 points or 0.26% after trading in a range of 18213.85 and 18297.20. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 1.62%, ICICI Bank up by 1.21%, HDFC Life Insurance up by 1.01%, Hero MotoCorp up by 0.99% and Bharti Airtel up by 0.98%. On the flip side, Divi's Laboratories down by 3.01%, Adani Ports and Special Economic Zone down by 1.42%, Dr. Reddy's Lab down by 1.37%, Power Grid Corporation of India down by 1.01% and Eicher Motors down by 0.99% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 480.34 points or 1.57% to 30,573.93, Taiwan Weighted added 176.59 points or 1.1% to 16,101.88, Hang Seng advanced 107.09 points or 0.55% to 19,667.66, KOSPI increased 20.74 points or 0.82% to 2,515.40, Shanghai Composite strengthened 11.78 points or 0.36% to 3,296.01 and Straits Times rose 11.31 points or 0.36% to 3,185.15.