Benchmarks trade marginally higher in morning deals

Indian equity benchmarks were trading marginally higher in morning deals, led by gains in Energy, Capital Goods and Oil & Gas stocks. Traders took support with a private report stated that India has emerged as a key source country for Foreign Direct Investment (FDI) in Dubai, one of the wealthiest of the seven emirates in the United Arab Emirates. It ranked among the top five source countries for announced FDI projects and estimated FDI capital. Some support also came with a private report stating that the RBI may cut key benchmark policy rate in the fourth quarter of the current calendar year as a mix of factors will allow the central bank to shift focus and adopt a more accommodative policy stance sooner. However, gains remain capped as some concern came with the Department for Promotion of Industry and Internal Trade (DPIIT) data showed that foreign direct investment (FDI) into India declined by 22 per cent to $46 billion in 2022-23, dragged by lower inflows in computer hardware and software, and automobile industry. The FDI inflows stood at $58.77 billion during 2021-22. On the global front, Asian markets are trading mostly in green as investors cheered the prospect that the world's largest economy will avert a major debt default, improving sentiment across most asset classes.

The BSE Sensex is currently trading at 62917.04, up by 70.66 points or 0.11% after trading in a range of 62737.40 and 63030.63. 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 0.28%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Energy up by 0.41%, Capital Goods up by 0.34%, Oil & Gas up by 0.33%, Auto up by 0.29% and Consumer Durables up by 0.29%, while Metal down by 0.23% and Telecom down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.29%, HCL Technologies up by 0.92%, NTPC up by 0.80%, Kotak Mahindra Bank up by 0.77% and Titan Co up by 0.67%. On the flip side, Sun Pharma down by 0.75%, Nestle down by 0.61%, ITC down by 0.49%, HDFC down by 0.40% and TCS down by 0.31% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that it expects the net debt-to-EBITDA ratio of domestic steel manufacturers to stay below the level of 2 times in the financial year 2023-24 (FY24). It stated the steel makers had reported the ratio of net debt to EBITDA in the range of 1.6-1.7 times in preceding financial year 2022-23.

It mentioned that with the leverage much lower than the average of 3.5 times, seen during past five fiscals, the median credit quality of the sector is unlikely to be affected as balance sheets of the players will remain healthy. Further, it added project risks are expected to be low due to the brownfield nature of bulk of the capacity addition.

Besides, it said healthy demand growth, coupled with high operating rates, is driving the need to add capacity by the players. After a strong recovery seen in fiscal 2022 and 2023, with growth of 11.5 per cent and 13.3 per cent, respectively, domestic steel demand is expected to continue to grow at a healthy clip of over 7-9 per cent this fiscal. This will be driven by government push to the infrastructure and construction sectors, which have 70 per cent share in steel consumption. 

Moreover, it said global demand is also expected to recover, though marginally (1-2 per cent), from the lows of last fiscal, which was acutely impacted by war. This should support a recovery in exports, which is expected to add 1-2 per cent in incremental volume growth for players.

The CNX Nifty is currently trading at 18633.15, up by 34.50 points or 0.19% after trading in a range of 18575.50 and 18662.45. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.10%, JSW Steel up by 1.62%, ONGC up by 1.54%, Ultratech Cement up by 1.13% and HCL Technologies up by 0.96%. On the flip side, HDFC Life Insurance down by 0.89%, Adani Ports &SEZ down by 0.88%, Sun Pharma down by 0.67%, SBI Life Insurance down by 0.66% and Nestle down by 0.65% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted added 9.36 points or 0.06% to 16,645.66, KOSPI increased 25.59 points or 1% to 2,584.40, Jakarta Composite gained 0.21 points or 0% to 6,681.31, Straits Times rose 2.73 points or 0.09% to 3,197.95 and Nikkei 225 surged 87.31 points or 0.28% to 31,320.85.

On the flip side, Hang Seng declined 135.49 points or 0.73% to 18,415.62 and Shanghai Composite weakened 28.51 points or 0.89% to 3,192.94.