Bulls hold grip over Dalal Street

Bulls were holding a tight grip over the Dalal Street in early noon deals, with bothe Sensex and Nifty holding a notable gains of 0.75% each, aided by heavy buying at Consumer Durables and Metal counters, despite mixed cues from other Asian markets. Sentiments remained positive, as Services Export Promotion Council (SEPC) Chairman Sunil H Talati has said that the US announcement to introduce in-country renewable of H-1B visas will help swift movement of Indian IT professionals and promote services exports.   

Stocks related to realty sectors were in focus, amid a private report stating that housing sales rose 8 per cent annually during the April-June period to 80,250 units across eight major cities, mainly on increased demand in Mumbai and Pune. Sales stood at 74,320 units in the year-ago period across primary (fresh sales) residential markets of the top eight cities.

On the global front, Asian markets were trading mixed, after South Korea's consumer sentiment improved in June to the highest level in thirteen months, as households' current and future living conditions improved amid an ease in inflation. The survey results from the Bank of Korea showed that the consumer confidence index rose to 100.7 in June from 98.0 in May. In April, the reading was 95.1. This was the highest reading since May 2022. The consumer confidence survey was conducted between June 13 and 20, among 2,500 households.

The BSE Sensex is currently trading at 63891.96, up by 475.93 points or 0.75% after trading in a range of 63554.82 and 63948.84. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.37%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.92%, Metal up by 0.82%, TECK up by 0.72%, IT up by 0.70% and Telecom up by 0.69%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tata Motors up by 2.19%, Titan Co up by 1.64%, Indusind Bank up by 1.45%, NTPC up by 1.21% and Reliance Industries up by 1.21%. On the flip side, Kotak Mahindra Bank down by 0.39%, Wipro down by 0.13% and HCL Tech. down by 0.04% were the top losers.

Meanwhile, Credit Rating Agency ICRA in its latest report has said that the earnings of domestic non-ferrous metal industry players is expected to remain weak in the ongoing fiscal (FY24), after a lacklustre performance in the last fiscal. Significant metal price corrections remain the key headwind affecting the margins, with no immediate relief in sight. The moderation in earnings, combined with the committed expansion plans of the players, is expected to increase the industry’s leverage in FY24. However, the debt protection metrics remain adequate in the base case scenario and, therefore, ICRA maintains a Stable outlook on the sector.

According to the report, international prices of the three non-ferrous metals viz. aluminium, copper and zinc witnessed corrections of 11%, 8% and 30% respectively in the last six months, owing to global macroeconomic uncertainties and weaker-than-earlier expected recovery in Chinese demand. While the calendar year commenced with a recovery in metal prices in January 2023 following the lifting of lockdowns in China, the rally was short-lived as metal prices plummeted again in subsequent months, due to an uncertainty over the strength of China’s recovery. Global consumption growth of these metals registered a slowdown in H1 CY23 and, going forward, growth is expected to remain muted in the current calendar year as well. In recent months, the regional premia across markets also remained subdued owing to bearish macro-economic sentiments. 

The report said in the domestic market, however, the demand remains resilient and government’s capital expenditure (capex) drive is expected to support domestic non-ferrous metal consumption growth at 9% in FY24, after growing at a healthy rate of 12% in FY23. In addition, the moderation in coal costs, if sustained, is expected to alleviate input cost pressures to an extent. It noted that the domestic e-auction premia on coal have eased in recent months at 78% in May 2023 from the exorbitant levels of >400% seen in the corresponding period of previous year. Nonetheless, industry profitability is expected to remain under pressure in FY24 with significant correction in metal prices in recent months. ICRA believes that price will remain range-bound at current levels in the near term. 

The CNX Nifty is currently trading at 18958.45, up by 141.05 points or 0.75% after trading in a range of 18861.35 and 18982.05. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 4.39%, Adani Ports & SEZ up by 2.88%, JSW Steel up by 2.78%, Tata Motors up by 2.15% and SBI Life Insurance up by 1.76%. On the flip side, Hero MotoCorp down by 1.23%, HDFC Life Insurance down by 1.12%, Kotak Mahindra Bank down by 0.47%, Wipro down by 0.21% and Apollo Hospital down by 0.10% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 655.66 points or 1.98% to 33,193.99, Straits Times rose 3.37 points or 0.11% to 3,208.72 and Taiwan Weighted added 47.73 points or 0.28% to 16,935.63, while Shanghai Composite weakened 3.71 points or 0.12% to 3,185.73, KOSPI dropped 17.2 points or 0.67% to 2,564.19 and Hang Seng declined 0.78 points to 19,147.35.