Domestic indices continue to trade flat in late morning deals

Domestic equity indices continued to trade flat in late morning deals amid mixed cues from other Asian markets. Meanwhile, broader indices on the BSE were trading mixed. Traders remained cautious despite World Bank President Ajay Banga’s statement that amidst risk of a global slowdown in the early part of next year, India is expected to remain shielded from its effects due to robust domestic consumption. On the BSE sectoral front, traders were seen pilling up position in Healthcare, FMCG, Energy, Oil & Gas and PSU, while selling was witnessed in IT, TECK, Capital Goods, Power and Auto.

On the global front, Asian markets were trading mixed as investors digested a slew of economic data across the region. China kept its one and five-year loan prime rates unchanged, days after China’s second quarter GDP came in below expectations. Back home, in the stock specific development, Dr Reddy's Laboratories surged after the company received 'clean chit' post the United States Food & Drug Administration (USFDA) routine inspection at the Andhra Pradesh (AP) facility. 

The BSE Sensex is currently trading at 67061.31, down by 36.13 points or 0.05% after trading in a range of 66831.38 and 67129.39. There were 9 stocks advancing against 21 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 0.31%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.82%, FMCG up by 0.66%, Energy up by 0.48%, Oil & Gas up by 0.46% and PSU up by 0.27%, while IT down by 1.11%, TECK down by 1.00%, Capital Goods down by 0.65%, Power down by 0.55% and Auto down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.45%, Sun Pharma up by 0.80%, Indusind Bank up by 0.59%, SBI up by 0.45% and Kotak Mahindra Bank up by 0.39%. On the flip side, Infosys down by 2.13%, HCL down by 1.50%, Ultratech Cement down by 1.45%, Larsen & Toubro down by 0.78%  and TCS down by 0.75% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that premium hotel occupancy in India is estimated to be at a decadal-high of 70-72 per cent in FY2024 after recovering to 68-70 per cent in FY2023. It also said premium hotel average room rates (ARRs) are expected to be at Rs 6,000 to Rs 6,200 in FY2024. It noted that consistent improvement in consumer sentiments despite the inflationary environment, stable corporate performance, and domestic air passenger traffic inching above pre-Covid levels augur well for travel and hotel demand.

According to the report, while the occupancy is expected to be at decadal highs, the RevPAR (Revenue per available room) is expected to remain at a 20-25 per cent discount to the FY2008 peak. ICRA expects an improving trend in ARRs as well across markets in FY2024, driven by healthy occupancy. Further, mid-scale hotels have also witnessed traction across cities and are likely to continue reporting healthy ARRs and occupancy in FY2024. It stated that the hotel supply pipeline is expected to grow only at a three-year CAGR of 3.5-4 per cent, adding approximately 15,000-16,000 rooms to the pan-India premium inventory of about 95,000 rooms across 12 key cities in India. It said demand recovery has been strong in the last one year, and it anticipates the trend to continue in FY2024 as well.

The ratings agency further said that the revenue growth for the Indian hotel industry in FY24 is estimated to be 13-15 per cent notwithstanding the potential impact on demand from exogenous shocks, if any. It also said sustenance of a large part of the cost-rationalisation measures undertaken during the Covid period, along with operating leverage benefits, resulted in a sharp expansion in margins.

The CNX Nifty is currently trading at 19833.65, up by 0.50 points after trading in a range of 19758.40 and 19847.70. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.33%, ITC up by 1.44%, Cipla up by 0.88%, Sun Pharma up by 0.81% and Indusind Bank up by 0.60%. On the flip side, Infosys down by 2.16%, HCL down by 1.56%, Ultratech Cement down by 1.47% and Hero MotoCorp down by 1.00% and TCS down by 049% were the top losers.

Asian markets were trading mixed; Taiwan Weighted added 48.45 points or 0.28% to 17,164.89, Hang Seng advanced 51.58 points or 0.27% to 19,003.89 and Jakarta Composite gained 26.95 points or 0.39% to 6,857.15. However, Shanghai Composite weakened 6.59 points or 0.21% to 3,192.25, KOSPI dropped 4.34 points or 0.17% to 2,603.90, Straits Times fell 2.6 points or 0.08% to 3,272.64 and Nikkei 225 slipped 404.93 points or 1.25% to 32,491.10.