Sensex, Nifty add losses in early noon deals

A selling pressure intensified over the Dalal Street in early noon deals, with both Sensex and Nifty trading near their intraday low points, despite positive cues from other Asian markets. Continuous selling at Auto and Oil & Gas counters kept markets down. Sentiments remained downbeat, amid a private report stating that with the world facing growing economic instability and political tensions, volatility in geoeconomic and geopolitical relations between major economies is likely to result in global upheavals over the next six months.
 
On the global front, Asian markets were trading mostly in green, even after Hong Kong's central bank raised its benchmark rate by a quarter-point on Thursday, in tandem with the decision of the U.S. Federal Reserve. The Hong Kong Monetary Authority adjusted the Base Rate to 5.75 percent from 5.50 percent, with immediate effect. On Wednesday, the U.S. Federal Reserve had raised the target range for the federal funds rate by 25 basis points to 5.25 to 5.50 percent. The midpoint of the target range hit the highest since early 2001.

Back home, oil sector stocks were in watch, as credit rating agency Crisil in its latest report has said that India’s oil marketing companies (OMCs) could see operating profit rebound to Rs 1 lakh crore this fiscal (FY24), compared with an average of Rs 60,000 crore between fiscals 2017 and 2022, and thrice last fiscal’s low of Rs 33,000 crore.

The BSE Sensex is currently trading at 66554.19, down by 153.01 points or 0.23% after trading in a range of 66460.86 and 66984.17. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.50%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.57%, Realty up by 1.78%, Telecom up by 0.57%, PSU up by 0.29% and TECK up by 0.29%, while Auto down by 1.20%, Oil & Gas down by 0.54%, FMCG down by 0.44%, Consumer Durables down by 0.36% and Bankex down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.76%, Bajaj Finserv up by 1.37%, Tata Motors up by 0.76%, Bharti Airtel up by 0.66% and Infosys up by 0.63%. On the flip side, Mahindra & Mahindra down by 5.83%, Nestle down by 2.45%, Tech Mahindra down by 2.02%, Indusind Bank down by 1.22% and Axis Bank down by 1.00% were the top losers.

Meanwhile, credit rating agency Crisil in its latest report has said that India’s oil marketing companies (OMCs) could see operating profit rebound to Rs 1 lakh crore this fiscal (FY24), compared with an average of Rs 60,000 crore between fiscals 2017 and 2022, and thrice last fiscal’s low of Rs 33,000 crore. It said the higher profitability would help improve the sector’s credit metrics, which had weakened significantly in the past few fiscals amid muted profitability and significant capital expenditure (capex).

According to the report, the government-owned OMCs earn from two businesses: refining, where they earn a gross refining margin which is the value of refined products at the refinery gate minus the cost of crude oil used to produce them; and marketing, where they earn a margin on petrol, diesel and other petroleum products sold mainly through retail pumps. It noted that fiscal 2023 saw record gross refining margins averaging $15 per barrel. It also said global demand, particularly for diesel, was strong as prices of alternative fuels such as natural gas soared and the European Union imposed sanctions on Russian products.

However, the report said soaring crude oil prices, which averaged $94 per barrel for the fiscal, were not accompanied by higher retail prices, which have remained unchanged since May 2022. What that meant was, despite strong refining margins, marketing losses were a steep Rs 8 per litre, which kept the overall profitability of OMCs weak last fiscal. Fortuitously, there was a steady fall in the price of crude oil as last fiscal progressed, which helped OMCs swing from an operating loss in the first quarter to strong profits in the fourth quarter.

The CNX Nifty is currently trading at 19744.85, down by 33.45 points or 0.17% after trading in a range of 19718.50 and 19867.55. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Cipla up by 9.52%, Sun Pharma up by 2.74%, Dr Reddy's Laboratories up by 2.38%, Divi's Laboratories up by 2.19% and Bajaj Finserv up by 1.29%. On the flip side, Mahindra & Mahindra down by 5.79%, Britannia own by 3.61%, Nestle down by 2.34%, Tata Consumer Products down by 2.22% and Tech Mahindra down by 2.00% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 222.82 points or 0.68% to 32,891.16, Hang Seng advanced 193.43 points or 0.99% to 19,558.57, Taiwan Weighted added 79.27 points or 0.46% to 17,241.82, Straits Times rose 20.59 points or 0.62% to 3,325.55 and KOSPI increased 11.45 points or 0.44% to 2,603.81, while Jakarta Composite plunged 7.54 points or 0.11% to 6,940.74 and Shanghai Composite weakened 8.44 points or 0.26% to 3,214.59.