Benchmarks continue to trade in green in morning deals

Indian equity benchmarks continued to trade in green in morning deals, led by gains in Metal, Telecom and Auto stocks. Sentiments remained up-beat as RBI data showed that interrupting a two-month streak of decline, outward foreign direct investment (FDI) rose sequentially to $1.85 billion in July over $1.07 billion in June, an increase of 73 per cent. Some support came as BSE data showing that Foreign Portfolio Investors (FPIs) were net buyers, purchasing shares worth Rs 61.51 crore. Traders overlooked CARE Ratings stating that the erratic monsoon, which is affecting sowing, and global developments will keep the food inflation at elevated levels and would also hit the demand in rural India owing to lower income and inflation. Investors now await domestic GDP (gross domestic product) data for the April-June quarter, scheduled to be released post-market hours on Thursday. On the global front, Asian markets are trading mostly higher as China's largest banks reportedly prepare to cut interest rates and investors speculate that the US Federal Reserve is nearing the end of its tightening campaign.

The BSE Sensex is currently trading at 65411.75, up by 335.93 points or 0.52% after trading in a range of 65288.25 and 65441.15. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.64%, while Small cap index was up by 0.81%.

The top gaining sectoral indices on the BSE were Metal up by 1.03%, Telecom up by 0.96%, Auto up by 0.89%, Realty up by 0.89% and Industrials up by 0.77%, while Utilities down by 0.22%, Power down by 0.16% and Oil & Gas down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were JIO Financial Serv. up by 4.99%, Tata Steel up by 2.17%, Mahindra & Mahindra up by 1.56%, Axis Bank up by 1.55% and Ultratech Cement up by 1.07%. On the flip side, Power Grid Corporation down by 1.17%, NTPC down by 0.16% and Asian Paints down by 0.05% were the top losers.

Meanwhile, Icra Ratings in its latest report has said that Indian IT services sector's revenue growth will slow down to 3-5 per cent in the current fiscal (FY24) from 9.2 per cent in the previous financial year. It said the profitability will also take a beating in this financial year and the operating profit margin will narrow by up to 1 percentage point to 20-21 per cent.

It said Indian IT services companies witnessed a sharp moderation in growth momentum between Q3 FY23 to Q1 FY24 owing to the evolving macroeconomic headwinds in key markets of the US and Europe. It stated its sample set recorded a revenue growth of 3.8 per cent in the first quarter in USD terms, the lowest in the last 10 quarters. He added among the geographies, growth in the US witnessed a sharp moderation compared to that in Europe.

Icra Ratings’ sector head Deepak Jotwani said there has been persistent uncertainty in the key markets for IT companies which has resulted in pauses and deferral of non-critical projects and slowdown in discretionary IT spends by key sectors like banking, financial services and insurance, retail, technology and communication. Jotwani said lower operating leverage will limit the impact of the slower revenue growth on the profitability, and the ability of most companies to work with multiple levers such as onshore-offshore mix, employee utilisation levels, employee pyramid optimisation, and ability to manage costs will help.

The CNX Nifty is currently trading at 19433.80, up by 91.15 points or 0.47% after trading in a range of 19407.85 and 19443.80. There were 41 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were JIO Financial Services up by 4.99%, Tata Steel up by 2.30%, Hindalco up by 1.63%, Axis Bank up by 1.52% and Mahindra & Mahindra up by 1.51%. On the flip side, BPCL down by 1.61%, Power Grid Corporation down by 1.23%, Apollo Hospital down by 0.60%, Britannia Industries down by 0.33% and Divi's Lab down by 0.17% were the top losers.

Asian markets are trading mostly higher; Hang Seng advanced 95.17 points or 0.51% to 18,579.20, Taiwan Weighted added 102.26 points or 0.62% to 16,725.91, Straits Times rose 7.85 points or 0.24% to 3,230.94, Jakarta Composite gained 21.44 points or 0.31% to 6,979.28, KOSPI increased 13.37 points or 0.52% to 2,565.53 and Nikkei 225 surged 167.43 points or 0.52% to 32,394.40.

On the flip side, Shanghai Composite weakened 4.14 points or 0.13% to 3,131.75.