Sensex, Nifty stage recovery in early noon deals

Indian equity benchmarks staged recovery in early afternoon deals, supported by buying at Auto and Consumer Durables counters but trade remained in red, amid negative cues from other Asian markets, as investors fretted about a sustained rise in oil prices and U.S. bond yields. Traders were cautious, amid a private report stating that India's central bank has urged lenders to tighten controls on tiny personal loans following a surge in borrowing by low income consumers and may impose stricter measures to avert risks of a blowout in defaults. 

However, recovery witnessed over the Dalal Street, as some relief came after Union Minister of State for Food Processing Industries and Jal Shakti Prahlad Singh Patel has said that India is one of the fastest-growing economies with many investment opportunities, especially in the food processing sector. The minister also noted that World Food India event is an effort towards projecting potential of the sector before global stakeholders. 
 
On the global front, Asian markets were trading mostly in red, even after Japan posted a merchandise trade surplus of 62.4 billion yen in September. That blew away expectations for a deficit of 425.0 billion yen following the 937.8 billion yen shortfall in August. Exports were up 4.3 percent on year, beating forecasts for an increase of 3.1 percent after easing 0.8 percent in the previous month.

The BSE Sensex is currently trading at 65740.32, down by 136.70 points or 0.21% after trading in a range of 65343.50 and 65826.23. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell by 0.23%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Auto up by 0.43%, Consumer Durables up by 0.24%, Consumer Disc up by 0.16%, Telecom up by 0.14% and Utilities up by 0.04%, while Metal down by 1.06%, Basic Materials down by 0.51%, Oil & Gas down by 0.50%, Energy down by 0.46% and Realty down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 2.32%, Indusind Bank up by 1.87%, Axis Bank up by 0.35%, Larsen & Toubro up by 0.35% and Asian Paints up by 0.22%. On the flip side, Wipro down by 2.87%, Tata Steel down by 1.14%, Tech Mahindra down by 1.02%, JSW Steel down by 0.95% and Bharti Airtel down by 0.84% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that cement volumes are likely to rise by a healthy 9-10% in FY2024 supported by demand from infrastructure and urban housing sectors. In H1 FY2024, the volumes increased by 11-12% YoY. Nevertheless, it said the below normal monsoons could impact the overall crop output in 2023, adversely impacting farm incomes and demand for rural housing in some markets. Moreover, it said with the upcoming State Elections the release of funds towards ongoing infra projects may slow down, posing some downside risks to cement volume off-take in H2 FY2024. The cement prices in FY2024 are expected to sustain at previous-year levels. ICRA’s outlook on the cement sector is Stable.

According to the report, the increasing focus on green power is likely to lower the cement industry’s dependence on high-cost thermal power and grid for power requirements, thereby reducing the operating costs. Assuming thermal power cost at Rs 6.5 /unit, waste heat recovery system (WHRS) power cost at Rs 0.75 /unit and solar power cost at Rs 4.5/unit, a 25% replacement of thermal power consumption by green power could lead to cost savings of around 15-18%, while also reducing the carbon footprint.

The report said supported by healthy demand prospects, the capacity addition in the cement industry is estimated at 63-70 million MT during FY2024-FY2025, of which around 33-37 million MT will be added in FY2024 (FY 2023: 27 MTPA) the highest addition in the last five years. The eastern and central regions are expected to lead the expansion.

The CNX Nifty is currently trading at 19639.55, down by 31.55 points or 0.16% after trading in a range of 19512.35 and 19664.90. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were LTIMindtree up by 5.27%, Bajaj Auto up by 5.11%, Nestle up by 2.47%, Hero MotoCorp up by 2.19% and Indusind Bank up by 1.88%. On the flip side, Wipro down by 2.87%, UPL down by 1.22%, Tata Steel down by 1.14%, Hindalco down by 1.07% and Tech Mahindra down by 1.02% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 399.55 points or 2.25% to 17,332.97, Jakarta Composite plunged 53.16 points or 0.77% to 6,874.75, Straits Times fell 37.61 points or 1.2% to 3,099.01, Shanghai Composite weakened 52.66 points or 1.72% to 3,006.05, KOSPI dropped 46.80 points or 1.94% to 2,415.80 and Nikkei 225 slipped 611.63 points or 1.95% to 31,430.62, while Taiwan Weighted added 11.82 points or 0.07% to 16,452.73.