Domestic indices trim some gains on profit booking

Domestic equity markets trimmed some of their gains in late morning deals as some traders looked to cash in on the recent strength in the markets. Weak cues from global markets also weighed on the domestic sentiments. However, markets continued trade in green on account of buying in Mahindra & Mahindra, SBI, ICICI Bank and HDFC Bank.  Traders were getting encouragement on report that India and the UK have begun crunch-time talks to secure a landmark free-trade deal, as leaders on both sides seek to resolve outstanding issues before they face election battles next year. Sentiments also got a boost as Minister of State for Finance Pankaj Chaudhary said India will become a $5 trillion economy early in the ‘Amrit Kaal’ on the path to achieve the goal of becoming an advanced economy by 2047.

On the global front, Asian markets were trading in red following weak cues from US markets overnight. Sentiments were weak on rising treasury yields and as a stronger dollar weighed on commodity prices that took down materials and energy stocks. Back home, on the BSE sectoral front,  traders were seen pilling up position in Utilities, Power, Oil & Gas, Basic Materials and Bankex, while selling was witnessed in IT, Realty, TECK, Industrials and Telecom.

The BSE Sensex is currently trading at 69128.65, up by 263.53 points or 0.38% after trading in a range of 68954.88 and 69381.31. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.02%, while Small cap index down by 0.03%.

The top gaining sectoral indices on the BSE were Utilities up by 2.84%, Power up by 2.70%, Oil & Gas up by 1.35%, Basic Materials up by 1.25% and Bankex up by 0.91%, while IT down by 0.81%, Realty down by 0.74%, TECK down by 0.60%, Industrials down by 0.28% and Telecom down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.01%, SBI up by 1.68%, ICICI Bank up by 1.35%, HDFC Bank up by 1.31% and Axis Bank up by 0.85%. On the flip side, HCL down by 1.45%, Infosys down by 1.19%, Indusind Bank down by 1.07%, Hindustan Unilever down by 0.80% and Larsen & Toubro down by 0.71% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that the Indian IT sector's revenue growth will inch up to over 6 per cent in FY2024-25 from 3-5 per cent estimated for the ongoing financial year (FY24). It noted that the slower growth will have an impact on the hiring plans and staff addition will continue to remain ‘muted’ for the next 2-3 quarters. The $250-billion industry grew by 9.2 per cent in FY2022-23. 

According to the report, the muted hiring outlook is the result of a weak demand scenario and companies will be focusing on utilising the capacity in the past and improving the overall utilisation levels. It explained that the macroeconomic challenges in the biggest markets of the US and Europe have caused a slowdown in demand. It said the increased hiring in the recent past inflated the overall wage bills of companies and impacted the operating profit margins, but the same is likely to improve over the medium term as the wage costs stabilise and employee utilisation goes up.

The agency further said attrition has tapered in the last few quarters after rising up as there was higher demand for workers during the time of high demand for the sector's services. It stated that the revenue growth from the US (58-60 per cent of the industry's revenues) witnessed a sharp moderation in recent quarters as macroeconomic headwinds continued to intensify coupled with instability in the banking sector in the US, which is a key vertical for the Indian IT services companies, leading to lower technological spending, specially towards discretionary and non-critical transformation programmes.

The CNX Nifty is currently trading at 20759.25, up by 72.45 points or 0.35% after trading in a range of 20711.15 and 20849.60. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 10.19%, Adani Ports & SEZ up by 9.33%, Mahindra & Mahindra up by 1.94%, BPCL up by 1.69% and SBI up by 1.56%. On the flip side, HCL down by 1.66%, Indusind Bank down by 1.34%, Infosys down by 1.32%, Divi's Lab down by 1.24% and Coal India down by 1.20% were the top losers.

All Asian markets were trading lower; Hang Seng declined 274.6 points or 1.68% to 16,371.45, Nikkei 225 slipped 412.56 points or 1.26% to 32,818.71, Taiwan Weighted lost 104.9 points or 0.61% to 17,316.58, Straits Times fell 8.43 points or 0.27% to 3,075.65, KOSPI dropped 17.91 points or 0.72% to 2,497.04, Shanghai Composite weakened 22.8 points or 0.76% to 3,000.11 and Jakarta Composite plunged 28.5 points or 0.4% to 7,065.10.