Domestic indices trim gains in late morning deals

Domestic equity markets trimmed their gains in late morning deals on account of selling in Axis Bank, Asian Paints, ICICI Bank and TCS stocks. Mixed cues from global markets weighed on the domestic sentiments. However, broader indices outperformed their large peers with BSE Mid cap index and Small cap index gaining in the range of 0.55-0.65%. Traders were getting some encouragement with a private report stating that India will remain the fastest-growing major economy this year and next, boosted by continued strong government spending. It said inflation was unlikely to surge again. Meanwhile, India’s business activity expanded at the fastest pace in four months in January on stronger demand. HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 61.0 this month, its highest since September, from December’s final reading of 58.5.

On the global front, Asian markets were trading mixed as traders were cautious ahead of some crucial economic data from the U.S., including a report on price inflation, and central bank decisions that could impact the outlook for interest rates. Back home, on the BSE sectoral front, traders were seen pilling up position in Telecom, Metal, PSU, Basic Materials and FMCG, while selling was witnessed in Realty, Bankex  and Auto. 

The BSE Sensex is currently trading at 70544.74, up by 174.19 points or 0.25% after trading in a range of 70001.60 and 70906.48. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.63%, while Small cap index up by 0.55%.

The top gaining sectoral indices on the BSE were Telecom up by 1.90%, Metal up by 1.60%, PSU up by 1.59%, Basic Materials up by 1.09% and FMCG up by 1.03%, while Realty down by 1.02%, Bankex down by 0.31%, Auto down by 0.08% were the only losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.91%, Hindustan Unilever up by 1.89%, Tata Steel up by 1.81%, Indusind Bank up by 1.78% and Larsen & Toubro up by 1.64%. On the flip side, Axis Bank down by 2.70%, Asian Paints down by 2.26%, ICICI Bank down by 1.44%, TCS down by 0.74% and Bajaj Finance down by 0.52% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the cement industry is on course to add capacity by 150-160 million tonnes from FY25 to FY28 as it aims to meet rising demand from the infrastructure and housing sectors. In the past five fiscals, the industry has added capacity by 119 million tonnes (MT) per annum to reach a total of 595 MT now. 

According to the report, the capacity addition is for the purpose of meeting the rising demand as well as to consolidate market share in a highly fragmented and competitive industry. Cement demand grew 8 per cent in fiscal 2022 and 12 per cent in FY23. As much as 70-75 MT capacity addition is expected to be commissioned in next fiscal, with 50-55 per cent concentrated in the eastern and central regions. Large players will account for 50-55 per cent of the planned capacity addition. 

However, it said incremental supply and stiffer competition will cap price growth but benign cost will protect and aid margins. Robust demand in the past two fiscals has bolstered the balance sheets of large cement players and some mid-sized ones with strong market presence, prompting them to expand capacity on the back of healthy cash accrual and credit profile.

The report further said this fiscal (FY24), demand is projected to grow 10-12 per cent, driven by the government push to affordable housing and pre-election spending on infrastructure. That said, incremental supply and heightened competition will limit price growth to 0-1 per cent, maintaining prices at Rs 390-395 per 50-kg bag, and keep utilisation at 70-75 per cent. Next fiscal, the demand growth is expected to moderate to 4-6 per cent on a high base of the previous three fiscals. Also, rising raw material cost and a flat base will lead to an uptick of 1-3 per cent in prices to Rs 400-405 per 50-kg bag.

The CNX Nifty is currently trading at 21297.15, up by 58.35 points or 0.27% after trading in a range of 21137.20 and 21408.60. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.38%, Dr. Reddy's Lab up by 2.65%, Indusind Bank up by 1.96%, SBI up by 1.89% and Tata Steel up by 1.84%. On the flip side, Axis Bank down by 2.79%, Asian Paints down by 2.18%, Hero MotoCorp down by 1.98%, ICICI Bank down by 1.42% and TCS down by 0.69% were the top losers.

Asian markets were trading mixed; Hang Seng advanced 207.41 points or 1.33% to 15,561.39, Taiwan Weighted added 1.24 points or 0.01% to 17,875.83, Straits Times rose 4.24 points or 0.14% to 3,139.49 and Shanghai Composite strengthened 4.54 points or 0.16% to 2,775.52. However, KOSPI dropped 10.30 points or 0.42% to 2,468.31, Jakarta Composite plunged 45.13 points or 0.63% to 7,211.10 and Nikkei 225 slipped 281.86 points or 0.78% to 36,235.71.