Weak trade continues over Dalal Street

A weak trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading lower, on the back of mixed cues from other Asian markets along with selling at Consumer Durables and FMCG counters.  Further, Bajaj Finance and Bajaj Finserv fell the most among major companies on the BSE. Investors were cautious ahead of the Interim Budget on February 01 and US Federal Reserve's rate meeting on January 31. Sentiments were muted, amid a private report stating that foreign Portfolio Investors (FPIs) have expressed concerns about market regulator Securities and Exchange Board of India’s (Sebi) plan to introduce instant trade settlement in the equity markets.

However, downside remained capped, as Union Minister of Agriculture & Farmers’ Welfare and Tribal Affairs, Arjun Munda said that the agriculture sector in the country is making an important contribution to the economy and livelihood of crores of people. 54.6% of the country's workforce is engaged in agriculture and allied sectors’ activities. The share of agriculture sector in GDP is 18.6%, while the sown area is 139.3 million hectares, out of the total geographical area of the country. 

On the global front, Asian markets were trading mixed, after the unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in December. That was beneath expectations for a reading of 2.5 percent, which would have been unchanged from November. The jobs-to-applicant ratio was 1.27 - shy of forecasts for 1.28, which also would have been unchanged.

The BSE Sensex is currently trading at 71705.42, down by 236.15 points or 0.33% after trading in a range of 71572.79 and 72142.23. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.41%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.84%, Metal up by 1.02%, PSU up by 0.96%, Energy up by 0.84% and IT up by 0.80%, while Consumer Durables down by 0.75%, FMCG down by 0.20%, Utilities down by 0.17%, Bankex down by 0.06% and Power down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.51%, Hindustan Unilever up by 1.92%, Wipro up by 1.77%, JSW Steel up by 1.74% and SBI up by 1.52%. On the flip side, Bajaj Finance down by 4.60%, Bajaj Finserv down by 2.25%, ITC down by 2.21%, Sun Pharma down by 1.43% and Reliance Industries down by 1.38% were the top losers.

Meanwhile, CRISIL Ratings in its latest report has said that the implementation of the Approved List of Models and Manufacturers (ALMM) from April 1, 2024, is expected to help keep operating margins of domestic module makers strong at 12-14 per cent in next fiscal (FY25), in line with the level likely this fiscal. This will be mostly driven by healthy domestic and export demand. 

According to the report, this fiscal (FY24), profitability is expected to almost double over the previous fiscal as rising share of exports, which fetch a 15-20 per cent premium over domestic prices, will more than offset the surge in imports in the absence of ALMM.

The report further said higher sales volumes (both domestic and exports) and healthy margins will lead to robust accruals for module makers rated by CRISIL Ratings in the current and next fiscals. This will support capital expenditure for capacity expansion and technology upgrade and sustain healthy credit profiles. That said, any further extension in the ALMM implementation would be a risk to the estimates. Also, any change in the US policy towards imports from China, will remain monitorable.  

The CNX Nifty is currently trading at 21703.20, down by 34.40 points or 0.16% after trading in a range of 21655.25 and 21813.05. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.41%, Hindalco up by 2.61%, Tata Motors up by 2.49%, ONGC up by 2.30% and Hindustan Unilever up by 1.89%. On the flip side, Bajaj Finance down by 4.62%, ITC down by 2.22%, Bajaj Finserv down by 2.20%, Sun Pharma down by 1.51% and Reliance Industries down by 1.39% were the top losers.

Asian markets were trading mixed; Hang Seng declined 354.83 points or 2.21% to 15,722.41, Taiwan Weighted lost 85 points or 0.47% to 18,034.63, Shanghai Composite weakened 53.9 points or 1.87% to 2,829.46 and KOSPI dropped 1.84 points or 0.07% to 2,498.81, while Jakarta Composite gained 26.98 points or 0.38% to 7,184.16, Straits Times rose 10.18 points or 0.32% to 3,150.49 and Nikkei 225 surged 38.92 points or 0.11% to 36,065.86.