Sensex, Nifty remain near neutral lines during early afternoon deals

Indian equity benchmarks were lingering near their neutral lines in early afternoon deals, with both Sensex and Nifty trading marginally higher, amid buying at Telecom and Capital Goods counters, despite negative cues from other Asian markets. Sentiments were positive as S&P Global Rating analyst said that India can get rating support over time if it utilises the highest-ever dividend of over Rs 2.11 trillion received from the Reserve Bank to reduce fiscal deficit.  The RBI board has decided to pay a record Rs 2.11 trillion dividend to the government for the fiscal ended March 2024, more than double of what was budgeted expectation of Rs 1.02 trillion. Traders took a note of an industry body, the Indian Staffing Federation’s (ISF) statement that India should consider lowering the 18% tax imposed on recruitment agencies for providing outsourced staff to big companies, which could help boost employment and wages of contract workers.

On the global front, Asian markets were trading in red, after Singapore's industrial production declined for the second straight month in April, though at a slower pace compared to the previous month. The data from the Economic Development Board revealed that industrial production declined 1.6 percent year-on-year in April, following a 9.2 percent plunge in March. The expected fall was 0.7 percent. Excluding bio-medical manufacturing, industrial production advanced 1.7 percent annually in April, in contrast to a 5.7 percent decline in the prior month.

The BSE Sensex is currently trading at 75444.73, up by 26.69 points or 0.04% after trading in a range of 75244.22 and 75582.28. There were 15 stocks advancing against 14 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.71%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Telecom up by 2.05%, Capital Goods up by 1.56%, PSU up by 1.46%, Oil & Gas up by 1.17% and Industrials up by 1.13%, while FMCG down by 0.48%, Realty down by 0.46%, IT down by 0.31%, Healthcare down by 0.23%, TECK down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.28%, Ultratech Cement up by 1.15%, HDFC Bank up by 1.01%, Bharti Airtel up by 0.79% and Power Grid up by 0.69%. On the flip side, TCS down by 0.93%, ITC down by 0.87%, Mahindra & Mahindra down by 0.79%, ICICI Bank down by 0.78% and Sun Pharma down by 0.58% were the top losers.

Meanwhile, CRISIL Ratings in its latest report has said that revenue growth of road transport fleet operators is expected to double to 9-11 per cent this fiscal (FY25), riding on better domestic demand amid tepid exports. It further said operating margin is seen improving 75-100 basis points on better fleet utilisation and steady fuel costs.

According to the report, the credit profile of operators should remain strong as well, as they may look to moderate capital expenditure (capex) towards fleet expansion, following strong additions in the past three fiscal years, as new guidelines for air-conditioned driver cabins kick in the next fiscal year.

The report further said fleet operators expanded their fleet size by 60 per cent in the three fiscal years through 2024, as demand recovered sharply post the Covid-19 pandemic and returns from fleet additions were immediate. It said with focus now on consolidation of operations, fleet additions would moderate to 15 per cent of the existing fleet size this fiscal, on a significantly expanded base. It added that the Ministry of Road Transport and Highways mandate of air conditioned cabins for drivers from October 2025, would lead to nominal capex, if operators decide to retrofit older vehicles.

The CNX Nifty is currently trading at 22984.40, up by 16.75 points or 0.07% after trading in a range of 22908.00 and 23004.05. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.09%, Larsen & Toubro up by 1.38%, Divi's Lab up by 1.34%, Shriram Finance up by 1.10% and Ultratech Cement up by 1.05%. On the flip side, Apollo Hospital Ent. down by 1.22%, Tata Consumer Products down by 1.15%, Adani Ports & SEZ down by 1.07%, ITC down by 0.94% and TCS down by 0.90% were the top losers.

All Asian markets were trading in red; Hang Seng declined 304.7 points or 1.61% to 18,564.01, Shanghai Composite weakened 26.99 points or 0.87% to 3,089.40, Straits Times fell 9.8 points or 0.29% to 3,312.82, KOSPI dropped 34.21 points or 1.27% to 2,687.60, Nikkei 225 slipped 457.11 points or 1.18% to 38,646.11 and Taiwan Weighted lost 42.09 points or 0.2% to 21,565.34.