Weak trade persists over Dalal Street

A weak trade persisted over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading near their neutral lines, amid selling in all sectors, despite positive cues from other Asian markets. Sentiments were negative, amid a private report stating that India's economy likely grew at its slowest pace in a year in the January-March quarter due to weak demand. However, traders got some relief, after the Reserve Bank of India (RBI) in its latest data on ‘the financial performance of non-government non-financial (NGNF) foreign direct investment (FDI) companies in India’ has showed that the net profit of FDI companies in India, or multinational companies, rose 45.2 per cent during 2022-23. Private limited FDI companies recorded higher profit growth as compared with public limited FDI companies. 

On the global front, Asian markets were trading mostly in green, as Hong Kong's foreign trade deficit decreased considerably in April from a year ago as export growth accelerated amid more outflows to the Mainland and the United States. The data from the Census and Statistics Department showed that the trade deficit narrowed to HK$10.2 billion in April from HK$36.6 billion in the same month last year. In March, the trade shortfall was HK$45.0 billion. The visible trade deficit of HK$10.2 billion was equivalent to 2.6 percent of the value of imports.

The BSE Sensex is currently trading at 75345.49, down by 45.01 points or 0.06% after trading in a range of 75338.49 and 75585.40. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.99%, while Small cap index was down by 1.11%.

The top losing sectoral indices on the BSE were Realty down by 1.93%, Power down by 1.84%, PSU down by 1.78%, Utilities down by 1.63% and Oil & Gas down by 1.27%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Ultratech Cement up by 0.67%, Hindustan Unilever up by 0.66%, TCS up by 0.53%, Bajaj Finance up by 0.48% and Asian Paints up by 0.45%. On the flip side, Power Grid down by 1.32%, NTPC down by 1.18%, Tata Motors down by 0.96%, Tata Steel down by 0.77% and SBI down by 0.62% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the general insurance industry’s gross direct premium income (GDPI) is likely to touch Rs 3.7 trillion by FY2026, a robust 32% rise from Rs 2.8 trillion in FY2024. While the growth for private insurers is expected to remain strong, that of PSU insurers is likely to remain moderate because of the weak capital position. The profitability for private insurers is likely to improve supported by better underwriting performance. The combined ratio for PSU insurers, though expected to be lower, will remain weak, thereby impacting the net profitability. 

According to the report, the industry’s GDPI saw a robust 15.5% year-on-year (YoY) expansion in FY2024, rising to Rs. 2.79 trillion supported by the health segment. Apart from this, the growth in the motor segment was healthy, supported by the increase in the new vehicle sales (two-wheelers, or 2W, rose by 13.3% YoY and passenger vehicles, or PVs, by 8.4% YoY in FY2024)

It further stated that with the high frequency and severity of natural catastrophic (NAT CAT) events in FY2024, the net loss ratio of the fire segment was impacted; however, considering the reinsurance and low retention in this segment, the impact on the overall net loss ratio of the industry was manageable. Profitability for private players remained strong supported by improved investment income, which is likely to continue.  

The CNX Nifty is currently trading at 22928.40, down by 4.05 points or 0.02% after trading in a range of 22924.10 and 22998.55. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 2.24%, Divi's Lab up by 2.14%, Dr. Reddy's Lab up by 1.96%, SBI Life Insurance up by 1.73% and Hero MotoCorp up by 1.53%. On the flip side, Adani Ports & SEZ down by 1.89%, BPCL down by 1.75%, Coal India down by 1.50%, Power Grid down by 1.48% and NTPC down by 1.20% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 64.58 points or 0.34% to 18,891.93, Jakarta Composite gained 91.22 points or 1.27% to 7,267.64, Shanghai Composite strengthened 1.63 points or 0.05% to 3,125.67, Straits Times rose 13.01 points or 0.39% to 3,331.46 and Taiwan Weighted added 54.64 points or 0.25% to 21,858.41. On the flip side, KOSPI dropped 0.14 points or 0.01% to 2,722.85 and Nikkei 225 slipped 44.65 points or 0.11% to 38,855.37.