Benchmarks trim some gains in late morning deals

Indian equity benchmarks trimmed some of their initial gains but continued to trade in green in late morning deals, led by gains in Realty, Consumer Durables and Auto stocks. Traders took some support with the Reserve Bank of India (RBI) stating that India’s GDP growth is robust on the back of solid investment demand which is supported by healthy balance sheets of banks and corporates, the government’s focus on capital expenditure and prudent monetary, regulatory and fiscal policies. However, gains got trimmed as market participants remained on sidelines ahead of India’s gross domestic product (GDP) data for Q4FY24 and the results of the Lok Sabha polls. On the global front, Asian markets are trading mostly in green as the latest round of US economic data signaled momentum is slowing, boosting the case for the Federal Reserve to start cutting interest rates this year. 

The BSE Sensex is currently trading at 74034.48, up by 148.88 points or 0.20% after trading in a range of 74004.74 and 74478.89. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.66%, while Small cap index was down by 0.43%.

The top gaining sectoral indices on the BSE were Realty up by 0.92%, Consumer Durables up by 0.65%, Auto up by 0.51%, Utilities up by 0.48% and Capital Goods up by 0.36%, while PSU down by 0.82%, Healthcare down by 0.74%, TECK down by 0.69%, IT down by 0.61% and Telecom down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.42%, Larsen & Toubro up by 1.83%, Bajaj Finance up by 1.74%, Ultratech Cement up by 1.26% and Titan Company up by 1.09%. On the flip side, Kotak Mahindra Bank down by 1.18%, Bharti Airtel down by 1.17%, Infosys down by 0.97%, Axis Bank down by 0.96% and TCS down by 0.95% were the top losers.

Meanwhile, Moody's Ratings in its latest report has said that capital requirements will remain high for Indian corporates as they go in for capacity expansion and inorganic growth spending. Moody's estimates that 16 of the 23 rated companies will require $70-100 billion of funding annually in the next two years for growth spending, refinancing requirements and shareholder payments. It said while improving domestic liquidity and companies' internal cash flows can cover a large portion of their capital needs, offshore funding will remain an important funding channel. It noted that capacity expansion, inorganic growth spending, refinancing and working capital needs, along with shareholder payments, will keep capital requirements high for nonfinancial corporates in India. 

According to the report, capital spending by non-financial corporates will remain high as they expand their capacities to cater to the strong consumption growth expected in the country, at a time when their capacity utilization is already high. Expectations of strong consumption growth are driven by India's growing population, rising disposable incomes and favourable demographic trends, including a young population and rising urbanisation. The government's ongoing infrastructure spending also results in a multiplier effect on demand across industrial sectors including steel, cement, automobiles and oil and gas.

It further said even though the government is unlikely to achieve its target of raising the share of manufacturing activity to 25 per cent of gross domestic product (GDP) by FY24-25 from 13 per cent in FY22-23, assuming that the target is achieved by the end of the decade, the manufacturing sector's contribution to nominal GDP will rise to around $1.7 trillion in 2029-30 from $440 billion in 2022-23. This is based on assumption of average annual real GDP growth of 6.5 per cent over the same period.

The CNX Nifty is currently trading at 22523.60, up by 34.95 points or 0.16% after trading in a range of 22518.10 and 22653.75. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 3.28%, Mahindra & Mahindra up by 2.48%, Bajaj Finance up by 1.85%, Larsen & Toubro up by 1.85% and Shriram Finance up by 1.53%. On the flip side, LTIMindtree down by 1.53%, Divi's Lab down by 1.37%, ONGC down by 1.16%, Infosys down by 1.15% and BPCL down by 1.08% were the top losers.

Asian Markets are trading mostly in green; Hang Seng advanced 194.6 points or 1.07% to 18,424.79, Shanghai Composite strengthened 3.76 points or 0.12% to 3,095.44, Straits Times rose 7.87 points or 0.24% to 3,331.25, KOSPI increased 11.44 points or 0.43% to 2,646.88, Nikkei 225 surged 401.03 points or 1.05% to 38,455.16. 

On the flip side, Jakarta Composite plunged 44.98 points or 0.64% to 6,989.16 and Taiwan Weighted lost 59.47 points or 0.28% to 21,305.01.