Bourses trim more gains in late afternoon session

Indian equity markets trimmed more gains but continued to trade in green in late afternoon session. Traders were concerned ahead of Reserve Bank of India’s interest rate decision due on June 07. Investors were hoping that the central bank is likely to maintain the status quo on repo rate at 6.50%. However, some support came in as BJP-led NDA is likely returned to power for 3rd term. On the global front, Asian markets were trading mostly in green amid optimism about the outlook for U.S. interest rates after a report showed US private sector job growth slowed by more than expected in the month of May. European markets were trading higher boosted by technology stocks as they hit a near 24-year high, while investors geared up for the European Central Bank's key interest rate decision later in the day.

The BSE Sensex is currently trading at 74779.65, up by 397.41 points or 0.53% after trading in a range of 74474.94 and 75297.73. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 2.03%, while Small cap index was up by 2.93%.

The top gaining sectoral indices on the BSE were Realty up by 4.11%, Industrials up by 3.48%, PSU up by 3.43%, Capital Goods up by 3.07% and Power was up by 2.76%, while FMCG down by 0.29% was the only losing index on BSE.

The top gainers on the Sensex were HCL Tech up by 4.00%, Tech Mahindra up by 3.58%, SBI up by 3.37%, Infosys up by 2.59% and NTPC up by 2.08%. On the flip side, Hindustan Unilever down by 2.52%, Mahindra & Mahindra down by 2.25%, Sun Pharma down by 1.74%, Asian Paints down by 1.59% and Nestle down by 1.52% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that non-ferrous metal prices have witnessed a strong recovery of around 13-17% during April-May 2024 over the corresponding period in the previous year. The three-month rolling forward contract is also trading higher than spot metal prices, suggesting prices will remain healthy in the coming 1-2 quarters. While the downside risks to metal prices, particularly in H2 FY2025, cannot be ruled out, the current uptrend in metal prices is likely to result in an around 8-9% growth in realisation for the full fiscal. 

According to the report, globally, a revival in manufacturing activities, primarily in the Chinese market, as demonstrated by expansion (>50) in the purchasing managers index (PMI) data in March and April 2024, along with easing global inflationary concerns has supported the overall sentiments. Chinese demand for non-ferrous metals remains healthy primarily in the renewables and electric vehicle (EV) segments, thus supporting the global demand and offsetting the subpar demand growth in the US and European markets to an extent. In the US, while the manufacturing PMI expanded in March 2024, it again slipped in contraction during April 2024. Manufacturing in Europe continues to remain weak for the past two years. Consequently, global demand (ex-China) is likely to remain subdued in CY2024.

On the supply side, it said the production of refined copper is expected to remain tight owing to expected supply cut by Chinese smelters amid decline in the smelter’s margins. In addition, the US and UK recently implemented new sanctions on Russian metals, including on aluminium and copper, thus increasing supply bottlenecks in the near term at least. Consequently, the current supply-demand dynamics remain supportive of firm metal prices in the near-term.

The report further stated that with input costs remaining largely under check along with healthy growth in realisation, the operating margins of domestic entities are estimated to remain strong at around 23% in FY2025 over around 17% in FY2024. The credit metrics are also expected to improve with a projected total Debt/OPBDITA of 1.8 times and an interest cover of 6.0 times in FY2025 over a total Debt/ OPBDITA of 2.0 times and an interest cover of 4.5 times in FY2024.   

The CNX Nifty is currently trading at 22744.20, up by 123.85 points or 0.55% after trading in a range of 22642.60 and 22910.15. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.89%, Shriram Finance up by 3.79%, Tech Mahindra up by 3.50%, SBI up by 3.41% and SBI Life up by 2.92%. On the flip side, Hindalco down by 2.75%, Hindustan Unilever down by 2.52%, Mahindra & Mahindra down by 2.15%, Hero MotoCorp down by 1.99% and Sun Pharma down by 1.76% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted added 417.82 points or 1.91% to 21,902.70, Nikkei 225 surged 213.34 points or 0.55% to 38,703.51, Hang Seng advanced 51.84 points or 0.28% to 18,476.80, Jakarta Composite gained 19.24 points or 0.28% to 6,966.91 and Straits Times was up by 6.04 points or 0.18% to 3,336.05. On the flip side, Shanghai Composite was down by 16.61 points or 0.54% to 3,048.79.

European markets were trading higher; UK’s FTSE 100 increased 21.13 points or 0.26% to 8,268.08, France’s CAC rose 30.19 points or 0.38% to 8,036.76 and Germany’s DAX was up by 155.75 points or 0.84% to 18,731.69.