Firm trade continues over the Dalal Street in early noon deals

A firm trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading notably higher, aided by heavy buying at Capital Goods and Industrials counters, despite negative cues from other Asian markets. Sentiments remained optimistic, as Industry body Confederation of Indian Industry said continuity in policy reforms under the leadership of Prime Minister Narendra Modi is likely to drive India towards the goal of becoming a developed nation. Besides, a private report stated that the new coalition government is likely to stick to its medium fiscal consolidation roadmap, but with a tilt towards populism in its first budget post the elections.

On the global front, Asian markets were trading mostly in red, after South Korea had a current account deficit of $0.29 billion in April, following the $6.93 billion surplus in March. The goods account saw a $5.11 billion surplus as exports increased annually by 18.0 percent to $58.17 billion and as imports increased by 9.0 percent to $53.06 billion, both compared to one year earlier. The services account posted a $1.66 billion deficit owing to deficits in the manufacturing services and travel accounts.

The BSE Sensex is currently trading at 76664.72, up by 174.64 points or 0.23% after trading in a range of 76296.44 and 76766.59. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped by 1.02%, while Small cap index was up by 1.07%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.87%, Industrials up by 1.68%, Realty up by 1.38%, Telecom up by 1.21% and Oil & Gas up by 1.19%, while Bankex down by 0.04% was the only losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.22%, Tata Steel up by 1.61%, Tata Motors up by 1.13%, HCL Tech. up by 1.09% and Tech Mahindra up by 1.06%. On the flip side, Asian Paints down by 0.96%, Kotak Mahindra Bank down by 0.94%, ITC down by 0.53%, JSW Steel down by 0.40% and Reliance Industries down by 0.31% were the top losers.

Meanwhile, rating agency CRISIL in its latest report has said that asset reconstruction companies (ARCs) are set to see an increase in the cumulative recovery rate for stressed residential real estate projects by 500-700 bps to 16-18% as on March 31, 2025 from 11% as on March 31, 2024. It noted that this will be driven by improved viability of stressed projects due to healthy demand and price appreciation seen in residential real estate and greater investor and promoter interest in reviving such projects. 

An analysis of the CRISIL Ratings security receipts (SRs) portfolio, comprising around 70 stressed real estate projects (saleable area of around 66 million square feet or mn sq ft) with outstanding SRs of around Rs 9,000 crore, indicates as much. Healthy economic growth and buoyant residential demand across housing segments in the top six cities will lead to 10-12% growth in residential realty demand this fiscal. Low unsold inventories across major micro markets will also help ARCs turn around stressed real estate projects faster with support from promoters or external investors. About three-fourths of the projects analysed turned into non-performing assets (NPA) between 2019 and 2022 and were impacted by falling sales and slower collections during the Covid-19 pandemic. The remaining are pre-2019 NPA projects that faced liquidity issues due to weak demand.

The report further said the amendments in the Insolvency and Bankruptcy Board of India (IBBI) regulations specific to real estate sector made in February 2024 are likely to fast track resolution of stressed real estate projects through Insolvency and Bankruptcy Code (IBC) for ARCs in the medium term. These amendments enable resolution of individual projects by delinking them from the entire corporate entity involving multiple projects and group inter-linkages. These amendments were essential, considering the slow pace of admission and resolution of cases under IBC observed in the past. Only 8% of the admitted cases have been resolved under IBC and debt worth around Rs 40,000 crore was stuck across 100 ongoing realty cases for more than 2.65 years.

The CNX Nifty is currently trading at 23331.95, up by 72.75 points or 0.31% after trading in a range of 23206.65 and 23348.00. There were 34 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were ONGC up by 4.15%, Larsen & Toubro up by 2.19%, Adani Ports & SEZ up by 1.93%, Britannia up by 1.48% and Hero MotoCorp up by 1.45%. On the flip side, Asian Paints down by 1.01%, Dr. Reddy's Lab down by 0.98%, Kotak Mahindra Bank down by 0.86%, ITC down by 0.57% and Eicher Motors down by 0.55% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 165.28 points or 0.91% to 18,201.67, Jakarta Composite plunged 12.58 points or 0.18% to 6,908.97, Shanghai Composite weakened 21.6 points or 0.71% to 3,029.68, Straits Times fell 15.24 points or 0.46% to 3,306.84 and Taiwan Weighted lost 66.26 points or 0.3% to 21,792.12, while KOSPI increased 4.15 points or 0.15% to 2,705.32 and Nikkei 225 surged 96.63 points or 0.25% to 39,134.79.