Benchmarks trade marginally higher in late morning deals

Indian equity benchmarks erased initial losses and managed to keep their heads above water in late morning deals, led by gains in FMCG, Energy and Industrials stocks. Traders took some support with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that India is at the threshold of a major structural shift in its growth trajectory. He added that India is moving ahead towards 8 per cent GDP growth in a sustained manner, adding that the average growth India recorded in the last three years is 8.3 per cent. Traders also took a note of Reserve Bank of India’s data stated that India’s financial position with the rest of the world improved over the year. The country increased its overseas assets more than it increased its foreign liabilities, largely due to a rise in reserve assets. During the financial year 2023-24, the net claims of non-residents on India decreased by $5.5 billion. This happened because India’s external financial assets grew by $109.8 billion, which was more than the increase in its external financial liabilities, which grew by $104.3 billion. On the global front, Asian markets are trading mostly in green following a tech-led bounce on Wall Street as investors prepare for the release of crucial US inflation data. 

The BSE Sensex is currently trading at 78138.49, up by 84.97 points or 0.11% after trading in a range of 77945.94 and 78189.93. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.02%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were FMCG up by 0.52%, Energy up by 0.45%, Industrials up by 0.37%, Basic Materials up by 0.27% and Capital Goods up by 0.23%, while Metal down by 1.32%, Realty down by 0.64%, Auto down by 0.36%, Consumer Discretionary down by 0.26% and Bankex down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 3.46%, Reliance Industries up by 1.33%, Hindustan Unilever up by 1.02%, Kotak Mahindra Bank up by 0.85% and Maruti Suzuki up by 0.79%. On the flip side, Tata Steel down by 1.88%, Mahindra & Mahindra down by 1.60%, HDFC Bank down by 0.70%, Axis Bank down by 0.65% and Titan Company down by 0.55% were the top losers.

Meanwhile, CRISIL Ratings in its latest report has said that the revenue of private defence companies is set to grow by 20 per cent during the current financial year 2024-25. It stated that the revenue of the 25 private aerospace and defence companies will surge by 20 per cent to approximately Rs 13,500 crore during the current fiscal year. The surge is propelled by higher government spending and concerted efforts by the government to encourage private participation in the defence sector.

It highlighted that the operating margin of private defence companies is likely to rise by 50-60 basis points on sustained revenue growth, economies of scale, and better fixed cost absorption, and should remain stable over the medium term, aided by price escalation clauses in contracts. India’s defence sector is generally dominated by the public sector; however, the revenue share of private players has been on the rise recently. The liberalisation of defence equipment manufacturing by the government and increasing transparency in bidding guidelines have helped private entities secure more orders in domestic and overseas markets, enhanced development and production capabilities of these players have also aided growth over the years.

Jayashree Nandakumar, Director, CRISIL Ratings, said ‘The order books of aerospace and defence companies rated by CRISIL have swelled over the past few fiscals on the back of strong government impetus, including the Atmanirbhar Bharat initiative, the Defence Acquisition Policy, and the Defence Production and Export Promotion Strategy, which favour indigenisation and exports. Order book to operating income is expected to improve to around 4.5 times in fiscal 2025 to approx. Rs 50,000-51,000 crore, from 3.5 times in fiscal 2023, driving revenue growth.’

The CNX Nifty is currently trading at 23743.85, up by 22.55 points or 0.10% after trading in a range of 23670.45 and 23751.00. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 3.50%, Shriram Finance up by 1.92%, Reliance Industries up by 1.37%, HDFC Life Insurance up by 1.17% and Hindustan Unilever up by 1.10%. On the flip side, Tata Steel down by 1.80%, Bajaj Auto down by 1.73%, Hindalco down by 1.69%, Mahindra & Mahindra down by 1.55% and Apollo Hospital down by 1.52% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 70.78 points or 0.39% to 18,143.68, Jakarta Composite gained 42.97 points or 0.62% to 6,925.67, Shanghai Composite strengthened 6.18 points or 0.21% to 2,956.18, KOSPI increased 15.54 points or 0.56% to 2,789.93, Nikkei 225 surged 535.3 points or 1.37% to 39,708.45 and Taiwan Weighted added 73.74 points or 0.32% to 22,949.71.

On the flip side, Straits Times fell 1.64 points or 0.05% to 3,324.64.