Domestic indices remain in red in late morning deals

Domestic equity markets remained in red in early afternoon session following a downturn in global markets. Selling in Asian Paints, NTPC, Adani Ports, Tata Steel and Ultratech Cement companies’ stocks dragged the markets down. Meanwhile, broader indices were largely underperformed their large peers with  BSE Mid cap index and Small cap index falling in the range of 1.15-1.40%. Rising crude oil prices weighed on the domestic sentiments. Traders ignored report that the Asian Development Bank (ADB) said India’s stronger-than-expected fiscal position could provide a further boost to its growth, while keeping the Gross Domestic Product (GDP) growth projection for the current financial year (FY25) unchanged at 7 per cent. On the BSE sectoral front, traders were seen pilling up positions in IT, TECK and FMCG, while selling was witnessed in Capital Goods, Power, Industrials, Consumer Durables and PSU. 

On the global front, Asian markets were trading mostly in red as chip-related stocks dropped following reports of more stringent export restrictions from the U.S. and as comments from former U.S. President Donald Trump raised geopolitical tensions. Back home, in the stock specific development, Asian Paints fell after it reported a weak set of numbers in the June quarter of financial year 2025 (Q1FY25). 

The BSE Sensex is currently trading at 80537.59, down by 178.96 points or 0.22% after trading in a range of 80390.37 and 80910.45. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.37%, while Small cap index down by 1.18%.

The top gaining sectoral indices on the BSE were IT up by 0.64%, TECK up by 0.60% and FMCG up by 0.44%, while Capital Goods down by 2.18%, Power down by 2.11%, Industrials down by 1.95%, Consumer Durables down by 1.71% and PSU down by 1.45% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.23%, Hindustan Unilever up by 1.11%, Bajaj Finserv up by 1.02%, Mahindra & Mahindra up by 1.02% and Infosys up by 0.53%. On the flip side, Asian Paints down by 1.76%, NTPC down by 1.46%, Adani Ports down by 1.42%, Tata Steel down by 1.41% and Ultratech Cement down by 1.29% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that a much-needed tariff hike and growing data consumption will lift the average revenue per user per month (ARPU) of Indian telecom companies (telcos) by around 25% in fiscal 2026 compared with fiscal 2024. The industry ARPU should dial up to a decadal high of Rs 225-230 by end of next fiscal (FY26) compared with Rs 182 last fiscal. That, along with moderation in capital expenditure (capex), on account of lower network investments after completion of 5G rollouts and limited spectrum renewals, will enhance return on capital employed (RoCE) and support deleveraging in the industry, thereby improving credit profiles. 

According to the report, the ARPU growth will be gradual over this fiscal and the next as the tariff hike becomes effective on the next recharge cycle for long-duration plans. It will improve operating profitability, which shall lift the industry RoCE to around 11% next fiscal from around 7.5% in fiscal 2024. The industry has seen a long period of supressed RoCEs, due to substantial investments made towards the rollout of each generation of technology and the associated spectrum liabilities. Capex intensity averaged at around 28% over the past three fiscals and is expected to come down to around 19% by next fiscal as most players have completed their 5G rollouts. While network capex for fiberisation of telecom towers, setting up of base transceiver stations and small cells for augmentation of networks is expected to continue, it will be at a slower pace. 

Similarly, the report said new spectrum capex is also likely to reduce as most of the spectrum purchase was completed in fiscal 20236 and next significant spectrum renewal will be due in 2030. This was visible in the recent auction held in June 2024 which saw bids for only Rs 11,341 crore, or around 12% of the total airwaves on offer. Nearly half of the amount spent was on spectrum renewals. It estimates do not factor in any further tariff hikes by telcos and any such move may provide an upside. In the road ahead, the ability of the industry to maintain its competitive landscape and higher-than-expected network capex by telcos will be monitorable.

The CNX Nifty is currently trading at 24545.10, down by 67.90 points or 0.28% after trading in a range of 24504.45 and 24678.90. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were LTIMindtree up by 2.14%, TCS up by 2.12%, ONGC up by 1.24%, Bajaj Finserv up by 1.15% and Hindustan Unilever up by 1.14%. On the flip side, Bajaj Auto down by 3.11%, Hero MotoCorp down by 2.81%, Coal India down by 1.99%, Asian Paints down by 1.90% and NTPC down by 1.55% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite weakened 3.6 points or 0.12% to 2,959.25, Straits Times fell 20.55 points or 0.59% to 3,469.02, KOSPI dropped 35.45 points or 1.26% to 2,807.84, Nikkei 225 slipped 762.22 points or 1.89% to 40,335.47 and Taiwan Weighted lost 545.3 points or 2.35% to 23,224.52. However, Hang Seng advanced 47.61 points or 0.27% to 17,787.02 and Jakarta Composite gained 88.21 points or 1.21% to 7,312.43.