Markets trade near neutral lines in late afternoon session

In a volatile trading session, Indian equity markets traded near neutral lines with negative bias in late afternoon session. Traders were cautious ahead of macro data. HSBC Manufacturing PMI Final scheduled to be released on August 01. Besides, Fed Interest Rate decision due on Wednesday. Investors took note of report that credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has predicted that the recent surge in container freight rates by 4x (YoY basis), if sustained, could affect the business operations, EBITDA margins and working capital of exporters during FY25. On the global front, all Asian markets were trading higher ahead to the release of mega-cap U.S. tech earnings and central bank policy meetings in the United States, Japan and U.K. European markets were trading mostly in green with energy stocks surging amidst fears of a widening conflict in the Middle East.

The BSE Sensex is currently trading at 81243.91, down by 88.81 points or 0.11% after trading in a range of 81135.91 and 81908.43. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.70%, while Small cap index was up by 1.04%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.55%, Industrials up by 2.14%, Realty up by 1.67%, PSU up by 1.47% and Oil & Gas was up by 1.19%, while Consumer Durables down by 0.90%, TECK down by 0.72%, Telecom down by 0.65%, IT down by 0.52% and FMCG was down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.71%, Ultratech Cement up by 1.52%, Bajaj Finserv up by 1.26%, Mahindra & Mahindra up by 0.79% and Indusind Bank up by 0.62%. On the flip side, Titan Company down by 2.95%, Bharti Airtel down by 2.00%, ITC down by 1.55%, Tech Mahindra down by 1.42% and Kotak Mahindra Bank down by 1.09% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has predicted that the recent surge in container freight rates by 4x (YoY basis), if sustained, could affect the business operations, EBITDA margins and working capital of exporters during FY25.

According to the report, while freight rates corrected significantly through 2023 and first 9M24 after the surge witnessed during 2022 post COVID amid supply chain bottlenecks, the correction in freight and forwarding cost of Indian corporates was lower than that for international freight and forwarding cost and is likely to inch up in FY25. The report further noted that the working capital cycle, which had peaked during the pandemic and thereafter a mean reversion, is showing signs of lengthening in FY25.

Besides, Ind-Ra stated that while this surge could be temporary, given the advancing of Chinese exports given the impending US duty protections coming into force from October 1, 2024 and re-stocking of products for Christmas, it does reflect a broader issue of container shortages given the longer routes being taken to avoid the Red Sea channel.

The CNX Nifty is currently trading at 24824.40, down by 10.45 points or 0.04% after trading in a range of 24774.60 and 24999.75. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.69%, Divi's Lab up by 2.62%, Larsen & Toubro up by 2.53%, Ultratech Cement up by 1.58% and Bajaj Finserv up by 1.32%. On the flip side, Titan Co down by 2.91%, Bharti Airtel down by 2.01%, Cipla down by 1.57%, Tata Consumer down by 1.49% and ITC down by 1.42% were the top losers.

All Asian markets were trading higher; Nikkei 225 surged 801.22 points or 2.08% to 38,468.63, Hang Seng advanced 217.03 points or 1.26% to 17,238.34, Taiwan Weighted added 45.28 points or 0.2% to 22,164.49, KOSPI increased 33.63 points or 1.22% to 2,765.53, Straits Times rose 23.68 points or 0.69% to 3,450.15, Jakarta Composite gained 4.88 points or 0.07% to 7,293.05 and Shanghai Composite was up by 0.95 points or 0.03% to 2,891.85.

European markets were trading mostly in green; UK’s FTSE 100 increased 62.81 points or 0.76% to 8,348.52 and Germany’s DAX was up by 14.29 points or 0.08% to 18,431.84. On the flip side, France’s CAC was down by 25.62 points or 0.34% to 7,492.06.