Benchmarks continue to trade flat in morning deals

Indian equity benchmarks continued to trade flat in morning deals, amid profit-taking in line with weak trends in Asian peers. Traders are awaiting Nvidia Corp.’s results for cues on the growth momentum of artificial-intelligence related stocks and a key U.S. inflation reading. However, traders took support with Indian Ambassador to Oman Amit Narang’s statement that discussions for the proposed free trade agreement (FTA) between India and Oman are at an advanced stage and both sides hope to conclude the pact early. He said the pact, officially known as the Comprehensive Economic Partnership Agreement (CEPA), will give a significant push to bilateral trade and investment ties between the two countries. Also, the pact is expected to boost Indian exports to the west Asian country by eliminating duties, especially on petroleum products, textiles, electronics, pharmaceuticals, machinery, and iron and steel. Meanwhile, Finance Minister Nirmala Sitharaman has said that the GST council next month will discuss rationalisation of tax rates but a final decision on tweaking taxes and slabs will be taken later. She also said that compensation cess on luxury and sin goods are also going to be discussed and can come up in the September 9 meeting or later. 

The BSE Sensex is currently trading at 81673.83, down by 37.93 points or 0.05% after trading in a range of 81578.32 and 81840.57. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.07%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were IT up by 0.83%, TECK up by 0.72%, Telecom up by 0.72%, Utilities up by 0.27% and Power up by 0.26%, while Realty down by 0.50%, Metal down by 0.36%, FMCG down by 0.31%, Bankex down by 0.28% and Basic Materials down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.35%, Infosys up by 0.97%, Mahindra & Mahindra up by 0.94%, Tech Mahindra up by 0.81% and Power Grid Corporation up by 0.61%. On the flip side, Bajaj Finserv down by 0.96%, Asian Paints down by 0.89%, Tata Steel down by 0.74%, Maruti Suzuki down by 0.69% and Nestle down by 0.62% were the top losers.

Meanwhile, Rating agency Crisil has said that revenue growth of road engineering, procurement and construction (EPC) companies is expected to moderate to 5-7 per cent next fiscal, as lower national highway awarding weighs on their order books. That said, the credit profiles of these companies will remain stable, supported by steady operating profitability and strong balance sheet.

It said this slowdown is attributed to procedural issues linked to the approval of cost estimates of projects and restrictions under model code of conduct before elections, transition-linked issues as the government explores build-operate-transfer (BOT) toll model for future projects in addition to its currently dominant modes of EPC and the hybrid annuity model (HAM). However, it said there would be some respite as prices of key raw materials - steel and bitumen -are down 5-17 per cent from their peaks in fiscal 2023.

Crisil Ratings senior director Manish Gupta said the revenue growth will be impacted this fiscal and the next - after a compound annual growth rate of 13 per cent over the past five years. Ministry of Road Transport and Highways (MoRTH) awarded an average of 12,500 km projects between fiscals 2022 and 2023, but the number dropped to 8,581 km last fiscal and is seen modest at 8,000 km this fiscal.

The CNX Nifty is currently trading at 25010.35, down by 7.40 points or 0.03% after trading in a range of 24964.65 and 25048.15. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were LTIMindtree up by 5.82%, Wipro up by 1.64%, Indusind Bank up by 1.42%, BPCL up by 1.05% and Infosys up by 0.96%. On the flip side, Hero MotoCorp down by 1.32%, Asian Paints down by 0.99%, Adani Enterprises down by 0.84%, Britannia Industries down by 0.79% and Bajaj Finserv down by 0.78% were the top losers.

Asian markets are trading mostly in red; Shanghai Composite weakened 6.25 points or 0.22% to 2,842.48, Straits Times fell 7.29 points or 0.21% to 3,391.18, KOSPI dropped 9.50 points or 0.35% to 2,679.75, Nikkei 225 slipped 30.21 points or 0.08% to 38,258.41 and Hang Seng declined 173.74 points or 0.98% to 17,700.93.

On the flip side, Jakarta Composite gained 32.69 points or 0.43% to 7,630.57 and Taiwan Weighted added 149.95 points or 0.68% to 22,334.95.