Sudden fall appears in Indian markets during noon deals

Indian equity markets witnessed a sharp fall in early afternoon deals, with both Sensex and Nifty trading near their neutral lines, amid mixed cues from other Asian markets, as caution prevailed ahead of the release of key U.S. jobs report and Fed Chair Jerome Powell's remarks this week. Sentiments were dampened, as Commerce and Industry Minister Piyush Goyal said that the long voyage time due to ships taking longer routes through Cape of Good Hope has impacted global trade, including Indian exports. This has resulted in increased time for goods to reach international markets. Besides, India’s services activity slowed to 58.4 in November compared with 58.5 in the previous month, as total sales rose at a softer pace and prices rose faster owing to building cost pressures.

On the global front, Asian markets were trading mixed, after the services sector in China continued to expand in November, albeit at a slower pace, with a services PMI score of 51.5. That's down from 52.0 in October, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Services activity growth slowed in line with the trend for new business.

The BSE Sensex is currently trading at 80919.99, up by 74.24 points or 0.09% after trading in a range of 80630.53 and 81245.39. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged by 0.55%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 0.92%, Capital Goods up by 0.60%, Consumer Durables up by 0.58%, Bankex up by 0.54% and IT up by 0.49%, while Telecom down by 0.92%, Auto down by 0.66%, Utilities down by 0.58%, Metal down by 0.51% and Energy down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.59%, HDFC Bank up by 1.40%, NTPC up by 1.05%, Titan up by 0.94% and Bajaj Finserv up by 0.74%. On the flip side, Power Grid down by 2.20%, Bharti Airtel down by 1.88%, Tata Motors down by 1.61%, Adani Ports & SEZ down by 1.34% and Tata Steel down by 1.30% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that domestic air passenger traffic is projected to rise 7-10 per cent to 164-170 million in the current fiscal year (FY25), while the aviation industry's loss is pegged at Rs 2,000-3,000 crore during the same period. In the first half of 2024-25, it said domestic air passenger traffic stood at 79.3 million, marking a 5.3 per cent annual growth that was partly impacted by the severe heat wave and other weather-related disruptions. The international passenger traffic growth for Indian carriers increased and stood at 16.2 per cent in the first half of the current financial year. ICRA maintained a 'stable' outlook on the Indian aviation industry, amidst continued growth in domestic and international air passenger traffic. 

According to the report, the industry is expected to report a net loss of Rs 20-30 billion in FY2025 and FY2026 each, significantly lower than the losses witnessed in the past supported by improved pricing power of the airlines. The spread between revenue per available seat kilometre and cost per available seat kilometre saw some moderation in H1 FY2025 over FY2024 due to higher fuel prices and overall increased costs amid grounding of aircraft, while yields moderated marginally as airlines strove to maintain adequate passenger load factors. Nonetheless, the same is expected to pick up in H2 FY2025, amid healthy passenger traffic.

The report said airlines' cost structure is typically driven by two key components -- Aviation Turbine Fuel (ATF) prices and the INR-USD movement. On a year-on-year basis, it said average ATF prices eased by 6.8 per cent to Rs 96,192/KL in the first eight months of FY2025, though exceeding the levels seen during pre-Covid period (first eight months of FY2020) of Rs 65,261/KL. Fuel costs account for around 30 to 40 per cent of an airline's costs, while about 35-50 per cent of the operating expenses, including aircraft lease payments, fuel expenses and a significant portion of aircraft and engine maintenance expenses are denominated in dollar terms. 

The CNX Nifty is currently trading at 24448.90, down by 8.25 points or 0.03% after trading in a range of 24366.30 and 24573.20. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 2.34%, TCS up by 1.60%, SBI Life Insurance up by 1.60%, HDFC Bank up by 1.43% and Apollo Hospital up by 1.38%. On the flip side, Power Grid down by 2.29%, Bharti Airtel down by 2.14%, Bajaj Auto down by 1.92%, Tata Motors down by 1.67% and Cipla down by 1.61% were the top losers.

Asian markets were trading mixed; Jakarta Composite gained 107.5 points or 1.47% to 7,303.52, Straits Times rose 21.59 points or 0.57% to 3,807.72, Nikkei 225 surged 27.53 points or 0.07% to 39,276.39 and Taiwan Weighted added 227.87 points or 0.98% to 23,255.33, while Shanghai Composite weakened 23.76 points or 0.7% to 3,355.05, KOSPI dropped 36.10 points or 1.47% to 2,464.00 and Hang Seng declined 39.22 points or 0.2% to 19,707.10.