Weakness persists over Dalal Street

A weakness persisted over the Dalal Street in late morning session, with both Sensex and Nifty falling half a percent each, impacted by selling at Auto and Healthcare counters, despite positive cues from other Asian markets. Investors were waiting for clarity on U.S. President Donald Trump's trade policies and also eagerly awaiting the outcome of Ukraine peace talks. Traders failed to get relief with reports that private sector output in India increased at the fastest pace in six months during February, amid a quicker expansion in services activity. The HSBC Flash India Composite Output Index was at 60.6 in February, up from a final reading of 57.7 in January.

On the global front, Asian markets were trading higher, after Japan's private sector logged the fastest growth in five months in February, underpinned by sustained growth in services activity. The flash survey data from S&P Global showed that the au Jibun Bank flash composite output index rose to 51.6 in February from 51.1 in the previous month. The index signaled the fastest growth in the private sector in five months.

The BSE Sensex is currently trading at 75357.19, down by 378.77 points or 0.50% after trading in a range of 75175.97 and 75748.72. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.70%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Metal up by 0.88%, Utilities up by 0.32%, Industrials up by 0.05% and Power up by 0.03%, while Auto down by 2.30%, Healthcare down by 1.32%, Consumer discretionary down by 1.02%, Oil & Gas down by 0.82% and Bankex down by 0.77% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.30%, NTPC up by 1.01%, Larsen & Toubro up by 0.51%, HCL Tech. up by 0.47% and Asian Paints up by 0.23%. On the flip side, Mahindra & Mahindra down by 5.45%, Adani Ports & SEZ down by 2.11%, Tata Motors down by 1.78%, Ultratech Cement down by 1.64% and Power Grid down by 1.58% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that major auto component firms are likely to invest Rs 15,000-20,000 crore in FY25 and another Rs 25,000-30,000 crore in FY26. It said the incremental investments would be made towards new products, product development for committed platforms and development of advanced technology and electric vehicle (EV) components, apart from capex for capacity enhancements and upcoming regulatory changes. 

The rating agency expects the revenue growth of the Indian auto component industry (represented by a sample of 46 auto ancillaries with aggregate annual revenues of over Rs 3 lakh crore in FY24) to ease to 7-9 per cent in the ongoing fiscal (FY25) and 8-10 per cent in the next financial year (FY26), from the highs of 14 per cent in FY24. It noted that demand from domestic Original Equipment Manufacturers (OEMs), which constitutes over half of the industry revenues, is estimated to grow by 7-9 per cent in FY25 and 8-10per cent in FY26. It added that part of the growth would stem from premiumisation of components and higher value addition.

The report said growth in replacement demand is pegged at 5-7 per cent in FY25 and 7-9 per cent in FY26, driven by an increase in vehicle parc, higher average age of vehicles/used car purchases, preventive maintenance and growth in organised spare parts, among other reasons. It said exports, which account for close to 30 per cent of the industry's revenues, are likely to be impacted by subdued vehicle registration growth in the target markets. However, it said factors like rising supplies to new platforms because of vendor diversification initiatives by global OEMs/Tier-I and higher value addition, partly stemming from an increase in outsourcing, augur well for Indian auto component suppliers.

The CNX Nifty is currently trading at 22798.75, down by 114.40 points or 0.50% after trading in a range of 22733.30 and 22921.00. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.06%, Shriram Finance up by 1.58%, Tata Steel up by 1.27%, NTPC up by 1.03% and Eicher Motors up by 1.00%. On the flip side, Mahindra & Mahindra down by 5.54%, Adani Ports & SEZ down by 2.10%, BPCL down by 2.05%, Tata Motors down by 1.80% and Dr. Reddy's Lab down by 1.79% were the top losers.

All Asian markets were trading higher; Hang Seng advanced 704.31 points or 3.03% to 23,281.29, Jakarta Composite gained 11.19 points or 0.16% to 6,799.23, Shanghai Composite strengthened 24.7 points or 0.73% to 3,375.48, Straits Times rose 4.82 points or 0.12% to 3,932.33, KOSPI increased 0.72 points or 0.03% to 2,654.78, Nikkei 225 surged 107.7 points or 0.28% to 38,785.74 and Taiwan Weighted added 242.79 points or 1.02% to 23,730.25.