Key gauges extend losses in morning deals

Indian equity benchmarks extended losses in morning deals, amid the emergence of profit-taking. Traders took a note of report that a recent decision by the US and China to suspend their tariff hikes for 90 days presents both challenges and opportunities for India. It said the two countries have reached an agreement to significantly reduce most of their recent tariffs or import duties for 90 days, as they are in talks to resolve their trade disputes. Traders overlooked exchange data that showed Foreign Institutional Investors (FIIs) bought equities worth Rs 1,246.48 crore on Monday after a day's breather. Sector-wise, airline stocks remained in watch as the ratings agency Crisil stated that capital expenditure (capex) of small private airports is expected to rise 50-60 per cent annually over the next three years, driven by capacity expansion on account of a substantial increase in terminal utilisation levels. On the global front, Asian markets were trading mostly in green as investors heaved a sigh of relief after a temporary halt in the trade war between the US and China eased worries of a global recession.

The BSE Sensex is currently trading at 81560.93, down by 868.97 points or 1.05% after trading in a range of 81336.04 and 82572.81. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.48%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.42%, Industrials up by 1.03%, Capital Goods up by 0.77%, PSU up by 0.63% and Consumer Durables up by 0.39%, while TECK down by 1.39%, IT down by 1.29%, Bankex down by 0.71%, Realty down by 0.58% and FMCG down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 0.55%, Tech Mahindra up by 0.46%, Sun Pharma up by 0.42% and SBI up by 0.37%. On the flip side, Infosys down by 2.67%, Eternal down by 2.31%, Power Grid Corporation down by 2.18%, HCL Technologies down by 2.02% and Kotak Mahindra Bank down by 1.85% were the top losers.

Meanwhile, the rating agency Crisil has said that capital expenditure (capex) of small private airports is expected to rise 50-60 per cent annually over the next three years, driven by capacity expansion on account of a substantial increase in terminal utilisation levels, while the capex at large private airports will see a decline during the same period, as much of the capacity expansion has been completed or nearing completion. However, the rating agency expects the overall capex of private airports to slightly slow down by 10-15 per cent to around Rs 40,000 crore over the next three years.

Crisil has said that the small private airports are expected to embark on a significant expansion of up to 1.5 times their current base by fiscal 2028 in response to escalating travel demand and moderate capacity on the ground. It added that, while the strong demand leading to recovery of air traffic movement has yielded a remarkable compound annual growth rate of around 45 per cent in passenger traffic at small private airports between fiscals 2022 and 2025, the capacity growth at these airports has been relatively sluggish, with a modest CAGR of around 20 per cent over this period, resulting in terminal utilisation levels increasing from around 60-90 per cent and a need to build additional capacity. In contrast, the greenfield airports of large airports are set to become operational this fiscal year, with minimal capital expenditure required going forward, as a result in the medium term, most capital expenditure will be allocated towards maintenance refurbishing equipment, upgrading amenities and developing infrastructure rather than expanding capacity. It also noted that their strategic locations in or near tier-1 cities minimise the off-take risk, enabling a smooth ramp-up of passenger and cargo volumes.

It also noted that while capex intensity for small private airports will rise to over 2 times, project risk will be manageable since these are expansions of existing sole airports in their respective cities. Further, their sponsors' expertise in operating large private airports and their strong fundraising capabilities also mitigate some of the risks. Meanwhile, it added that a slowing of capex of large airports will provide an opportunity to further sweat out their capacities, with traffic growth rising to around 30 per cent CAGR over the last three fiscal years. Further, it suggested that an established regulatory tariff framework that provides a pass-through of capex costs with reasonable returns remains conducive for the sector.

The CNX Nifty is currently trading at 24695.25, down by 229.45 points or 0.92% after trading in a range of 24634.90 and 24973.80. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 3.41%, Dr. Reddy's Lab up by 2.42%, JIO Financial Services up by 1.52%, Cipla up by 1.02% and Apollo Hospital up by 1.01%. On the flip side, Infosys down by 2.66%, Hindalco down by 2.20%, Eternal down by 2.07%, Power Grid Corporation down by 2.07% and HCL Technologies down by 1.91% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 633.57 points or 1.68% to 38,277.83, Taiwan Weighted added 228.84 points or 1.08% to 21,358.38, Straits Times rose 18.5 points or 0.48% to 3,894.66 and Shanghai Composite strengthened 2.62 points or 0.08% to 3,371.86.

On the flip side, Hang Seng declined 392.57 points or 1.7% to 23,156.89 and KOSPI dropped 4.02 points or 0.15% to 2,603.31.