Indices trade lower with cut of around quarter percent

Indian equity markets were trading lower with cut of around quarter a percent in late morning deals on account of selling in Eternal, HDFC Bank, Mahindra & Mahindra, Maruti Suzuki and Hindustan Unilever companies’ stocks. Depreciation in Indian rupee against dollar weighed down sentiments. Rupee weakened by 8 paise to 85.50 against the dollar at the Inter-bank Foreign Exchange market on account of increased demand for the American currency from importers and banks. Besides, the recent surge in the US Treasury yields has heightened concerns over US’ fiscal and monetary trajectory, pushing borrowing costs higher and denting investors’ sentiment. On the BSE sectoral front, traders were seen pilling up positions in Metal, Energy, IT, Realty and Oil & Gas, while selling was witnessed in Telecom, Auto, Consumer Disc, Bankex and Capital Goods.

On the global front, Asian markets were trading mostly in green as China cut its key lending rates by 10 basis points in a move to boost its economy, at a time when trade tensions threaten to derail growth. The People’s Bank of China trimmed the 1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%. Back home, in the stock specific development, Borosil rallied after it reported a two-fold increase in its net profit for the fourth quarter of the previous financial year (Q4FY25).

The BSE Sensex is currently trading at 81844.37, down by 215.05 points or 0.26% after trading in a range of 81804.36 and 82250.42. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.43%, while Small cap index up by 0.08%.

The top gaining sectoral indices on the BSE were Metal up by 0.97%, Energy up by 0.67%, IT up by 0.65%, Realty up by 0.60% and Oil & Gas up by 0.47%, while Telecom down by 0.80%, Auto down by 0.64%, Consumer Disc down by 0.46%, Bankex down by 0.46% and Capital Goods down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.33%, Infosys up by 1.02%, ITC up by 0.92%, NTPC up by 0.90% and Indusind Bank up by 0.70%. On the flip side, Eternal down by 2.67%, HDFC Bank down by 1.05%, Mahindra & Mahindra down by 0.99%, Maruti Suzuki down by 0.93% and Hindustan Unilever down by 0.54% were the top losers.

Meanwhile, the rating agency ICRA has revised the outlook on the telecom tower industry to stable from negative, following healthy collections from customers along with receipt of overdue payments. It noted that the industry was earlier facing headwinds owing to elongated receivables, on account of delays in payments by some of the telecom service providers, however, the situation has improved materially with consistent timely payments to the tower companies resulting in reduction of receivable days to around 45-60 days, which is lower than the ICRA’s negative outlook threshold of 80 days.

ICRA, while revising its outlook, has indicated that the improvement in receivable days coupled with recovery of the past over dues has enhanced the liquidity profile of the telecom tower industry and moderated the reliance on external debt, which is likely to translate into improvement in the return metrics of the industry. It added that improvement in the credit profile of some key telecom service providers, who are the customers for tower companies, has eased the working capital cycle of tower companies. Further, there has been clearance of a sizable amount of past overdues, which has resulted in reversal of provisions made earlier in FY2023.

It noted that with improvement in the credit quality of some of the customers and fund raise exercise concluded by a few of them, these customers are expected to re-initiate their capex plans. It further highlighted that demand for telecom services, especially data, is witnessing very strong growth in India, translating into consistent network expansion and upgradation by the telcos, which is keeping the demand for tower companies buoyant resulting in consistent addition in the tenancies. ICRA expects the tower industry to report an operating income growth of 4-6% with operating margins (adjusting for energy revenues) at around 70-75% for FY2026. These along with easing of the working capital requirements is likely to boost the liquidity position with the cash balances of the industry increasing to around Rs 5,500-6,000 crore, from Rs 2,200-3,000 crore levels in the past.

The CNX Nifty is currently trading at 24890.55, down by 54.90 points or 0.22% after trading in a range of 24863.40 and 25010.35. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.39%, ONGC up by 1.93%, Tata Steel up by 1.26%, Dr. Reddy's Lab up by 1.03% and NTPC up by 0.88%. On the flip side, Eternal down by 3.00%, Hero MotoCorp down by 1.79%, HDFC Bank down by 1.12%, Cipla down by 1.11% and Mahindra & Mahindra down by 1.08% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 302.82 points or 1.28% to 23,635.54, Jakarta Composite gained 30.54 points or 0.43% to 7,171.63, Shanghai Composite strengthened 16.89 points or 0.5% to 3,384.47, Straits Times rose 8.1 points or 0.21% to 3,884.30, Nikkei 225 surged 26.8 points or 0.07% to 37,525.43 and Taiwan Weighted added 2.2 points or 0.01% to 21,526.03. However, KOSPI dropped 0.17 points or 0.01% to 2,603.25.