Markets trade flat in early deals on Monday

Indian equity markets have made cautious start and are trading flat in early deals on Monday amid mixed cues from other Asian markets. Traders were cautious after renewed military strikes between the U.S. and Iran over the weekend reignited concerns over crude supplies from the Middle East. Traders remained on sidelines ahead of the release of India's Index of Industrial Production (IIP) data for May later in the day.  On the BSE sectoral front, traders were seen piling up positions in Healthcare, Consumer Durables, Metal, FMCG and Consumer Disc, while selling was witnessed in Capital Goods, Telecom, Power, Oil & Gas and IT. 

On the global front, Asian markets were trading mixed following negative cues from the US markets on Friday. In the stock specific development, Puravankara rose as the company entered into a joint development agreement (JDA) for a 6.4-acre land parcel in Sarjapur, Bengaluru, with an estimated Gross Development Value (GDV) of Rs 1,000 crore.    

The BSE Sensex is currently trading at 77031.63, down by 68.84 points or 0.09% after trading in a range of 76853.93 and 77228.23. There were 15 stocks advancing against 15 stocks declining on the index.

The top gaining sectoral indices on the BSE were Healthcare up by 1.10%, Consumer Durables up by 0.55%, Metal up by 0.32%, FMCG up by 0.32% and Consumer Disc up by 0.07%, while Capital Goods down by 1.00%, Telecom down by 0.99%, Power down by 0.82%, Oil & Gas down by 0.76% and IT down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were Eternal up by 1.68%, Trent up by 1.57%, Sun Pharma up by 1.37%, Asian Paints up by 1.22% and Tech Mahindra up by 0.64%. On the flip side, Kotak Mahindra Bank down by 2.52%, Mahindra & Mahindra down by 1.45%, Interglobe Aviation down by 1.19%, HCL Technologies down by 1.08% and Adani Ports down by 0.95% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the profitability impact of the recent West Asia conflict on India Inc is expected to be far lower than initially projected if the US-Iran ceasefire remains intact and energy supplies continue to normalise. It now expects the conflict to shave around 100 basis points off India Inc's operating margins in fiscal 2027, compared with an earlier projection of 200 basis points under a prolonged conflict scenario involving disruptions to shipping through the Strait of Hormuz.

The improved outlook follows a sharp fall in crude oil prices after the reopening of the Strait of Hormuz under a fragile US-Iran memorandum of understanding. However, Crisil cautioned that geopolitical risks remain elevated and gas supplies may take longer to stabilise. It said under the revised scenario, only 10 sectors are expected to witness a meaningful decline in profitability, compared with 22 sectors under the agency's earlier stress-case assumptions, with no sector likely to face a severe hit to revenues or earnings. 

The report said sectors expected to remain under pressure include airlines, ceramics, flexible packaging, specialty chemicals, polyester textiles and diamond polishing due to higher input costs, weaker pricing power and supply-chain disruptions. Crisil assigned a moderately negative credit outlook to these six sectors, citing weaker profitability, higher working capital requirements and moderate balance-sheet strength.

It further added that lower crude prices, improving gas availability, continued government infrastructure spending and resilient domestic demand should support revenue growth across industries. It also said policy measures, including the government's Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, which provides an additional Rs 2.55 lakh crore in guaranteed credit, including Rs 5,000 crore for airlines, would help vulnerable MSMEs meet higher funding needs.

The CNX Nifty is currently trading at 24060.10, up by 4.10 points or 0.02% after trading in a range of 24005.45 and 24110.75. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's up by 4.11%, Max Healthcare up by 2.16%, Eternal up by 2.06%, Trent up by 1.73% and Asian Paints up by 1.58%. On the flip side, Kotak Mahindra Bank down by 2.57%, Adani Enterprises down by 2.10%, Mahindra & Mahindra down by 1.38%, Interglobe Aviation down by 1.26% and HCL Technologies down by 0.98% were the top losers.

Asian markets were trading mixed; Taiwan Weighted added 476.91 points or 1.07% to 45,048.67, Shanghai Composite strengthened 6.82 points or 0.17% to 4,034.08, Hang Seng advanced 448.14 points or 1.94% to 23,120.00 and Straits Times rose 8.76 points or 0.17% to 5,200.49. However, Nikkei 225 slipped 450.88 points or 0.65% to 68,910.00, Jakarta Composite plunged 44.18 points or 0.75% to 5,851.95 and KOSPI dropped 113.69 points or 1.35% to 8,297.52.