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Benchmarks continue to trade higher in morning deals
May-02-2025

Indian equity benchmarks continued to trade higher in morning deals, led by gains in Oil & Gas, PSU and Energy stocks. Traders took support with the government data showing that the Gross Goods and Services Tax (GST) collection increased by 12 per cent in April, reaching to an all-time high of Rs 2.37 lakh crore. The total gross GST revenue was Rs 2.10 lakh crore in April of the current year. The data also showed an uptick of 10.7 per cent in GST revenue from the domestic transactions, reaching to about Rs 1.9 lakh crore. Some support also came with India Ratings and Research (Ind-Ra) stating that IMD's prediction of slightly above-than-normal monsoon in 2025 would push farm sector growth which along with monetary easing will help India withstand the adverse impact of reciprocal tariffs. Adding to the optimism, a labour ministry statement said retail inflation for farm workers eased to 3.73 per cent in March 2025, as compared to 4.05 per cent in February this year. For rural workers retail inflation eased to 3.86 per cent in March 2025, as against 4.10 per cent in February this year. On the global front, Asian markets are trading in green with sentiment aided by the prospect of easing global trade tensions after China said it is evaluating trade talks with the U.S. 

The BSE Sensex is currently trading at 80894.61, up by 652.37 points or 0.81% after trading in a range of 80235.36 and 81177.93. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.48%, PSU up by 1.20%, Energy up by 1.14%, IT up by 1.08% and Auto up by 1.08%, while Telecom down by 0.49% and Consumer Durables down by 0.30% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 5.30%, Maruti Suzuki up by 3.06%, Eternal up by 2.56%, Indusind Bank up by 2.06% and Tata Motors up by 1.72%. On the flip side, Nestle down by 1.64%, Bajaj Finserv down by 0.77%, Titan Company down by 0.62%, Hindustan Unilever down by 0.37% and Kotak Mahindra Bank down by 0.30% were the top losers.

Meanwhile, a domestic rating agency -- Crisil Ratings has said that the Reserve Bank of India’s rate cuts will lead to an up to 0.20 per cent slip in return on assets (RoA), a key profitability indicator, for banks in FY26. It said the RoA will contract by 0.10-0.20 per cent to 1.1-1.2 per cent in FY26 from an over-two-decade high of 1.3 per cent in FY25. Compression in the net interest margin (NIM) by a similar level will be the key driver for the slip in RoA, the agency said, explaining that in a falling interest environment, interest rates on loans are expected to reduce faster than those on deposits.  

Apart from NIMs, the agency said, credit costs also have a bearing on the profitability front, and these costs have bottomed out after a secular decline for many years. Additionally, the other income and operating expenses are also seen as flat. Hence, compression in NIM will directly translate to moderation in RoA after accounting for the tax impact. It stated the extent of reduction in NIMs will, therefore, depend on the ability of banks to manage their deposit costs. But given the competition for deposits seen of late, that ability will be curtailed.

Its director Subha Sri Narayanan said ‘Of the loan assets, 45 per cent are linked to an external benchmark, primarily repo. Typically, these are repriced rapidly after rate cuts. On the other hand, any reduction in term deposit (TD) rates will apply only to incremental deposits and renewals, resulting in a slower transmission of the reduction to the liability side.’

The CNX Nifty is currently trading at 24520.70, up by 186.50 points or 0.77% after trading in a range of 24305.85 and 24589.15. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 5.80%, Maruti Suzuki up by 3.21%, Hindalco up by 2.83%, Eternal up by 2.68% and Indusind Bank up by 2.11%. On the flip side, Eicher Motors down by 2.21%, Nestle down by 1.63%, Bajaj Auto down by 0.94%, JSW Steel down by 0.84% and Bajaj Finserv down by 0.56% were the top losers. 

Asian markets are trading in green; Nikkei 225 surged 418.93 points or 1.15% to 36,871.23, Taiwan Weighted added 463.42 points or 2.29% to 20,698.45, Hang Seng advanced 374.55 points or 1.67% to 22,493.96, KOSPI increased 5.21 points or 0.2% to 2,561.82, Straits Times rose 11.21 points or 0.29% to 3,843.72 and Jakarta Composite gained 22.69 points or 0.33% to 6,789.49.
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