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Benchmarks trade in green in morning deals
Apr-25-2024

Indian equity benchmarks erased initial losses and were trading in green in morning deals, led by gains in PSU, Industrials and Capital Goods stocks. Traders took some support with the Comprehensive Economic Partnership Agreement (CEPA) Council Director Ahmed Aljneibi’s statement that the trade between India and UAE increased 15 per cent since the implementation of the free trade agreement in May 2022 and the both are on track to surpass the target of $100 billion in non-oil trade by 2030. On the sectoral front, IT sector stocks remained in focus as Crisil Ratings stated that the Indian IT services sector is staring at a second consecutive year of muted revenue growth due to modest increase in tech spends in Europe and the US. It expects the sector to grow at 5-7 per cent in FY25, after a growth of 6 per cent estimated to have been achieved in FY24. On the global front, Asian markets are trading mostly in red as investors turned cautious after the past three days' sizeable gains, with Meta's warning that it will spend far more than expected this year fuelling worries that the latest tech-led rally may have gone too far.

The BSE Sensex is currently trading at 74022.14, up by 169.20 points or 0.23% after trading in a range of 73556.15 and 74126.79. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.08%, while Small cap index up by 0.39%.

The top gaining sectoral indices on the BSE were PSU up by 0.73%, Industrials up by 0.66%, Capital Goods up by 0.58%, TECK up by 0.44% and IT up by 0.40%, while Realty down by 0.94%, Consumer Durables down by 0.43%, Consumer Disc down by 0.08%, Bankex down by 0.08% and Metal down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.66%, Sun Pharma up by 1.64%, HCL Technologies up by 1.64%, ICICI Bank up by 1.33% and SBI up by 1.27%. On the flip side, Kotak Mahindra Bank down by 9.73%, Hindustan Unilever down by 1.58%, Bajaj Finance down by 1.39%, Maruti Suzuki down by 1.04% and Asian Paints down by 0.78% were the top losers.

Meanwhile, Crisil Ratings has said that the Indian IT services sector is staring at a second consecutive year of muted revenue growth due to modest increase in tech spends in Europe and the US. It expects the sector to grow at 5-7 per cent in FY25, after a growth of 6 per cent estimated to have been achieved in FY24. The overall industry size is pegged at $250 billion and it creates over 50 lakh direct jobs.

The industry is, however, expected to sustain in the key metric of profitability, as the operating profit margins will be stable at 22-23 per cent, the agency said, attributing it to prudent management of employee costs. It said the sectoral revenues achieved a compounded annual growth rate of 12 per cent for the decade through FY24.

It stated high interest rates and economic slowdown in client markets led to a modest single-digit growth in tech spends by companies in the banking, financial services and insurance (BFSI), retail, technology and communications sectors in FY24. It said these four sectors account for nearly two-thirds of the industry's revenues.

Aditya Jhaver, director at Crisil said ‘The slowdown in technology spend will continue this fiscal, weighing on the revenue growth of IT service providers.’ Jhaver said revenue from BFSI and retail segments will continue to be a drag with subdued growth of 4-5 per cent in FY25.

The CNX Nifty is currently trading at 22446.10, up by 43.70 points or 0.20% after trading in a range of 22305.25 and 22475.55. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.00%, HCL Technologies up by 1.67%, Sun Pharma up by 1.64%, Grasim Industries up by 1.48% and ICICI Bank up by 1.34%. On the flip side, Kotak Mahindra Bank down by 9.74%, Tata Consumer Product down by 2.10%, Hindustan Unilever down by 1.67%, LTIMindtree down by 1.58% and Bajaj Finance down by 1.52% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 768.11 points or 2% to 37,691.97, Taiwan Weighted lost 261.7 points or 1.3% to 19,870.04, Straits Times fell 9.89 points or 0.3% to 3,283.24, KOSPI dropped 35.15 points or 1.31% to 2,640.60 and Jakarta Composite plunged 26.65 points or 0.37% to 7,147.88.

On the flip side, Shanghai Composite strengthened 5.08 points or 0.17% to 3,049.90 and Hang Seng advanced 94.66 points or 0.55% to 17,295.93.
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