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Weak trade persists over Dalal Street
Apr-26-2024

A weak trade continued over the Dalal Street with both Sensex and Nifty trading lower, on the back of selling at Telecom and Banking counters despite positive cues from other Asian markets. Sentiments were downbeat as the World Bank said that interest rates could remain higher than expected in 2024 and 2025 as global commodity prices level off. Traders were cautious amid reports that India's central bank plans to soon change guidelines to permit banks to temporarily freeze accounts suspected of being used to commit cyber-crimes, as it battles a rising wave of online crime.

On the global front, Asian markets were trading mostly in green, even after Singapore's industrial production declined at the fastest pace in seven months in March. The data from the Economic Development Board revealed that industrial production declined 9.2 percent year-on-year in March, reversing 4.4 percent growth in February. The expected fall was 1.5 percent. Further, this was the steepest drop since August 2023, when production had risen 12.9 percent.

Back home, telecom industry stocks were in watch, as telecom industry body Cellular Operators Association of India (COAI) has renewed its demand for revenue share between telcos and large traffic generator apps and also expressed a need of additional fund for telecom operators to upgrade infrastructure to meet the increasing demand for bandwidth.

The BSE Sensex is currently trading at 74083.04, down by 256.40 points or 0.34% after trading in a range of 74067.38 and 74515.91. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.74%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.54%, IT up by 0.99%, PSU up by 0.54%, Healthcare up by 0.51% and TECK up by 0.50%, while Telecom down by 0.21%, Bankex down by 0.14%, Auto down by 0.09% and Capital Goods down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 8.32%, Wipro up by 2.23%, HCL Tech. up by 1.04%, Ultratech Cement up by 0.93% and Axis Bank up by 0.75%.

On the flip side, Bajaj Finance down by 7.72%, Bajaj Finserv down by 3.76%, Nestle down by 2.51%, Mahindra & Mahindra down by 1.60% and Indusind Bank down by 1.31% were the top losers.

Meanwhile, taking into consideration robust industrial activity, strong Gross domestic product (GDP) growth and the Indian Meteorological Department's (IMD) forecast of above-normal temperatures during the summer months, Fitch Ratings is anticipating power demand in India to rise by 7-8 per cent year-on-year in second quarter (Q2) of 2024. However, it considers much of this demand will be met through larger operating capacities, adequate coal inventory, and higher utilization of gas-based plants. It said India's monthly power demand typically peaks in the pre-and post-monsoon months of May or August, as cooling demand picks up with the temperature rise. IMD has predicted higher-than-normal maximum temperatures over most parts of the country till June 2024, further increasing demand. 

At the same time, the rating agency has forecasted that distribution utilities to work towards minimizing supply disruptions due to India's general elections in April and May, given that power supply is a politically sensitive issue. On the supply side, the Indian Ministry of Power has directed both gas-based and imported-coal-based power stations to maintain availability to meet the anticipated demand. Utilisation of gas-based plants has been low in the past due to higher fuel prices or lack of availability of fuel.

Fitch stated that India has experienced strong growth in power demand, averaging 8.5 per cent a year over the last three years after the Covid-19 pandemic. It has met a large part of the increase through thermal power plants' higher plant load factors (PLFs), which have jumped by around 10 per cent to around 69.5 per cent over the last two years. Strong power demand bodes well for additions of renewable capacities and associated storage demand as India aims to meet ambitious long-term energy-transition goals.

The CNX Nifty is currently trading at 22495.40, down by 74.95 points or 0.33% after trading in a range of 22492.70 and 22620.40. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 7.97%, Divi's Lab up by 3.69%, LTIMindtree up by 3.26%, Wipro up by 2.29% and Bajaj Auto up by 2.12%. On the flip side, Bajaj Finance down by 7.74%, Shriram Finance down by 3.76%, Bajaj Finserv down by 3.69%, Nestle down by 2.45% and Apollo Hospital down by 1.90% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 382.96 points or 2.17% to 17,667.50, Taiwan Weighted added 263.09 points or 1.31% to 20,120.51, Shanghai Composite strengthened 35.74 points or 1.16% to 3,088.64, KOSPI increased 27.71 points or 1.04% to 2,656.33 and Nikkei 225 surged 306.28 points or 0.81% to 37,934.76, while Jakarta Composite plunged 55.39 points or 0.78% to 7,099.90 and Straits Times fell 3 points or 0.09% to 3,284.75.
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