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Indices fail to hold recovery in early noon deals
Oct-04-2024

Indian equity benchmarks failed to hold recovery in early afternoon deals, with both Sensex and Nifty witnessing a sharp fall, despite positive cues from other Asian markets. Traders watched oil price movements closely after crude prices rallied about 5 percent in the overnight U.S. trading session amid signs of an escalating conflict between Iran and Israel. U.S. President Joe Biden said the U.S. was discussing whether to support potential Israeli strikes against Iranian oil facilities. Adding some worries, India’s services sector activity eased in the month of September, as new business, international sales and output all rose at the slowest rates since late-2023. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index fell to 57.7 in September from 60.9 in August. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also eased to 58.3 in September as against 60.7 in August.

On the global front, Asian markets were trading mostly in green, even as Hong Kong's retail sales value continued to decrease sharply in August. The preliminary data from the Census and Statistics Department showed that the value of retail sales fell 10.1 percent year-on-year in August, following an 11.7 percent slump in July. Sales have been falling since March. Meanwhile, online sales, which accounted for 8.0 percent of the total sales value in August, dropped slightly by 0.5 percent from last year versus a 0.8 percent increase in the previous month. 

The BSE Sensex is currently trading at 82363.80, down by 133.30 points or 0.16% after trading in a range of 82051.86 and 83368.32. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.17%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were IT up by 0.98%, TECK up by 0.62%, Healthcare up by 0.53%, Metal up by 0.14% and Bankex up by 0.12%, while Realty down by 1.15%, FMCG down by 0.90%, Utilities down by 0.62%, Oil & Gas down by 0.55% and Power down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.89%, Tech Mahindra up by 1.52%, Tata Motors up by 1.33%, Sun Pharma up by 1.16% and JSW Steel up by 1.06%. On the flip side, Bajaj Finance down by 1.70%, Nestle down by 1.51%, Asian Paints down by 1.40%, Mahindra & Mahindra down by 1.31% and Hindustan Unilever down by 1.30% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that increasing contribution from the digital segment will help media players print around 8% annual revenue growth to Rs 60,000 crore by fiscal 2027 (FY27). This will follow the compounded annual growth rate (CAGR) of around 5% over the past five fiscals to reach around Rs 47,000 crore in fiscal 2024. The revenue growth, along with focus on rationalising costs, will expand operating margins by around 500 basis points (bps) to around 18% by fiscal 2027. 

A CRISIL Ratings analysis of 20 companies, accounting for around 55% of the media industry’s revenue, indicates as much. Media companies have seen a slower annual growth of 5% between fiscals 2019-24 following shift in consumer preferences to digital mode. While increasing number of smartphone users, rising internet penetration, high affordability of data in India ($0.2 per 1 GB of mobile data) and adoption of 5G fuelled this trend, media companies were slow to adapt. However, this is likely to change now.

The report said driven by growth in digital segment, overall revenue of these players will grow around 8% annually over fiscals 2025-2027. It will also be supported by increasing ad revenue in traditional print and publication streams in sync with the growth in domestic retail demand in sectors like fast-moving consumer goods, automobiles (where new launches take centre stage), education services, online shopping and real estate. All’s not well for the digital segment though. It has been a drag on profitability of media companies on account of high initial expenditure for manpower, content creation and marketing as companies pushed for identifying customers and markets for their products. Plus, competition has limited improvement in margins given that consumers have plenty of free alternatives for content.

The CNX Nifty is currently trading at 25203.10, down by 47.00 points or 0.19% after trading in a range of 25094.55 and 25485.05. There were 22 stocks advancing against 27 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Infosys up by 1.91%, Tata Motors up by 1.40%, Tech Mahindra up by 1.40%, ONGC up by 1.34% and Sun Pharma up by 1.27%. On the flip side, BPCL down by 1.91%, Hero MotoCorp down by 1.87%, Bajaj Finance down by 1.69%, Shriram Finance down by 1.50% and Nestle down by 1.46% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 448.49 points or 1.99% to 22,562.00, Straits Times rose 0.86 points or 0.02% to 3,578.29, KOSPI increased 8.02 points or 0.31% to 2,569.71 and Nikkei 225 surged 83.56 points or 0.22% to 38,635.62, while Jakarta Composite plunged 45.31 points or 0.6% to 7,498.52 and Taiwan Weighted lost 87.68 points or 0.39% to 22,302.71.
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