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Firm trade continues over Dalal Street
Jan-07-2025

A firm trade continued over the Dalal Street in early afternoon session, with both Sensex and Nifty holding notable gains, on the back of heavy buying at Oil & Gas and Energy counters, amid positive cues from other Asian markets. Sentiments were positive amid a private report stating that the Centre is expected to release the next instalment of special assistance to states even if they have not met capital expenditure targets. In July 2024, the Centre increased the budgetary allocation under the programme to Rs 1.5 lakh crore, a significant rise from Rs 1.05 lakh crore in the previous fiscal.

On the global front, Asian markets are trading mostly in green, even as the monetary base in Japan was down 1.0 percent on year in December, coming in at 658.524 trillion yen. That missed expectations for an annual decline of 0.2 percent following the downwardly revised 0.3 percent contraction in November (originally -0.1 percent). Banknotes in circulation were down 0.6 percent, while coins in circulation fell 1.4 percent and current account balances slumped 1.2 percent - including a2.2 percent increase in reserve balances.

Back home, steel industry stocks were in focus, as Ministry of Steel has launched the second round of Production Linked Incentive (PLI) scheme for Specialty Steel, termed as PLI Scheme 1.1 on January 6, 2025, for five product categories which is the same as the existing PLI Scheme to enable further participation as industry participants requested the ministry for relaxation. PLI Scheme 1.1 will remain open from January 6 to January 31, 2025. 

The BSE Sensex is currently trading at 78245.93, up by 280.94 points or 0.36% after trading in a range of 77925.09 and 78452.74. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.82%, while Small cap index was up by 1.42%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.69%, Energy up by 1.50%, Healthcare up by 1.32%, Basic Materials up by 1.23% and Industrials up by 1.16%, while TECK down by 0.44% and IT down by 0.41% were the only losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.25%, Tata Motors up by 2.13%, Reliance Industries up by 1.82%, Titan up by 1.67% and ICICI Bank up by 1.63%. On the flip side, Zomato down by 3.17%, TCS down by 1.78%, HCL Tech. down by 1.47%, Tech Mahindra down by 1.31% and Infosys down by 0.35% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that the Model Code of Conduct in Q1 FY25 and an elongated monsoon period, along with milestone-based billing (against monthly billing till March 2024) in Q2 FY25 impacted construction activity (primarily for road players). This is reflected in the modest revenue growth of around 1.5% in year-on-year (YoY) terms in H1 FY25 for ICRA's sample set of 19 companies (with combined turnover of Rs 1.28 trillion in FY24). 

ICRA expects the execution pace of Indian Construction entities to pick up in H2 FY25 and operating income (OI) to grow on a YoY basis by 8-10% in FY25e and 10-12% in FY26e, though easing from the long-term CAGR of around 15% for the FY18-FY24 period. Previously, in FY23 and FY24, the construction entities had witnessed stellar YoY growth of 22% and 19%, Respectively.

The competition has remained high across sub-segments like railways, road as well as urban infrastructure in recent years. Particularly, road projects awarded by the MoRTH/NHAI have witnessed greater competitive pressure, which is also reflected in the majority of the bids awarded at a sizeable discount compared to the authority’s base price. The competition for other sectors (Metro, Railways, and Water Supply & Sanitation) has also increased, with new entrants trying to diversify their order book. Owing to the heightened competition, the operating margins of the industry moderated from 12% during FY2022 to 11.1% in FY2024, and ICRA projects them to remain range-bound around 10.5% - 11.0% in FY2025e and FY2026e. 

The CNX Nifty is currently trading at 23731.35, up by 115.30 points or 0.49% after trading in a range of 23637.80 and 23795.20. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.74%, Tata Consumer Products up by 2.43%, Indusind Bank up by 2.19%, Tata Motors up by 2.05% and SBI Life Insurance up by 1.89%. On the flip side, TCS down by 1.88%, HCL Tech. down by 1.55%, Tech Mahindra down by 1.36%, Eicher Motors down by 1.33% and BPCL down by 1.05% were the top losers.

Asian markets are trading mostly in green; Jakarta Composite gained 7.78 points or 0.11% to 7,088.25, Shanghai Composite strengthened 22.02 points or 0.68% to 3,228.94, Straits Times rose 3.44 points or 0.09% to 3,825.28, KOSPI increased 3.46 points or 0.14% to 2,492.10, Nikkei 225 surged 776.25 points or 1.94% to 40,083.30 and Taiwan Weighted added 103.56 points or 0.44% to 23,651.27, while Hang Seng declined 349.86 points or 1.81% to 19,338.43.
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