Benchmarks trade lower in early deals on Thursday

Snapping their seven days winning streak, Indian equity benchmarks have made a negative start and are trading slightly in the red as investors opted to book some of their profit off the table after recent rallies. However, losses remained capped as some support came in from positive comments of World Bank chief, who has expressed confidence that with the Narendra Modi-led Government at the Centre, India’s ranking in ‘Doing Business’ can improve significantly. The Bank also said it would lend India $15-18 billion over the next three years.

On the global front, the US markets made a mixed closing in last session amid lingering concerns about the ongoing conflicts in Ukraine and Gaza. Though earnings remained in focus and tech heavy Nasdaq ended in green on notable advance in shares of Apple. The Asian markets were trading mostly in the red at this point of time, after a Chinese manufacturing gauge rose to its strongest reading in 18 months.

Back home, on the sectoral front, metal, fast moving consumer goods and public sector undertaking witnessed the maximum gains in trade, while Oil & Gas, capital goods and healthcare remained the top losers on the BSE sectoral space. The broader indices too were trading cautiously, while the market breadth on the BSE was positive; there were 926 shares on the gaining side against 885 shares on the losing side while 74 shares remain unchanged.

The BSE Sensex opened at 26188.50; around 41 point lower compared to its previous closing of 26147.33, and has touched a high and a low of 26190.81 and 26077.70 respectively. The index is currently trading at 26117.38, down by 29.95 points or 0.11%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a positive start with 49.12% stocks advancing against 49.12% declines. The broader indices were trading in the green; the BSE Mid cap index was down by 0.13%, while Small cap index was up by 0.11%. 

The top gaining sectoral indices on the BSE were Metal up by 0.67%, FMCG up by 0.45%, PSU up by 0.23%, IT up by 0.20% and TECk up by 0.08%, while Oil and Gas down by 0.65%, Capital Goods down by 0.62%, Healthcare down by 0.35%, Consumer Durables down by 0.29% and Auto down by 0.28%, were the major losers on the sectoral index.

The top gainers on the Sensex were Hindalco up by 1.79%, Tata Steel up by 1.27%, HUL up by 1.10%, Tata Power up by 0.78% and Wipro up by 0.67%. On the flip side, Gail India was down by 1.64%, Dr Reddys was down by 0.90%, L&T was down by 0.82%, Tata Motors was down by 0.78% and RIL was down by 0.62% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) has relaxed Rs 1-lakh ceiling on loans for non-agricultural purposes against gold jewellery. Borrowers can now pledge their gold and get a higher value of loans, provided that the loan-to-value (LTV) ratio does not exceed 75% of the cost of the gold.

The RBI’s notification highlighted that banks, as per their board-approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses. The central bank further notified that the LTV of 75% should be maintained throughout the tenure of the loan and computed against the total outstanding in the account including accrued interest and current value of gold jewellery accepted as security/collateral.

The move is likely to monetize the household gold holdings in India by encouraging people to bring out their gold holdings. It will also protect the interest of the customers who can continue to opt for gold loans based on merits of the player rather than purely based on LTV ratios. Furthermore, this initiative may help commercial banks increase their retail secured lending portfolio.

Earlier, in December, RBI had stipulated a ceiling of Rs 1 lakh and a bullet repayment of loans clause which means payment of both the interest and the principal at one time.

The CNX Nifty opened at 7,796.25; about 1 point lower as compared to its previous closing of 7,795.75, and has touched a high and a low of 7,802.45 and 7,771.65 respectively. The index is currently trading at 7,781.25, down by 14.50 points or 0.19%. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Bank of Baroda up by 2.18%, Hindalco up by 1.50%, Tata Steel up by 1.47%, HCL Tech up by 1.42% and PNB up by 0.83%. On the flip side, Cairn down by 4.50%, Gail India down by 1.64%, Dr Reddys down by 0.95%, Tata Motors down by 0.89% and Sun Pharma down by 0.78% were the major losers on the index.

Asian markets were trading mostly in the green; Hang Seng spurted by 93.42 points or 0.39% to 24,065.29, Straits Times gained 5.15 points or 0.15% to 3,345.85, Jakarta Composite increased by 9.10 points or 0.18% to 5,102.33, Shanghai Composite soared 17.36 points or 0.84% to 2,095.85 and FTSE Bursa Malaysia KLCI was up by 0.14 points or 0.01% to 1,871.97.

On the flip side, Nikkei 225 tumbled by 35.28 points or 0.23% to 15,293.28, KOSPI Index declined 3.78 points or 0.19% to 2,024.54 and Taiwan Weighted was marginally in red by 0.42 points or 0.00% to 9,498.94.