Sensex, Nifty at day’s low; metal stocks lose shine

Falling over a percent, the equity benchmarks continued their sluggish trade in late afternoon session to hit day’s low amid concerns that the government’s plan for a stimulus to halt an economic slowdown may have a negative impact on the fiscal deficit. Besides, a fall in the global markets after the US Federal Reserve’s FOMC meet, along with geopolitical tensions on the North Korean front, also contributed to the losses. Adding pessimism, Finance Minister Arun Jaitley said that stressed bank assets have become a concern for the economy. He further said that bad loans have crimped the ability of Indian lenders to offer new credit. Sentiments remained under pressure with the report that the Organisation for Economic Co-operation and Development trimmed India’s growth forecast for the current financial year, citing the temporary impact of the rollout of the goods and services tax and demonetisation, expecting the economy to expand at a slower pace than China.

On the global front, European markets were trading mixed as traders spooked by the latest aggression from North Korea, which threatened to test a nuclear bomb in the Pacific Ocean. Asian markets were trading in red. Back home, in scrip specific development, JHS Svendgaard was trading in green after the company established a two year tie-up with one of the prominent FMCG multinational client, for supply of Oral Care Products in the Gulf Countries (GCC) and shall commence the commercial supplies from October 2017.

The BSE Sensex is currently trading at 31941.44, down by 428.60 points or 1.32% after trading in a range of 31936.02 and 32342.81. There were 1 stocks advancing against 30 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.41%, while Small cap index was down by 2.51%.

The top losing sectoral indices on the BSE were Metal down by 3.80%, Realty down by 3.52%, Capital Goods down by 3.24%, Basic Materials down by 3.21% and Industrials down by 2.49%., while there were no gaining sectoral indices on the BSE.

The top gainer on the Sensex was Wipro up by 0.77%. On the flip side, Tata Steel down by 3.86%, Larsen & Toubro down by 3.47%, ICICI Bank down by 2.98%, SBI down by 2.61% and Hero MotoCorp down by 2.59% were the top losers.

Meanwhile, credit rating agency, ICRA in its latest report has said that with ability to successfully leverage technology for deposit mobilisation, the private banks can take more space in the banking sector advances in the future. According to the report Private Banks’ advances market share may increase to 38 to 40 per cent by 2019-20 from 19.9 per cent as on March 31, 2014 and 27.5 per cent during the preceding financial year (FY17).

The growth is considered based on the capital constraints of public sector banks and assuming an incremental market share of 80 percent for private sector banks and a credit growth of 7-9 percent for the entire banking sector during the current financial year and in 2019-20.

The report found improvement in the private sector banks’ deposits share which has increased to 23.5 percent as on June 30, 2017 from 19 percent as on June 30, 2014. ICRA further said that despite challenges like increasing competitive intensity and difficulty in growth balance due to the buoyant debt capital markets, the private sector banks have performed well and capitalised on the opportunities by delivering a credit growth at 3-year CAGR of 17.8 percent as against 2.5 percent for public sector banks and with relatively better asset quality.

The report noted that in order to grow advances with an estimate of 38-40 percent by 2019-2020, the banks need to mobilise the requisite quantum of deposits and for this, ICRA said that leveraging technology will be a key driver of growth.

The CNX Nifty is currently trading at 9975.40, down by 146.50 points or 1.45% after trading in a range of 9969.05 and 10095.05. There were 4 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 1.96%, Bharti Infratel up by 0.71%, Wipro up by 0.45% and ITC up by 0.04%. On the flip side, Hindalco down by 5.32%, Vedanta down by 4.36%, Yes Bank down by 4.10%, Ultratech Cement down by 3.96% and Tata Steel down by 3.89% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 229.8 points or 0.82% to 27,880.53, Taiwan Weighted decreased 128.76 points or 1.22% to 10,449.68, Nikkei 225 decreased 51.03 points or 0.25% to 20,296.45, KOSPI Index decreased 17.79 points or 0.74% to 2,388.71 and Shanghai Composite decreased 5.28 points or 0.16% to 3,352.53. On the flip side, Jakarta Composite increased 17.33 points or 0.29% to 5,923.91.

European markets were trading mixed; Germany’s DAX increased 8.42 points or 0.07% to 12,608.45 and France’s CAC increased 14.94 points or 0.28% to 5,282.23. On the flip side, UK’s FTSE 100 decreased 6.02 points or 0.08% to 7,257.88.