Benchmarks trade flat in early noon session

Indian benchmarks traded mixed in early noon session, with Sensex gaining 2 points, while Nifty was down by 3 points. Selling in frontline blue chip stocks such as Infosys, Kotak Mahindra Bank, Sun Pharma and Asian Paints restricted the markets to go up. However, Telecom, Basic Materials and Utilities stocks were amongst the top gainers on the BSE sectoral space. Investors remained careful with SBI’s report stating that India's Gross Domestic Product (GDP) growth is likely to slow further in the July-September quarter of this financial year to below 5 per cent amid decline in consumption, weak investments and an under-performing service sector. Local equities continued to show sluggish trend with report that India has decided not to join the mega Regional Comprehensive Economic Partnership (RCEP) deal as negotiations failed to address the government’s concerns. Meanwhile, activity in India's dominant services industry contracted for a second consecutive month in October due to muted demand, according private business survey, driving business optimism to a near-three year low.

On the global front, Asian markets were trading in positive on account of developments surrounding hopes of a phase one trade deal between United States and China. As per reports, US is considering to remove some existing tariffs on imports of Chinese goods as a step to reach an initial deal with China that would resolve the ongoing trade war between these nations. Back home, in scrip specific developments, shares of Yes Bank edged up after ace investor Rakesh Jhunjhunwala bought a 0.5 per cent stake in the private sector lender for Rs 86 crore on November 04, 2019. However, Bharat Electronics slipped on reporting 41% fall in Q2 net profit.

The BSE Sensex is currently trading at 40304.65, up by 2.69 points or 0.01% after trading in a range of 40237.97 and 40466.55. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.11%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Telecom up by 1.23%, Basic Materials up by 0.50%, Utilities up by 0.40%, Power up by 0.39% and PSU was up by 0.39%, while Consumer Durables down by 0.79%, IT down by 0.71%, Energy down by 0.51%, Capital Goods down by 0.50% and TECK was down by 0.47% were the losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.48%, SBI up by 2.36%, Bharti Airtel up by 1.35%, Tata Motors up by 1.19% and Tata Motors - DVR was up by 1.18%. On the flip side, Infosys down by 1.19%, Kotak Mahindra Bank down by 0.85%, Sun Pharma down by 0.66%, Asian Paints down by 0.55% and Indusind Bank was down by 0.55% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said bank credit growth is likely to slow down sharply to 8-8.5 percent during current financial year (FY20) as compared to 13.3 percent in FY19, mainly due to decline in incremental credit in the first half of FY20. Moreover, it expects bond market to grow at a slower pace as they remain risk averse towards Non-Banking Financial Companies (NBFCs). It noted that the year-on-year growth in bond volumes is expected to moderate to 4 percent in FY20 from 12 percent in FY19. 

Additionally, the report said the recent changes in mutual funds regulations are likely to result in a decline in the volume of commercial paper (CP) outstanding by March 2020. Considering these three domestic sources of funding, that is bank credit, corporate bonds and CP outstanding, it expects year-on-year credit growth to decline to 6.2-6.8 percent in FY20 from 13.5 percent in the last financial year. It added that a shift of large borrowers such as a NBFCs and housing finance companies (HFCs) to the banking system for their funding requirements had boosted bank credit growth in FY19.

However, ICRA noted that factors such as muted economic growth, lower working capital requirements of various borrowers, along with risk aversion among lenders, have compressed incremental credit in first half of the current fiscal. It said incremental bank credit has fell by Rs 0.19 trillion during H1 FY20, in contrast to the rise of Rs 0.81 trillion during H1 FY18 and Rs 3.51 trillion during H1 FY19. It added that the recent data on bank credit released by the Reserve Bank of India (RBI) reveals that the contraction in incremental credit outstanding to the services as well as the industrial segments, offset the entire growth in credit to the retail segment during H1 FY20.

The CNX Nifty is currently trading at 11938.00, down by 3.30 points or 0.03% after trading in a range of 11917.95 and 11978.95. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.25%, UPL up by 3.07%, SBI up by 2.20%, Bharti Infratel up by 1.89% and Hindalco was up by 1.44%. On the flip side, Coal India down by 2.26%, Zee Entertainment down by 2.09%, Eicher Motors down by 1.51%, Infosys down by 1.20% and Titan Company was down by 1.20% were the top losers.

Asian markets were trading in green, Hang Seng increased 142.59 points or 0.52% to 27,689.89, Taiwan Weighted strengthened 87.18 points or 0.75% to 11,644.03, KOSPI rose 10.89 points or 0.51% to 2,141.13, Shanghai Composite gained 23.92 points or 0.8% to 2,999.41, Straits Times advanced 13.21 points or 0.41% to 3,249.61, Jakarta Composite soared 38.61 points or 0.62% to 6,218.95 and Nikkei 225 was up by 432.05 points or 1.89% to 23,282.82.