Markets continue cutting of gains in late morning session

Indian equity benchmarks continued cutting of gains in late morning session but managed to remain in green terrain, on the back of positive cues from other Asian markets. Gains got cut in the markets, as Reserve Bank of India (RBI) Governor Shaktikanta Das cautioned depositors to be careful while chasing high returns as it comes with greater risk. Traders got cautious, amid reports that the government is unlikely to announce capital infusion for public sector banks (PSBs) in the upcoming Budget, as their financial health has improved on the back of a reduction in bad loans.

On the global front, Asian markets were trading higher, after the value of core machine orders in Japan was up a seasonally adjusted 3.8 percent on month in October, the Cabinet Office said on Monday - coming in at 879.8 billion yen. That beat expectations for an increase of 2.1 percent following the flat reading in September.

The BSE Sensex is currently trading at 58898.26, up by 111.59 points or 0.19% after trading in a range of 58885.87 and 59203.37. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index was up by 0.85%.

The top gaining sectoral indices on the BSE were Metal up by 1.28%, Power up by 1.11%, Realty up by 1.05%, Consumer Durables up by 1.04% and Bankex up by 1.03%, while Energy down by 0.98%, FMCG down by 0.16% and Oil & Gas down by 0.09% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.03%, Tech Mahindra up by 2.87%, Power Grid up by 1.92%, Maruti Suzuki up by 1.48% and NTPC up by 1.19%. On the flip side, Bajaj Finance down by 2.23%, Reliance Industries down by 1.50%, Nestle down by 1.22%, Bajaj Finserv down by 0.99% and Mahindra & Mahindra down by 0.88% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has cautioned depositors to be careful while chasing high returns as it comes with greater risk. Observing that depositors themselves also need to be very discerning, he said it is important to keep in mind that higher returns or higher interest rates are usually associated with higher risks. However, he said there are institutions that are offering higher interest and are still viable but depositors should always be very careful.

Das said the Reserve Bank remains committed to ensuring that the banking system remains robust and resilient but it has to be a joint effort. He said ‘every stakeholder whether it is the management of banks, whether it is the board of banks, whether it is the various committees of banks, the audit committee, the risk management committee, or any other regulatory authority that is associated, it has to be a joint responsibility for all of us.’

RBI Governor stressed that the payment of the deposit insurance amount should be seen as a measure of last resort. He noted that the RBI has been adopting a proactive strategy to strengthen the regulatory guidelines to strengthen the supervisory methods and to look at things which will ensure that going forward the banks function in a very resilient manner.

The CNX Nifty is currently trading at 17551.90, up by 40.60 points or 0.23% after trading in a range of 17547.40 and 17639.50. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.97%, Tech Mahindra up by 2.85%, Hindalco up by 2.70%, SBI Life Insurance up by 2.00% and Power Grid up by 1.92%. On the flip side, Bajaj Finance down by 2.21%, Reliance Industries down by 1.50%, Nestle down by 1.14%, Bajaj Finserv down by 0.97% and Mahindra & Mahindra down by 0.88% were the top losers.

Asian markets were trading higher; Hang Seng increased 242.41 points or 1.01% to 24,238.13, Shanghai Composite gained 36.53 points or 1% to 3,702.88, KOSPI rose 8.50 points or 0.28% to 3,018.73, Straits Times advanced 7.32 points or 0.23% to 3,142.93, Jakarta Composite soared 21.74 points or 0.33% to 6,674.66, Taiwan Weighted strengthened 30.96 points or 0.17% to 17,857.22 and Nikkei 225 surged 244.24 points or 0.86% to 28,682.01.