Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, amid negative signals from other Asian markets. Traders were worried as foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 453.77 crore on Monday, exchange data showed. However, downfall remain capped with private report stating that The Reserve Bank's rate setting panel is likely to opt for slowing down the pace of hikes and increase the repo rate by 0.25 per cent in September. The central bank has already hiked the repo rate by 1.40 per cent in three consecutive actions since May this year, in response to the uncomfortably high inflation which has been consistently breaching upper end of the tolerance band set by the government to the RBI. On the global front, Asian markets were trading mostly lower as traders were worried that the Federal Reserve will continue to ramp up interest rates to fight inflation.

The BSE Sensex is currently trading at 58646.24, down by 127.63 points or 0.22% after trading in a range of 58172.48 and 59068.25. There were 17 stocks advancing against 11 stocks declining, while 2 stocks remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.25%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Metal up by 1.46%, Telecom up by 1.12%, Auto up by 0.93%, PSU up by 0.69% and Capital Goods was up by 0.68%, while IT down by 2.12%, Power down by 1.86%, Utilities down by 1.72%, TECK down by 1.67% and Oil & Gas was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.80%, Bajaj Finserv up by 2.58%, Bharti Airtel up by 1.74%, Tata Steel up by 1.48% and Sun Pharma was up by 1.46%. On the flip side, Infosys down by 2.39%, Tech Mahindra down by 2.19%, TCS down by 2.06%, HCL Tech down by 1.87% and Wipro was down by 1.43% were the top losers.

Meanwhile, ICRA Ratings in its latest report has said that the issuance of Additional Tier-1 (AT-1) bonds by banks is likely to more than halve to Rs 20,000 crore this fiscal (FY23) compared to the all-time high amount of Rs 42,800 crore raised in FY22. AT-1 bonds are those debt instruments without a terminal maturity date. In FY22, a majority of the funds raised through the instrument were to refinance bond issues done in FY17.

According to the report, majority of the bonds have a call option in the fifth year, resulting in the significant jump in new issuances which are basically for refinancing the earlier obligations. The issuances in FY17 stood at Rs 32,100 crore for the state-owned banks and Rs 10,900 crore for private sector lenders. In FY18, the amounts stood at Rs 10,900 crore and Rs 23,500 crore, respectively.

The report further said lenders have already refinanced the FY18 bonds because of the lower interest rates in FY22. Lenders have already raised Rs 5,320 crore from the instrument in the first four months of FY23. As the net of new offerings and redemptions between April and July 2022, the AT-1 bonds outstanding as on July 31 was Rs 1.02 lakh crore and is expected to touch Rs 1.1 lakh crore by March 31, 2023.

The CNX Nifty is currently trading at 17464.20, down by 26.50 points or 0.15% after trading in a range of 17345.20 and 17588.55. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.78%, Bajaj Finserv up by 2.54%, Grasim Industries up by 2.01%, Hindalco up by 1.82% and Bharti Airtel up by 1.70%. On the flip side, Adani Ports &Special down by 2.61%, Infosys down by 2.41%, Tech Mahindra down by 2.25%, TCS down by 2.10% and HCL Tech. down by 1.89% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 205.01 points or 1.04% to 19,451.97, Nikkei 225 slipped 341.75 points or 1.19% to 28,452.75, KOSPI fell 27.16 points or 1.1% to 2,435.34, Taiwan Weighted dropped 149.25 points or 0.98% to 15,095.89, Shanghai Composite declined 1.38 points or 0.04% to 3,276.41 and Straits Times was down by 33.96 points or 1.04% to 3,228.61.

On the flip side, Jakarta Composite was up by 52.69 points or 0.74% to 7,160.67.