Benchmarks maintain gaining movement amid strength across global markets

Benchmarks continued to maintain their gaining movement in late morning deals as market participants indulged in enlarging positions amid strength across global markets as a two-day policy meeting of the Federal Reserve gets underway later today. Meanwhile, the broader indices on the BSE too were trading higher. The sentiments were supported by Indian rupee appreciating 16 paise to 79.65 against the dollar at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. Sentiments also remained upbeat as foreign institutional investors (FIIs) have net bought shares worth Rs 312.31 crore on September 19, as per provisional data available on the NSE. On the BSE sectoral front, all the sectoral indices on the BSE were trading in green led by auto, consumer durables, metal, telecom and realty.

On the global front, Asian markets were trading higher following the positive cues from US markets overnight, with traders remaining cautiously optimistic as they believe the heavy selling in recent sessions has been overdone. Back home, stock specific development, Advanced Enzyme Technologies surged over 13 percent on the BSE after Nalanda India Equity Fund increased its stake by nearly 3 per cent stake in the company.

The BSE Sensex is currently trading at 59861.73, up by 720.50 points or 1.22% after trading in a range of 59556.91 and 59967.40. There were 30 stocks advancing on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.84%, while Small cap index up by 1.42%.

The gaining sectoral indices on the BSE were Auto up by 2.00%, Consumer Durables up by 1.91%, Metal up by 1.89%, Telecom up by 1.76% and Realty up by 1.71%, while there were no losers. 

The top gainers on the Sensex were Indusind Bank up by 3.34%, HCL Tech. up by 2.37%, Asian Paints up by 2.32%, Tata Steel up by 2.23% and ICICI Bank up by 2.21%, while there were no losers. 

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that bank deposit rates are likely to go up further as credit growth is outpacing the deposit growth by a wide margin. As of August 26, 2022 system-level credit growth stood at 15.5 per cent as against 9.5 per cent on the deposit front, which set to intensify competition for deposits as lenders jostle to arrange the funds to fuel the loan demand. Deposits rates to continue to move higher as credit demand strongly outpaces deposit generation.

The agency also upwardly reviewed its credit growth estimate to 13 per cent from the earlier expectation of 10 per cent, on higher working capital demand, shift to bank lending from capital markets and revival in demand from the corporate segment. It said private sector banks are likely to gather pace on deposit accretion supported by the offering of better yields as competition for deposits intensifies. The deposit rates will move higher also because of record cash holdings and increased risk appetite among banks, which would lead to higher competition for deposits.

The agency, which maintained the stable outlook for banks in its review, said asset quality metrics are continuing to improve for the banking system, with the Gross Non-Performing Assets (GNPA) ratio for the banking system declining to 6.1 per cent in FY22 from a peak of 11.8 per cent in FY18. The GNPAs are likely to increase to 6.8 per cent in FY23 due to pressure from small business lending, it said, adding that it can come at 5.3 per cent if the potential write-offs of 1.5 per cent are included. It expects provisioning cost for FY23 to be about 1 per cent against 1.4 per cent in FY22. 

The CNX Nifty is currently trading at 17852.25, up by 230.00 points or 1.31% after trading in a range of 17744.40 and 17879.65. There were 49 stocks advancing against 1 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.55%, Indusind Bank up by 3.30%, Tata Motors up by 3.16%, Cipla up by 3.00% and Hindalco up by 2.64%. On the flip side, Grasim Industries down by 0.72% were the top losers.

All the Asian markets were trading in green; Straits Times gained 14.60 points or 0.45% to 3,270.91, Nikkei 225 surged 106.72 points or 0.39% to 27,674.37, Hang Seng jumped 255.80 points or 1.38% to 18,821.77, Taiwan Weighted advanced 113.73 points or 0.79% to 14,539.41, KOSPI rose 12.85 points or 0.55% to 2,368.51, Jakarta Composite added 0.15 points or 0.01% to 7,195.64 and Shanghai Composite was up by 10.12 points or 0.32% to 3,125.72.