Benchmarks add some losses in morning deals

Indian equity benchmarks added some losses in morning deals, amid weak global market trends and foreign fund outflows. Foreign institutional investors offloaded shares worth Rs 2,139.02 crore on Monday, according to data available with BSE. Traders remained cautious as a private report stated that India's retail inflation accelerated to a five month high of 7.30% in September due to surging food prices, staying well above the Reserve Bank of India's (RBI) upper tolerance band for a ninth month. Traders overlooked Prime Minister Narendra Modi’s statement that inflation in the country is much lower than that in developed countries. He said ‘Compared to developed countries, inflation is quite low, for example the British are witnessing the worst inflation in the last 50 years, Americans are facing highest inflation of the last 45 years, interest rates are very high... compared to those countries, the nation's inflation is low because buoyant economy, our country's economy is very vibrant.'

On the global front, Asian markets are trading mostly in red as investors stayed cautious ahead of major corporate earnings this week, with nerves around rising interest rates and escalating geopolitical tensions also weighing on sentiment. Back home, auto stocks were trading lower despite the Federation of Automobile Dealers Associations (FADA) said in a major boost to the automobile sector and in a sign of recovery, retail vehicle sales this Navratri were up 57 per cent to 539,227 units, from 342,459 units during the Covid-hit 2021-22. Overall sales were 27 per cent higher than Navratri 2020 and 16 per cent above the pre-pandemic 2019 season.

The BSE Sensex is currently trading at 57616.61, down by 374.50 points or 0.65% after trading in a range of 57611.51 and 58027.52. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.49%, while Small cap index was down by 0.18%.

The top losing sectoral indices on the BSE Realty down by 1.37%, Metal down by 1.10%, Auto down by 1.06%, Oil & Gas down by 1.03% and TECK down by 0.99%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Asian Paints up by 1.89%, Axis Bank up by 0.83%, Bajaj Finserv up by 0.30%, Nestle up by 0.28% and ITC up by 0.23%. On the flip side, TCS down by 1.74%, Dr. Reddy's Lab down by 1.69%, Tech Mahindra down by 1.33%, Titan Company down by 1.22% and Maruti Suzuki down by 1.21% were the top losers.

Meanwhile, in order to improve ratings disclosures on bank credit to large customers, the Reserve Bank of India (RBI) said unless rating agencies disclose names of all lenders in their rating statements, banks cannot use such ratings for capital computation for making provisions. Reviewing the prudential norms for risk weights for exposures to large corporates and non-banking finance companies, a notification from RBI (Reserve Bank of India) said the new mandatory loan rating disclosures will be effective from March 31, 2023.

Issuing the notification and setting the new deadline, the regulator said despite repeated reminders, external credit assessment institutions have not been making the mandated disclosures citing lack of consent from borrowers. As part of the master circular on Basel III capital regulations, issued on April 1, 2022, the monetary authority had asked rating agencies to disclose the name of all the banks in the credit rating statements after getting the consent from borrowers from August 31, 2021. But they have not been doing so citing their inability to secure the consent from borrowers.

Such disclosures make banks eligible to compute their capital requirement for such loans and make the needed capital provisions. Such disclosures will make bank eligible to derive risk weights for their unrated exposures based on the ratings available for a specific rated debt, provided the bank's facility ranks pari passu or senior to the specific rated debt in all respects and the maturity of the unassessed claim is not later than the maturity of the rated claim.

The CNX Nifty is currently trading at 17134.35, down by 106.65 points or 0.62% after trading in a range of 17131.80 and 17261.80. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 1.99%, Asian Paints up by 1.89%, Axis Bank up by 0.86%, Bajaj Finserv up by 0.29% and Britannia Industries up by 0.28%. On the flip side, Divi's Lab down by 3.98%, Eicher Motors down by 1.62%, ONGC down by 1.61%, TCS down by 1.61% and Dr. Reddy's Lab down by 1.60% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 721.69 points or 2.66% to 26,394.42, Taiwan Weighted dropped 558.93 points or 4.08% to 13,143.35, Jakarta Composite lost 14.24 points or 0.2% to 6,980.16, KOSPI fell 49.73 points or 2.23% to 2,183.11, Straits Times trembled 3.87 points or 0.12% to 3,103.60 and Hang Seng decreased 268.15 points or 1.56% to 16,948.51.

On the flip side, Shanghai Composite gained 11.96 points or 0.4% to 2,986.11.