Key gauges continue to trade higher in morning deals

Equity benchmark indices continued to trade higher in morning deals, amid continuous foreign fund inflows. As per exchange data, foreign Institutional Investors (FIIs) bought shares worth Rs 935.88 crore on Monday. Sentiments remained up-beat with report stated that senior officials of India and the European Union (EU) on November 28 commenced the third round of talks on a proposed free trade agreement, which aims at boosting trade and investments between the two regions. Some support also came as the Reserve Bank of India (RBI) released quarterly statistics on deposits and credit highlighted that bank credit growth to 17.2 per cent on an annual basis in September from 14.2 per cent a quarter ago. Besides, relative strength of the Rupee and hint by the US Fed on slowing down on policy rates supported the markets.

On the global front, Asian markets are trading mostly in green after China's securities regulator lifted a ban on equity refinancing for listed property firms. Back home, power stocks remained in limelight as the Power Ministry launched a scheme for the procurement of aggregate electricity of 4,500 MW for five years under of the SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy.

The BSE Sensex is currently trading at 62745.68, up by 240.88 points or 0.39% after trading in a range of 62362.08 and 62749.13. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were FMCG up by 1.16%, Consumer Durables up by 1.06%, Metal up by 0.84%, Healthcare up by 0.65% and Bankex up by 0.53%, while Capital Goods down by 0.33%, Telecom down by 0.27%, Oil & Gas down by 0.21%, Energy down by 0.18% and Industrials down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.55%, Tata Steel up by 1.76%, Titan Co up by 1.72%, Ultratech Cement up by 1.28% and Dr. Reddy's Lab up by 1.19%. On the flip side, Larsen & Toubro down by 0.74%, Power Grid Corporation down by 0.63%, NTPC down by 0.53%, Bajaj Finserv down by 0.37% and Asian Paints down by 0.29% were the top losers.

Meanwhile, Fitch Ratings has said that India's bank credit growth will accelerate in the financial year ending March 2023 (FY23), despite the effects of higher interest rates. It stated strong loan growth should benefit net revenue, particularly as it will be coupled with wider net interest margins. However, it will put pressure on Core Equity Tier 1 ratios (CET1) should credit growth exceed Fitch's expectations, limiting buffers to absorb potential future losses.

Fitch Ratings sees bank credit expanding by around 13 per cent in FY23, up from 11.5 per cent in FY22. It said ‘The acceleration will be driven by the normalisation of economic activity after the Covid-19 pandemic, and high nominal GDP growth, which we expect to boost demand for retail and working-capital loans.’ It forecasts India's real GDP growth at 7 per cent in FY23.

It mentioned 'The full-year loan growth is likely to represent a modest slowdown from the 17 per cent y-o-y pace in 1HFY23. This factors in some base effects. Nonetheless, we expect credit demand to stay robust into FY24, when we see growth at similar levels or slightly higher, assuming continued strong economic expansion.’ Besides, it said rapid loan growth contributed to the system CET1 ratio dropping by nearly 50 basis point in 1HFY23, from 13.4 per cent at end-FY22.

However, it added ‘Most banks do not factor in quarterly profits as part of their capital calculation. Our baseline assumption is that CET1 ratios will fall only modestly, and remain around 13 per cent levels until FY24, as banks step up efforts to raise external capital.’

The CNX Nifty is currently trading at 18637.40, up by 74.65 points or 0.40% after trading in a range of 18552.15 and 18639.00. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.59%, Cipla up by 1.85%, Tata Steel up by 1.81%, Titan Co up by 1.66% and Hindalco up by 1.50%. On the flip side, Larsen & Toubro down by 0.80%, BPCL down by 0.73%, Power Grid Corporation down by 0.61%, NTPC down by 0.53% and Bajaj Finserv down by 0.42% were the top losers.

Asian markets are trading mostly in green; Straits Times advanced 30.03 points or 0.93% to 3,270.09, Hang Seng surged 666.30 points or 3.85% to 17,964.24, Taiwan Weighted rose 128.88 points or 0.89% to 14,685.75, KOSPI added 20.70 points or 0.86% to 2,428.97 and Shanghai Composite was up by 67.96 points or 2.21% to 3,146.51. On the other hand, Nikkei 225 fell 128.82 points or 0.46% to 28,034.01 and Jakarta Composite was down by 10.78 points or 0.15% to 7,006.58.