Sensex, Nifty under grip of bears in early noon deals

Indian equity benchmarks remained under a grip of bears, with both Sensex and Nifty trading near their intraday low points, on the back of negative cues from other Asian markets along with heavy selling at Power and Auto counters. Domestic sentiments remained pessimistic, amid a private report stating that India’s current account deficit (CAD) may shoot up in the July-September quarter (second quarter, or Q2) of 2022-23 (FY23), with the net export ratio touching a fresh nine-year low at 5.89 per cent of gross domestic product (GDP) in Q2.

Adding more worries among traders, another private report stated that the protests in China against the restrictions under its Zero-Covid policy could impact India's consumer goods including gold, electronics, and engineering goods. The fall in demand due to the lockdown as well as disruption in the supply of inputs from China may impact several sectors. The street overlooked India's permanent representative to the United Nations (UN) Ruchira Kamboj’s statement that India is ready to take its place at the global top table as a country that is willing to bring solutions and contribute positively to the global agenda.

Asian markets were trading lower, as consumer prices in South Korea were up 5.0 percent on year in November. That was shy of expectations for an increase of 5.1 percent and was down from 5.7 percent in October. On a seasonally adjusted monthly basis, inflation fell 0.1 percent versus forecasts for a flat reading following the 0.3 percent gain in the previous month. Core CPI, which excludes the volatiles prices of food, was up 0.3 percent on month and 4.3 percent on year after advancing 0.4 percent on month and 4.2 percent on year in October.

The BSE Sensex is currently trading at 62735.19, down by 549.00 points or 0.87% after trading in a range of 62686.82 and 63148.59. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Metal up by 0.39%, PSU up by 0.22%, Realty up by 0.21% and Industrials up by 0.10% %, while Power down by 1.17%, Auto down by 1.11%, Utilities down by 1.01%, TECK down by 0.81% and FMCG down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.90%, Tech Mahindra up by 0.77%, Dr Reddy's Laboratories up by 0.27% and Bajaj Finserv up by 0.07%. On the flip side, Mahindra & Mahindra down by 2.35%, Hindustan Unilever down by 2.01%, TCS down by 1.59%, Maruti Suzuki down by 1.35% and ICICI Bank down by 1.32% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) has come out with four-tiered regulatory framework for categorisation of Urban Co-operative Banks (UCBs). Apart from this, it has come out with norms pertaining to the net worth and capital adequacy of these banks. The four-tiered regulatory framework, based on size of deposits of the UCBs, will come into force with immediate effect. The extant regulatory framework classifies UCBs into two tiers -- Tier I and Tier II.

In a circular, the RBI said given the heterogeneity in the cooperative sector, a tiered regulatory framework is required. Such a framework is needed to balance the spirit of mutuality and co-operation more prevalent in banks of smaller sizes and those with limited area of operation vis-a-vis the growth ambitions of the large-sized UCBs and undertake more complex business activities.

It has been decided to adopt a four-tiered regulatory framework, as against the existing two-tiered framework, for categorisation of UCBs. Going forward, the categorisation may be used for differentiated regulatory prescriptions aimed at strengthening the financial soundness of the UCBs. The RBI has categorised all unit UCBs and salary earners' UCBs (irrespective of deposit size), and all other UCBs having deposits up to Rs 100 crore in Tier 1. In Tier 2, it has placed UCBs with deposits more than Rs 100 crore and up to Rs 1,000 crore. Tier 3 will cover banks with deposits more than Rs 1,000 crore and up to Rs 10,000 crore.

The CNX Nifty is currently trading at 18647.30, down by 165.20 points or 0.88% after trading in a range of 18639.20 and 18781.95. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 1.31%, ONGC up by 0.89%, Tech Mahindra up by 0.83%, Tata Steel up by 0.68% and Grasim Industries up by 0.62%. On the flip side, Eicher Motors down by 2.96%, Mahindra & Mahindra down by 2.35%, Hindustan Unilever down by 2.01%, Tata Consumer Products down by 1.92% and Cipla down by 1.74% were the top losers on Nifty.

All Asian markets were trading lower; Taiwan Weighted dropped 42.12 points or 0.28% to 14,970.68, Jakarta Composite lost 20.68 points or 0.29% to 7,000.12, Hang Seng decreased 47.90 points or 0.26% to 18,688.54, KOSPI fell 45.51 points or 1.84% to 2,434.33, Straits Times trembled 23.79 points or 0.72% to 3,268.94, Shanghai Composite declined 8.81 points or 0.28% to 3,156.66 and Nikkei 225 slipped 448.18 points or 1.59% to 27,777.90.