Sensex, Nifty remain lower in early noon deals

Weak trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty remained lower, on the back of mixed cues from other Asian markets. Heavy selling at TECK and Banking counters kept indices down, while Bharti Airtel lost the most on the BSE. Sentiments remained negative, amid a private report stating that the impact of COVID-19, combined with geopolitical turmoil, an economic crisis and natural disasters, has pushed social progress backwards. The street ignored a private report stating that free food distribution of cereals during the pandemic has starkly reduced income inequality across laggard states and those at the bottom of the pyramid.

On the global front, Asian markets were trading mixed, after South Korea posted a current account deficit of $0.62 billion in November, following the $0.883 billion surplus in October. The goods account recorded a $1.57 billion deficit, down from the $6.07 billion surplus one year earlier. The services account deficit increased from $0.27 billion one year earlier to $0.34 billion in November 2022, owing to a decrease in the transport account surplus. Back home, coal sector was in focus, as the Ministry of Coal has planned to engage reputed Mining Developers cum Operators (MDOs) in coal mines, through open global tenders, with an aim to ramp up domestic coal production and reduce import dependency.

The BSE Sensex is currently trading at 60244.69, down by 502.62 points or 0.83% after trading in a range of 60125.69 and 60809.65. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.40%, while Small cap index was down by 0.22%.

The few gaining sectoral indices on the BSE were Metal up by 0.47%, Healthcare up by 0.41% and Auto up by 0.39%, while TECK down by 1.33%, Bankex down by 1.11%, IT down by 1.05%, PSU down by 0.98% and Telecom down by 0.94% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 7.05%, Power Grid Corporation of India up by 1.58%, Tata Steel up by 0.98%, Hindustan Unilever up by 0.84% and Mahindra & Mahindra up by 0.48%. On the flip side, Bharti Airtel down by 2.85%, SBI down by 2.14%, TCS down by 1.66%, HDFC down by 1.57% and HDFC Bank down by 1.55% were the top losers.

Meanwhile, ICRA Ratings in its latest report has said that amid tight liquidity condition, banks have issued a record quantum of bonds, with gross issuances hitting an all-time high of Rs 91,500 crore so far this fiscal. It said gross bond issuances by banks is estimated to reach Rs 1.3-1.4 lakh crore this fiscal (FY23) as debt sales have already hit record high of Rs 0.915 lakh crore, surpassing the previous high of Rs 0.8 lakh crore in FY17.

The agency said this alternate resource of fund raising by banks is on the back of widening credit-deposit gap. With credit demand continuing to outdo deposits throughout this fiscal, the overall gap between deposits and credit growth widened substantially. Incremental credit expansion stood at Rs 12.7 lakh crore, while deposit accretion continued to trail at Rs 8.9 lakh crore, till December 16, 2022. To bridge this gap, banks have been relying on various sources of funding such as refinance from financial institutions, drawdown of excess on-balance sheet liquidity and debt capital market issuances. As a result, gross bond issuances by banks surged to Rs 0.9 lakh crore in the first nine months of FY23, up from Rs 0.7 lakh crore in FY22, and surpassing the previous high of Rs 0.8 lakh crore in FY17.

ICRA expects the system-wide credit-to-deposit ratio to firm up to 76.3-76.5 per cent by March from 74.8 per cent as of December 16, 2022, and stand considerably higher than the low of 69.6 per cent seen during the pandemic. Accordingly, the overall gross bond issuances by banks may rise to Rs 1.3-1.4 trillion in FY23. Tier I & II bonds qualify for inclusion in capital ratios besides shoring up growth capital for lenders and boost their liquidity coverage ratios and the net stable funding ratios. Banks also issue long-term infrastructure bonds to fund certain specified eligible assets.

The CNX Nifty is currently trading at 17948.10, down by 153.10 points or 0.85% after trading in a range of 17927.10 and 18127.60. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 6.88%, Apollo Hospital up by 1.59%, Power Grid Corporation of India up by 1.43%, Hindalco up by 1.35% and ONGC up by 0.98%. On the flip side, Bharti Airtel down by 2.85%, Adani Enterprises down by 2.61%, Eicher Motors down by 2.42%, SBI down by 2.25% and Hero MotoCorp down by 2.06% were the top losers.

Asian markets were trading mixed; Jakarta Composite lost 111.57 points or 1.67% to 6,576.70, Hang Seng decreased 83.91 points or 0.39% to 21,304.43, Straits Times trembled 33.92 points or 1.03% to 3,271.75 and Shanghai Composite declined 6.07 points or 0.19% to 3,170.01, while KOSPI rose 1.12 points or 0.05% to 2,351.31, Taiwan Weighted strengthened 50.75 points or 0.34% to 14,802.96 and Nikkei 225 surged 201.71 points or 0.78% to 26,175.56.