Benchmarks continue to trade in deep red in morning session

Indian equity benchmarks continued to trade in deep red in morning session, with the Sensex losing over 680 points and Nifty falling below the 16,900 level, triggered by weak global trends. Sentiments remained down-beat as the Reserve Bank of India's (RBI) statistical supplement showed India's foreign exchange reserves fell to $560 billion as of the week ended March 10, their lowest since early-December. Some concern also came as Reserve Bank of India (RBI) governor -- Shaktikanta Das has cautioned banks against any build-up of asset-liability mismatches, saying both are detrimental to financial stability and hinted that the ongoing crisis in the US banking system seems to have emanated from such mismatches. Traders paid no heed towards the Organisation for Economic Cooperation and Development (OECD) revised upwards its growth estimate for India by 20 basis points to 5.9 per cent for FY24.

On the global front, Asian markets are trading mostly in red amid fears that the U.S. banking turmoil will lead to tighter lending standards that will cripple small businesses and eventually send the world's largest economy into a recession. Back home, cement industry stocks remained in watch with Crisil’s report that the continuing demand for housing, accounting for 60-65 per cent of cement demand, and aggressive government investments in infrastructure will drive demand, nudging cement-makers to add 145-155 MT in fresh capacity at an investment of Rs 1.2 lakh crore by FY27.

The BSE Sensex is currently trading at 57304.51, down by 685.39 points or 1.18% after trading in a range of 57263.93 and 57829.23. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.30%, while Small cap index was down by 1.06%.

The top losing sectoral indices on the BSE were Metal down by 1.94%, Auto down by 1.63%, IT down by 1.54%, TECK down by 1.51% and Realty down by 1.42%, while there were no gaining sectoral indices on the BSE.

The sole gainer on the Sensex was Hindustan Unilever up by 0.01%. On the flip side, Bajaj Finserv down by 2.97%, Tata Motors down by 2.74%, Bajaj Finance down by 2.00%, SBI down by 1.90% and Tech Mahindra down by 1.86% were the top losers.

Meanwhile, Reserve Bank of India (RBI) governor -- Shaktikanta Das has cautioned banks against any build-up of asset-liability mismatches, saying both are detrimental to financial stability and hinted that the ongoing crisis in the US banking system seems to have emanated from such mismatches.

Amid the continuing volatility in exchange rates, especially due to the excessive appreciation of the US dollar, and its impact on the external debt servicing ability of nations, Das said ‘We have nothing to fear as our external debt is manageable and thus appreciation of the greenback does not pose any problem to us.’

On the US baking crisis where two mid-sized banks (Silicon Valley Bank and First Republic Bank) with over $200 billion in balance sheets each went belly up last week, he said the ongoing crisis drives home the importance of robust regulations that focus on sustainable growth and not excessive build-up either on the asset side or liability side.

Das, without naming the US bank, said that on the face of it, one of them had unmanageable deposits in excess of their assets side business. Das, who has been an open critic of private digital currencies, said the ongoing US banking crisis also clearly shows the risks of private cryptocurrencies to the financial system.

The CNX Nifty is currently trading at 16895.45, down by 204.60 points or 1.20% after trading in a range of 16881.55 and 17066.60. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.01%, Dr. Reddy's Lab up by 0.65%, Divi's Lab up by 0.59%, Hindustan Unilever up by 0.31% and ONGC up by 0.13%. On the flip side, Adani Enterprises down by 4.13%, Bajaj Finserv down by 2.85%, Tata Motors down by 2.71%, Hindalco down by 2.63% and HDFC Life Insurance down by 2.43% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 50.21 points or 0.32% to 15,402.75, Hang Seng declined 499.01 points or 2.62% to 19,019.58, KOSPI dropped 16.41 points or 0.68% to 2,379.28, Jakarta Composite plunged 54.13 points or 0.82% to 6,624.11, Straits Times fell 33.88 points or 1.06% to 3,149.40 and Nikkei 225 slipped 349.76 points or 1.28% to 26,984.03.

On the flip side, Shanghai Composite strengthened 4.03 points or 0.12% to 3,254.58.