Domestic indices trade near low points of day in late morning deals

Domestic equity indices magnified their losses and traded near low points of day in late morning deals owing to selling by funds and retail investors. Selling in FMCG, TECK and IT sectors’ stocks pulled markets further downside. Negative cues from global markets also weighed on domestic sentiments. Sentiments remained weak as the U.S. Federal Reserve’s July minutes showed inflation concerns lingered, which could lead to more rate hikes. Electric vehicle industry related stocks were in focus as the government approved plans for a nearly 580 billion rupee scheme to deploy electric buses. On the global front, Asian markets were trading mostly in red following weak cues from the U.S. markets. The prospects of a possible downgrade of several U.S. lenders by Fitch Ratings and lingering concerns about China's economic slowdown also continued to weigh on sentiment. Back home, in the stock specific development, Adani Power rallied after U.S.-based boutique investment firm GQG Partners invested $1.1 billion in the company for an 8.1 percent stake.

The BSE Sensex is currently trading at 65240.57, down by 298.85 points or 0.46% after trading in a range of 65213.55 and 65535.14. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.81%, Realty up by 0.16%, PSU up by 0.02%, Telecom up by 0.04% and Consumer Disc up by 0.02%, while FMCG down by 0.87%, TECK down by 0.75%, IT down by 0.74%, Utilities down by 0.69% and Metal down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Titan up by 1.08%, Axis Bank up by 0.57%, SBI up by 0.37% and HDFC Bank up by 0.07%. On the flip side, ITC down by 1.90%, Power Grid down by 1.65%, Nestle down by 1.36%, TCS down by 1.14% and Ultratech Cement down by 1.00% were the top losers.

Meanwhile, Care Ratings in its latest report has said that banks' lending to non-banking finance companies (NBFCs) rose by a robust 35.1 per cent to Rs 14.2 lakh crore in June 2023, indicating non-banking finance firms' decreased reliance on international borrowings. This also pushed up NBFCs' share in overall credit from 8.5 per cent in June 2022 to 9.9 per cent in the reporting month. 

According to the report, mutual funds' debt exposure to NBFCs, including through commercial papers (CPs) and corporate debt, also increased 14.5 per cent to Rs 1.62 lakh crore in June. MF exposure to NBFCs as a share of debt asset under management has remained broadly constant hovering at around 10 per cent. On the other hand, the share of banks' advances to NBFCs as a share of aggregate advances has doubled from around 4.5 per cent in February 2018 to nearly 10 per cent in June, indicating the reliance of NBFCs on bank lending.

The report also said that bank credit to NBFCs has been consistently moving up since the second half of FY22, coinciding with the phased reopening of the economy since the Covid pandemic. This growth momentum further accelerated in FY23 and in the first quarter of FY24, which can primarily be ascribed to NBFCs' asset base.

The CNX Nifty is currently trading at 19366.05, down by 98.95 points or 0.51% after trading in a range of 19362.90 and 19461.55. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 1.93%, Titan up by 1.07%, Adani Enterprises up by 0.61%, Axis Bank up by 0.60% and Dr. Reddy's Lab up by 0.29%. On the flip side, ITC down by 1.99%, LTIMindtree down by 1.93%, Power Grid down by 1.83%, Divi's Lab down by 1.32% and Nestle down by 1.29% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 183.12 points or 1% to 18,146.18, Shanghai Composite weakened 9.73 points or 0.31% to 3,140.40, KOSPI dropped 9.55 points or 0.38% to 2,516.09, Straits Times fell 17.77 points or 0.55% to 3,195.81 and Nikkei 225 slipped 188.76 points or 0.59% to 31,578.06. However, Taiwan Weighted added 76.21 points or 0.46% to 16,522.99.