Sensex, Nifty remain higher in early noon deals

Indian equity benchmarks remained higher in early afternoon deals, with both Sensex and Nifty holding notable gains, aided by positive cues from other Asian markets. Sentiments remained optimistic, as India’s services sector growth strengthened in the month of September, as a positive demand environment boosted intakes of new business and output volumes. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index rose at 61.0 in September from 60.1 in August. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- surged to 61.0 in September as against 60.9 in August. Meanwhile, the GST Council is likely to exempt extra-neutral alcohol (ENA) meant for industrial use from the current 18 percent levy for an interim period at its October 7 meeting, and inform the Supreme Court that ENA will not be diverted towards human consumption.

On the global front, Asian markets were trading mostly in green, even after Consumer prices in South Korea were up 3.7 percent on year in September. That exceeded expectations for a gain of 3.4 percent, which would have been unchanged from the August reading. On a monthly basis, consumer prices rose 0.6 percent - again topping forecasts for a rise 0.3 percent but slowing from 1.0 percent in the previous month.

The BSE Sensex is currently trading at 65605.56, up by 379.52 points or 0.58% after trading in a range of 65443.34 and 65753.20. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.03%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.11%, Capital Goods up by 0.87%, Bankex up by 0.80%, Consumer discretionary up by 0.71% and Industrials up by 0.69%, while Utilities down by 0.50%, Power down by 0.48%, Telecom down by 0.31%, Healthcare down by 0.21% and PSU down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Titan up by 1.62%, TCS up by 1.28%, Larsen & Toubro up by 1.25%, ICICI Bank up by 1.01% and Axis Bank up by 0.99%. On the flip side, Power Grid down by 1.38%, NTPC down by 0.79%, HCL Tech. down by 0.75%, Sun Pharma down by 0.37% and Indusind Bank down by 0.32% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that unsecured loans are on the rise, but the Reserve Bank of India (RBI) is unlikely to put regulations to curb the same. It feels there are no issues on asset quality as a result of the fast-paced growth in the portfolios as yet. It also said most of the unsecured lending by banks is to salaried individuals, especially ones with whom banks already have a long relationship, giving them a look into cash flows while making the lending calls, and events like major job losses can hurt the asset quality. 

The rating agency said it can be noted that banks have been reporting very high growth in the retail unsecured books for the last few months, leading to concerns over its possible impact on asset quality. In its mid-year review of the banking sector outlook, it said banks, especially the private sector ones, are focusing on unsecured lending products to protect their margins, which have come under pressure. It noted that the net interest margins are set to compress by 0.15-0.20 per cent to 3.41 per cent for the banking system as a result of the struggle for deposits, which will increase the rates offered to depositors.

According to the report, the current spike in deposit growth to over 13 per cent due to the withdrawal of the Rs 2,000 notes that has got additional funds of over Rs 3.5 lakh crore to the system, and adding that the growth may be transitory. It upwardly revised its FY24 deposit growth estimate to over 12 per cent, and maintained the view that credit growth will come at 13.5 per cent. The NPAs will reduce further to 3.2 per cent at the end of the fiscal for the banking system. The private capital expenditure is at the cusp of revival, and companies can start to invest in the next six months. 

The CNX Nifty is currently trading at 19531.70, up by 95.60 points or 0.49% after trading in a range of 19487.30 and 19576.95. There were 29 stocks advancing against 20 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Titan up by 1.66%, TCS up by 1.27%, Larsen & Toubro up by 1.19%, ICICI Bank up by 1.12% and Eicher Motors up by 1.01%. On the flip side, Power Grid down by 1.51%, NTPC down by 0.85%, Coal India down by 0.75%, HCL Tech. down by 0.73% and Divi's Lab down by 0.73% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 67.49 points or 0.39% to 17,263.33, Taiwan Weighted added 180.14 points or 1.09% to 16,453.52, Jakarta Composite gained 13.44 points or 0.2% to 6,900.02, Straits Times rose 15.69 points or 0.5% to 3,163.08 and Nikkei 225 surged 548.48 points or 1.76% to 31,075.36, while KOSPI dropped 2.09 points or 0.09% to 2,403.60.