Markets remain in red in late morning deals

Domestic equity indices remained in red and were trading with cut of over half a percent in late morning deals on account of negative cues from global markets and mixed earnings results from IT giants. Hectic selling in Infosys, Axis Bank, Wipro and SBI stocks pressured markets to trade lower. Sentiments remained weak after the Labor Department released a separate report showing consumer price growth in the U.S. slightly exceeded estimates in the month of September. The Labor Department said its consumer price index climbed by 0.4 percent in September. Street had expected consumer prices to rise by 0.3 percent. Further, persistent foreign fund outflows also dented sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 1,862.57 crore on October 12, 2023. On the BSE sectoral front, traders were seen pilling up position in Realty, Telecom, Healthcare, FMCG and Energy, while selling was witnessed in IT, Bankex, TECK, Basic Materials and Consumer Durables. 

On the global front, Asian markets were trading mostly in red, following negative cues from US markets overnight, as investors digest China’s inflation and trade data for September. Data from the National Bureau of Statistics showed that China consumer price inflation remained flat in September and producer prices continued to decline. The consumer price index remained unchanged on a yearly basis after a 0.1 percent gain in August. Prices were forecast to climb 0.2 percent. Producer prices posted an annual fall of 2.5 percent in September but slower than the 3.0 percent decrease in August. Back home, in the stock specific development, Infosys dropped after trimming its revenue outlook for FY24.

The BSE Sensex is currently trading at 66052.83, down by 355.56 points or 0.54% after trading in a range of 65895.41 and 66176.11. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index up by 0.18%.

The top gaining sectoral indices on the BSE were Realty up by 1.10%, Telecom up by 0.38%, Healthcare up by 0.22%, FMCG up by 0.15% and Energy up by 0.13%, while IT down by 0.95%, Bankex down by 0.83%, TECK down by 0.78%, Basic Materials down by 0.44% and Consumer Durables down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.94%, HCL up by 1.51%, Nestle up by 1.11%, TCS up by 0.52% and Sun Pharma up by 0.51%. On the flip side, Infosys down by 2.50%, Axis Bank down by 2.24%, Wipro down by 1.75%, SBI down by 1.73% and Tech Mahindra down by 1.11% were the top losers.

Meanwhile, the Federation of Indian Chambers of Commerce and Industry-Indian Banks Association (FICCI-IBA) survey has stated that higher interest rates have resulted in a reduction in Current Account Savings Account (CASA) deposits as most of the savers are shifting towards term deposits. CASA is low-cost deposits mobilised by banks, and higher amount of low-cost deposits mean better margins for banks.

A survey showed that long term credit demand has seen continued growth in sectors like infrastructure, textiles, and chemicals. Food processing and metals iron & steel have also witnessed accelerated long-term loan disbursements in the past six months. Infrastructure is witnessing an increase in credit flow, with 67 per cent of the respondents indicating an increase in long term loans as against 57 per cent in the previous round.

The survey said that the outlook on expectations for the growth of non-food industry credit over the next six months is optimistic, with 42 per cent of the participating banks expecting non-food industry credit growth to be above 12 per cent as compared to 36 per cent in the previous round. Given the higher rates of interest, a shift towards term deposits has been observed. Over half of respondent banks (57 per cent) reported a decrease in the share of CASA deposits in total deposits in the current round of the survey. The term deposits have picked up pace as reported by the respondent banks.

With regard to asset quality, it said that 75 per cent of the respondent banks reported a decrease in their Non-Performing Asset (NPA) levels in the last six months as compared to 90 per cent of the banks that reported so in the previous round. An overwhelming 90 per cent of public sector banks have cited a reduction in NPA levels while among participating private sector banks, 80 per cent have cited a decline in NPAs. Respondent banks were more confident about the asset quality prospects in the current round of the survey, cushioned by policy and regulatory support.

The CNX Nifty is currently trading at 19693.35, down by 100.65 points or 0.51% after trading in a range of 19635.30 and 19736.60. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Tata Consumer up by 2.06%, Indusind Bank up by 1.80%, HCL up by 1.55%, Nestle up by 1.11% and Coal India up by 0.78%. On the flip side, Adani Enterprises down by 2.65%, Infosys down by 2.61%, Axis Bank down by 2.30%, SBI down by 1.76% and Wipro down by 1.74% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 392.18 points or 2.15% to 17,846.03, Nikkei 225 slipped 230.78 points or 0.71% to 32,263.88, Taiwan Weighted lost 64.69 points or 0.38% to 16,761.22, Straits Times fell 28.74 points or 0.89% to 3,189.95, KOSPI dropped 23.28 points or 0.94% to 2,456.54 and Shanghai Composite weakened 24.01 points or 0.77% to 3,083.89. However, Jakarta Composite gained 10.65 points or 0.15% to 6,945.80.