Markets remain in red in late morning deals

Indian equity markets remained in red and were trading marginally lower in late morning deals on account of selling in Mahindra & Mahindra, Titan, HCL and Infosys companies’ stocks. Weak cues from global markets weighed on the domestic sentiments. Traders were cautious as US Treasury yields jumped in the wake of a weak bond auction and cautious comments on the rate outlook from Fed Chair Jerome Powell. Powell said the central bank will not hesitate to resume raising interest rates if it becomes appropriate. Meanwhile, traders took a note of report that Reserve Bank of India (RBI) Governor Shaktikanta Das has said that RBI remains watchful and the monetary policy is actively disinflationary and supporting growth. On the BSE sectoral front, traders were seen pilling up position in Utilities, Capital Goods, Power, Industrials and Metal, while selling was witnessed in Auto, TECK, IT, Consumer Durables and Consumer Disc.

On the global front, Asian markets were trading in red following weak cues from US markets overnight. Back home, in the stock specific development, Campus Activewear slipped after the company reported a sharp 97.8 per cent decline in its profit after tax at Rs 0.30 crore in September 2023 (Q2FY24), due to weak operational performance. The footwear company had posted a net profit of Rs 14.5 crore in a year ago quarter.

The BSE Sensex is currently trading at 64715.04, down by 117.16 points or 0.18% after trading in a range of 64580.95 and 64779.02. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.27%.

The top gaining sectoral indices on the BSE were Utilities up by 0.57%, Capital Goods up by 0.48%, Power up by 0.47%, Industrials up by 0.39%, Metal up by 0.23%, while Auto down by 0.66%, TECK down by 0.55%, IT down by 0.54%, Consumer Durables down by 0.54% and Consumer Disc down by 0.36% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 0.93%, Bajaj Finance up by 0.49%, Tech Mahindra up by 0.48%, Ultratech Cement up by 0.39% and Larsen & Toubro up by 0.31%. On the flip side, Mahindra & Mahindra down by 2.16%, Titan down by 1.11%, HCL down by 0.99%, Infosys down by 0.85% and Asian Paints down by 0.65% were the top losers.

Meanwhile, global rating agency Fitch Ratings in its latest report has said that Indian banks' Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term. It expects Issuer Default Ratings (IDRs) to remain stable across banks as they are driven by its expectation of extraordinary support from the Indian sovereign (BBB-/Stable), should there be a need.

According to the report, two Indian banks' VRs were upgraded in 2023, with upside possible for several banks as Fitch expects the recent, better-than-expected, financial performance, mainly in asset quality and earnings, to be maintained. The recent revision of the operating environment score to 'bb+' from 'bb' also supports the assessment. Five of the eight Indian banks' VRs are in the 'bb' category, reflecting a moderate degree of financial strength, while the other three with VRs in the 'b' category are still weighed down by their risk profiles, weak financial metrics of the past and weaker loss-absorption buffers than higher rated peers. 

The rating agency said ‘risk profiles and capitalisation are most important to our assessment of the banks' standalone credit profiles amid their growing risk appetite. The asset-quality scores for all rated banks have positive outlooks as we expect their impaired-loan ratios to improve further in FY24’. The scores were revised up for several banks in 2023, mostly in the 'b' category, to factor in the better-than-expected performance, which we forecast to continue improving in the near term. This should drive the average core metric even lower across banks as the influence of their poor past performance also declines.

The CNX Nifty is currently trading at 19369.70, down by 25.60 points or 0.13% after trading in a range of 19329.45 and 19384.85. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.22%, Adani Ports & SEZ up by 1.00%, NTPC up by 0.80%, HDFC Life Insurance up by 0.53% and Tech Mahindra up by 0.52%. On the flip side, Mahindra & Mahindra down by 2.07%, Hero MotoCorp down by 1.48%, LTIMindtree down by 1.10%, Titan down by 1.04% and HCL down by 0.99% were the top losers.

All Asian markets were trading lower; Hang Seng declined 302.65 points or 1.76% to 17,208.64, Nikkei 225 slipped 58.85 points or 0.18% to 32,587.61, Taiwan Weighted lost 62.98 points or 0.38% to 16,682.67, Straits Times fell 24.84 points or 0.8% to 3,110.48, KOSPI dropped 17.98 points or 0.75% to 2,409.10, Shanghai Composite weakened 19.43 points or 0.64% to 3,033.85 and Jakarta Composite plunged 8.9 points or 0.13% to 6,829.33.