Benchmarks trade marginally in green in morning deals

Indian equity benchmarks were trading marginally in green in morning deals, led by gains in Industrials and Auto stocks. Sentiments were positive as the government is considering several measures such as a flexible framework for sale of products manufactured in special economic zones (SEZs) in the domestic market, easy de-notification norms, and streamlining approval processes for units. The aim is to help revive SEZs and facilitate business transactions between SEZ and domestic tariff area (DTA) or the domestic market. Some support also came with provisional data from the National Stock Exchange showing that foreign institutional investors net bought shares worth Rs 957.25 crore on November 16. On the global front, Asian markets are trading mostly in red as weak U.S. economic data rekindled worries about slowing global growth.

The BSE Sensex is currently trading at 66014.00, up by 31.52 points or 0.05% after trading in a range of 65639.74 and 66037.69. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.39%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Industrials up by 1.00%, Auto up by 0.97%, Consumer discretionary up by 0.90%, Capital Goods up by 0.87% and Basic Materials up by 0.85%, while Bankex down by 1.03%, PSU down by 0.32% and Oil & Gas down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.84%, Nestle up by 1.60%, Mahindra & Mahindra up by 1.32%, Hindustan Unilever up by 1.22% and Maruti Suzuki up by 0.90%. On the flip side, SBI down by 3.02%, Axis Bank down by 2.60%, Bajaj Finance down by 1.91%, Bajaj Finserv down by 0.54% and ICICI Bank down by 0.44% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said in a circular that it tightened norms for unsecured personal loans for banks and non-banking financial companies (NBFCs). The revised norms wherein risk weights have been increased by 25 percentage points will not be applicable on certain consumer loans, including housing, education, and vehicle loans.Besides, the norms will not be applicable on loans secured by gold and gold jewellery. These loans will continue to attract 100 per cent risk weight.

Higher risk weight implies that banks have to keep aside more money as buffer when it comes to unsecured personal loans. In simple words, a higher risk weight restricts banks' lending capacity. The RBI  stated ‘On a review, it has been decided to increase the risk weights in respect of consumer credit exposure of commercial banks (outstanding as well as new), including personal loans, but excluding housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, by 25 percentage points to 125 per cent.’  The central bank has also increased the risk weights on credit receivables by 25 percentage points to 150 per cent and 125 per cent for banks and NBFCs, respectively.

Recently, RBI Governor Shaktikanta Das had flagged the high growth in certain components of consumer credit and advised banks and Non-Banking Financial Companies (NBFCs) to strengthen their internal surveillance mechanisms, address the build-up of risks and institute suitable safeguards, in their own interest. The high growth seen in consumer credit and increasing dependency of NBFCs on bank borrowings were also highlighted by the governor during the interactions with MD/CEOs of major banks and large NBFCs in July and August, respectively.

The CNX Nifty is currently trading at 19790.55, up by 25.35 points or 0.13% after trading in a range of 19667.45 and 19806.00. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 4.64%, HDFC Life Insurance up by 3.02%, Asian Paints up by 2.84%, Apollo Hospital up by 2.31% and Hero MotoCorp up by 2.25%. On the flip side, SBI down by 2.91%, Axis Bank down by 2.87%, ONGC down by 1.91%, Bajaj Finance down by 1.56% and ICICI Bank down by 0.60% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 387.26 points or 2.22% to 17,445.56, Straits Times fell 14.94 points or 0.48% to 3,118.11, KOSPI dropped 16.52 points or 0.66% to 2,471.66 and Shanghai Composite weakened 4.78 points or 0.16% to 3,046.15.

On the global front, Nikkei 225 surged 74.52 points or 0.22% to 33,498.93, Taiwan Weighted added 51.27 points or 0.3% to 17,222.45 and Jakarta Composite gained 4.96 points or 0.07% to 6,962.97.