Markets open at record highs on Wednesday

Indian equity benchmarks continued their gaining spree with optimistic start and made new highs again on Wednesday. Markets trimmed some of their opening gains but soon recovered and are trading firm in early deals tracking gains in Asian counterparts coupled with fall in crude oil prices overnight. Sensex and Nifty garner gains of around 0.40% each. Foreign fund inflows aided sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FIIs) bought shares worth Rs 5,223.51 crore on December 5. Some support also came in with report that banks have written off Rs 10.57 lakh crore during the last five financial years, of which Rs 5.52 lakh crore was in respect of loans pertaining to large industries. The scheduled commercial banks have also recovered Rs 7.15 lakh crore of non-performing assets (NPAs) during the five-year period. Besides, the finance ministry said that the Central government’s debt is estimated to moderate to 57.2% of gross domestic product (GDP) in FY24 from 61.5% in FY21 when pandemic-related spending to provide succour to people and businesses led to a spike in its loan profile. 

On the global front, most of the Asian markets are trading higher as the US Fed is widely expected to leave interest rates unchanged in the coming months, traders are looking for more evidence to solidify hopes of a rate cut in the near future. Back home, online gaming industry related stocks are in focus after the finance ministry said as many as 71 show cause notices have been issued to online gaming companies for alleged GST evasion of over Rs 1.12 lakh crore during financial years 2022-23 and 2023-24. In stock specific development, Himadri Speciality jumped as its board approved Rs 4,800 crore investment to set up a lithium ion battery components unit.

The BSE Sensex is currently trading at 69572.88, up by 276.74 points or 0.40% after trading in a range of 69395.01 and 69614.04. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.22%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Utilities up by 2.71%, Power up by 2.50%, Oil & Gas up by 1.37%, IT up by 1.12% and Energy up by 1.07%, while Metal down by 0.26%, Bankex down by 0.23%, Realty down by 0.23%, Telecom down by 0.23% and Auto down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.78%, ITC up by 1.76%, Nestle up by 1.49%, Tech Mahindra up by 1.42% and HCL Technologies up by 1.30%. On the flip side, ICICI Bank down by 0.82%, NTPC down by 0.47%, Ultratech Cement down by 0.39%, Bharti Airtel down by 0.39% and Tata Steel down by 0.30% were the top losers.

Meanwhile, in an encouraging move, banks have written off Rs 10.57 lakh crore during the last five financial years, of which Rs 5.52 lakh crore was in respect of loans pertaining to large industries. Minister of State for Finance Bhagwat Karad has said ‘As per RBI data, scheduled commercial banks (SCBs) have written off an aggregate loan amount of Rs 10.57 lakh crore during the last five financial years’. The scheduled commercial banks have also recovered Rs 7.15 lakh crore of non-performing assets (NPAs) during the five-year period.

He said ‘Comprehensive steps have been taken to recover NPAs, enabled by which, SCBs have made an aggregate recovery of Rs 7,15,507 crore (RBI provisional data for FY 2022-23) in NPA accounts, including written-off loans, during the last five financial years’. He said ‘Scheduled commercial banks have written off an aggregate amount of Rs 5.52 lakh crore in respect of loans pertaining to large industries and services during the last five financial years (FYs), i.e. from FY 2018-19 to FY 2022-23’. He also said that this includes Rs 93,874 crore written off by all the banks on account of fraud during the five-year period.

Karad said banks regularly evaluate the impact of write-offs as part of the exercise to clean up their balance sheet, avail tax benefit and optimise capital, in accordance with the said guidelines and policies of the respective boards. He added ‘Such write-off does not result in waiver of liabilities of borrowers to repay and therefore, write-off does not benefit the borrowers. The borrowers of written-off loans continue to be liable for repayment and banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available to them.’

The CNX Nifty is currently trading at 20930.05, up by 74.95 points or 0.36% after trading in a range of 20887.55 and 20956.55. There were 31 stocks advancing against 18 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were LTIMindtree up by 2.87%, Adani Enterprises up by 2.09%, UPL up by 2.03%, Adani Ports & SEZ up by 1.76% and ITC up by 1.75%. On the flip side, Bajaj Auto down by 2.28%, ICICI Bank down by 0.85%, Hindalco down by 0.78%, Eicher Motors down by 0.71% and Hero MotoCorp down by 0.54% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 586.31 points or 1.79% to 33,362.13, Hang Seng advanced 109.03 points or 0.67% to 16,436.89, Taiwan Weighted added 62.2 points or 0.36% to 17,390.21, Jakarta Composite gained 35.32 points or 0.5% to 7,136.18 and KOSPI was up by 10.20 points or 0.41% to 2,504.48. On the other hand, Shanghai Composite fell 3.40 points or 0.11% to 2,968.90 and Straits Times was down by 0.62 points or 0.02% to 3,076.54.