Benchmark continue to trade lower in late morning deals

Indian equity benchmarks continued to trade lower in late morning deals, pulled down by Metal, IT and TECK stocks and weak trends from global markets. Sentiments remained down-beat with the HSBC India Manufacturing PMI survey, conducted by S&P Global, showed India’s manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, was recorded at an 18-month low of 54.9 in December as against 56.0 in November. Despite the fall, the HSBC India Manufacturing PMI was indicative of a marked improvement in the health of the sector. It also showed the sector still expanding strongly in December despite a loss of growth momentum. Traders overlooked a private report projecting a much lower current account deficit which is likely to print at 1 per cent for this fiscal, leaving the balance of payment surplus at $39 billion, as the country's external balances are stronger than expected on the back of strong inflows. On the global front, Asian markets are trading lower as Fed rate cut optimism faded and investors looked for cues from this week's Fed minutes and U.S. jobs data. 

The BSE Sensex is currently trading at 71522.10, down by 370.38 points or 0.52% after trading in a range of 71442.23 and 71862.00. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.05%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were Utilities up by 1.33%, Power up by 1.00%, Telecom up by 0.75%, Oil & Gas up by 0.73% and FMCG up by 0.49%, while Metal down by 2.04%, IT down by 1.97%, TECK down by 1.53%, Auto down by 0.66% and Basic Materials down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.70%, Bharti Airtel up by 0.91%, SBI up by 0.59%, Axis Bank up by 0.39% and Indusind Bank up by 0.33%. On the flip side, JSW Steel down by 3.10%, Wipro down by 2.46%, Infosys down by 2.29%, Tech Mahindra down by 2.25% and TCS down by 2.04% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in the draft guidelines on dividend declaration has proposed allowing banks having net non-performing assets (NPAs) ratio of less than 6 per cent to declare dividends.  As per the prevailing norms last updated in 2005, banks need to have a NNPA ratio of up to 7 per cent to become eligible for declaration of dividends.

It said the guidelines have been reviewed in the light of implementation of Basel III standards, the revision of the prompt corrective action (PCA) framework, and the introduction of differentiated banks. The central bank has proposed that the new guidelines should come into effect from FY25 onwards.

The draft lays down directions need to be followed by banks’ boards while considering proposals of dividend payouts, which include consideration on divergence in classification and provisioning for NPAs as well. Further, it stated a commercial bank should have a minimum total capital adequacy of 11.5 per cent to be eligible for declaring dividend, while the same for a small finance bank and payment banks has been set at 15 per cent, and 9 per cent for local area banks and regional rural banks.

The CNX Nifty is currently trading at 21558.50, down by 107.30 points or 0.50% after trading in a range of 21538.75 and 21677.00. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 3.74%, Adani Ports &SEZ up by 2.00%, ITC up by 1.70%, BPCL up by 1.23% and Bharti Airtel up by 0.96%. On the flip side, Hindalco down by 3.19%, JSW Steel down by 3.13%, LTIMindtree down by 2.54%, Wipro down by 2.49% and Tech Mahindra down by 2.30% were the top losers.

Asian markets are trading lower; Taiwan Weighted lost 299.55 points or 1.68% to 17,554.21, Hang Seng declined 160.02 points or 0.95% to 16,628.53, Straits Times fell 22.12 points or 0.68% to 3,207.83, KOSPI dropped 55.87 points or 2.09% to 2,613.94, Jakarta Composite plunged 26.01 points or 0.36% to 7,297.58 and Shanghai Composite weakened 5.73 points or 0.19% to 2,956.55.