Benchmarks extend losses in morning deals

Indian equity benchmarks extended losses in morning deals, dragged by information technology stocks on weak results from Tech Mahindra. Sentiments remained down beat with provisional data from the NSE showing that Foreign institutional investors (FIIs) maintained selling pressure in the cash segment for six days in a row, offloading shares worth Rs 6,934.93 crore on January 24, 2024. Traders also remained cautious ahead of the expiry of January series F&O contracts. Traders overlooked India Meteorological Department’s (IMD) statement that it expects the persisting El Nino conditions to turn ‘neutral’ prior to the start of monsoon season in June. Neutral El Nino conditions imply that it would not have an adverse impact on the monsoon rains next season. On the global front, Asian markets are trading mostly in green after the improvement in investor sentiment toward China and Hong Kong continues, following the Chinese central bank's latest move to inject liquidity and support asset prices.

The BSE Sensex is currently trading at 70531.75, down by 528.56 points or 0.74% after trading in a range of 70423.66 and 71049.46. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.17%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Utilities up by 1.30%, Realty up by 1.09%, Power up by 0.91%, PSU up by 0.67% and Industrials up by 0.33%, while IT down by 1.11%, Bankex down by 1.02%, TECK down by 1.00%, Consumer Durables down by 0.87% and Healthcare down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.96%, Indusind Bank up by 1.21%, Hindustan Unilever up by 0.53% and Bajaj Finserv up by 0.18%. On the flip side, Tech Mahindra down by 4.82%, Axis Bank down by 2.20%, Sun Pharma Inds. down by 1.61%, HCL Tech. down by 1.33% and ITC down by 1.33% were the top losers.

Meanwhile, rating agency Icra has said that it revised upward its bank credit growth projection at 14.9-15.3 per cent this fiscal, but said the same will lose steam and grow at 12 per cent next fiscal. It said at 14.9-15.3 per cent, the system level credit expansion in absolute terms will be Rs 20.4-20.9 trillion. It stated this will be the highest ever incremental bank credit growth and would surpass the previous high of Rs 18.2 trillion recorded in FY23 at a growth rate of 15.4 per cent.

The agency had earlier estimated a 12.8-13 per cent credit demand for this fiscal. However, citing the rising global headwinds and also the higher base coupled with the challenges in deposit mobilisation, the agency said it expects the rate of incremental credit expansion to slow down to Rs 19-20.5 trillion or 11.7-12.6 per cent in FY25. It added weaker export demand in certain sectors, softer commodity prices, and challenges in deposit mobilisation could temper bank credit growth in FY2025.

Further, the agency estimates corporate bond issuances to reach Rs 9.6-9.9 trillion in FY24, crossing the record level of Rs 8.7 trillion in FY23. Incremental bank credit growth touched nearly Rs 16.9 trillion in the first nine months of FY24 far outpacing the Rs 14.1 trillion expansion in the corresponding period last year. This was driven by the retail segment and non-bank finance companies, with annual growth of 33 per cent and 23 per cent, respectively, as of November 18, 2023.

The CNX Nifty is currently trading at 21316.60, down by 137.35 points or 0.64% after trading in a range of 21287.45 and 21459.00. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.77%, NTPC up by 2.01%, Coal India up by 1.65%, Indusind Bank up by 1.30% and BPCL up by 1.15%. On the flip side, Tech Mahindra down by 4.99%, Axis Bank down by 2.19%, SBI Life Insuran down by 1.88%, Sun Pharma Inds. down by 1.51% and Divi's Lab down by 1.47% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 20.9 points or 0.06% to 36,247.38, Taiwan Weighted added 120.61 points or 0.67% to 17,996.44, Hang Seng advanced 223.03 points or 1.38% to 16,122.90, KOSPI increased 0.52 points or 0.02% to 2,470.21, Jakarta Composite gained 15.45 points or 0.21% to 7,243.27 and Shanghai Composite strengthened 58.06 points or 2.02% to 2,878.83.

On the flip side, Straits Times fell 10.78 points or 0.34% to 3,142.55.