Benchmarks add some gains in morning deals

Indian equity benchmarks added some gains in morning deals, led by gains in Auto, Consumer Discretionary and Healthcare stocks. Further, a rise in Asian peers after fresh US data signalled a cooling economy, too, supported the sentiment. Domestic sentiments remained up-beat with Commerce Secretary Sunil Barthwal’s statement that the negotiations for the proposed India-UK free trade agreement are at an advanced stage, and both sides are working to iron out differences on the remaining issues. Traders took note of a report by the Centre for Economics and Business Research (CEBR) stating that it has been a remarkable year for equities with the Nifty 50 rallying 22 percent in 2023 and the Sensex gaining 20 percent in the same period. Besides, it said India is currently a $3.7 trillion economy and is expected to grow to about $6 trillion by 2030 and $10 trillion by 2035. It also said as the Indian economy is poised for strong growth, and companies grow in size and scale, there is optimism that the capital markets will continue to boom over the next few years.

The BSE Sensex is currently trading at 72430.37, up by 379.99 points or 0.53% after trading in a range of 72218.10 and 72442.75. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Auto up by 1.96%, Consumer Discretionary up by 1.30%, Healthcare up by 1.23%, Basic Materials up by 1.17% and Metal up by 1.07%, while Utilities down by 0.42%, Power down by 0.30% and FMCG down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.68%, Tata Motors up by 2.47%, Mahindra & Mahindra up by 1.82%, Larsen & Toubro up by 1.77% and Infosys up by 1.34%. On the flip side, Power Grid Corporation down by 2.52%, ITC down by 0.98%, Axis Bank down by 0.18% and NTPC down by 0.07% were the top losers.

Meanwhile, S&P Global Ratings in its latest report has said deposit tightness will remain a system overhang. Its base case is for loan growth to slightly moderate, leading to manageable competition for deposits. Indian banks will have to strike a fine balance between maintaining strong loan growth and paying more for deposits to fund that growth.

It said if the clash for deposits gets fiercer, Indian banks will take a hit, either with slimmer margins or slower growth. It stated credit demand is strong. The economic backdrop is highly conducive to growth. Asset quality is improving, buoyed by a confluence of supportive structural and cyclical factors. All that India's banks are missing is a boom in deposits. As per the report, system-level credit growth to moderate to 14 per cent in 2024-25 (FY25) from about 16 per cent year-on-year growth in the first three quarters of FY24. 

S&P Global Ratings credit analyst Deepali V Seth Chhabria said if credit and deposit growth rates remain steady, a period of deposit competition looms, squeezing bank margins to 2.9 per cent from 3 per cent. Private-sector banks are likely to bear the brunt of the situation, as they are already operating at much higher Loan-to-Deposit Ratio (LDR).  Further. She said adding to the stress on the private-sector banks, the lenders are growing at a much faster pace than public sector banks.

The CNX Nifty is currently trading at 22040.10, up by 129.35 points or 0.59% after trading in a range of 21968.95 and 22041.90. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.32%, Maruti Suzuki up by 2.79%, Bajaj Auto up by 2.62%, Tata Motors up by 2.46% and Mahindra & Mahindra up by 2.03%. On the flip side, Power Grid Corporation down by 2.56%, ONGC down by 1.41%, Apollo Hospital Ent. down by 1.19%, ITC down by 0.97% and Britannia Industries down by 0.65% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 464.18 points or 1.22% to 38,622.12, Hang Seng advanced 297.7 points or 1.83% to 16,242.33, Straits Times rose 44.84 points or 1.41% to 3,221.53, KOSPI increased 33.06 points or 1.26% to 2,646.86 and Jakarta Composite gained 46.02 points or 0.63% to 7,349.30.

On the flip side, Taiwan Weighted lost 24.26 points or 0.13% to 18,620.31.