Indian markets remain lower during early afternoon deals

A negative trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading in red, amid negative cues from other Asian markets along with selling at Metal and Consumer Durables counters. Traders failed to get any sense of relief as credit rating agency, India Ratings and Research’s (Ind-Ra) latest report has said that the expected mammoth dividend transfer by the Reserve Bank of India (RBI) to the central government and subsequent spending by the latter, is likely to reduce the ongoing pressure on the banking system deposit accretion and overall rates in the system, a few days after the RBI approving the transfer of Rs 2,10,874 crore as surplus to the government for the accounting year 2023-24.

On the global front, Asian markets were trading lower, as Japan's consumer sentiment decreased more-than-expected in May to the lowest level in seven months. The data from the Cabinet Office showed that the seasonally adjusted consumer confidence index dropped to 36.2 in May from 38.3 in April. Further, this was the lowest score since October 2023, when it was 35.9. The latest survey was conducted on May 15 among 8,400 households.

The BSE Sensex is currently trading at 74102.09, down by 400.81 points or 0.54% after trading in a range of 74004.31 and 74493.55. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.69%, while Small cap index was down by 0.86%.

The few gaining sectoral indices on the BSE were Bankex up by 0.38%, Telecom up by 0.06% and Capital Goods up by 0.01%, while Metal down by 1.79%, Consumer Durables down by 1.50%, Basic Materials down by 1.39%, Healthcare down by 1.06% and Auto down by 1.04% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 0.77%, HDFC Bank up by 0.51%, Bharti Airtel up by 0.48%, SBI up by 0.33% and Kotak Mahindra Bank up by 0.30%. On the flip side, Tata Steel down by 4.62%, Titan down by 2.57%, Power Grid down by 2.41%, Bajaj Finserv down by 2.35% and Nestle down by 2.16% were the top losers.

Meanwhile, a few days after the RBI approving the transfer of Rs 2,10,874 crore as surplus to the government for the accounting year 2023-24, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the expected mammoth dividend transfer by the Reserve Bank of India (RBI) to the central government and subsequent spending by the latter, is likely to reduce the ongoing pressure on the banking system deposit accretion and overall rates in the system. 

According to the report, the mega dividend will give a fillip to central government’s fiscal position, which may lead to additional spending or fiscal consolidation or a combination of both. However, the agency noted that the structural challenges for banks in term of deposit accretion will continue in the medium to long term.

Meanwhile, the transfer of Rs 2,10,874 crore as surplus to the government for the accounting year 2023-24 is more than double of what was budgeted expectation, helping shore up revenue ahead of a new government taking office. The government had budgeted a receipt of Rs 1.02 lakh crore as dividends from the RBI, public sector banks and financial institutions in the interim budget for the fiscal year 2024-25 (April 2024 to March 2025) presented in February this year.

The CNX Nifty is currently trading at 22563.20, down by 141.50 points or 0.62% after trading in a range of 22540.90 and 22705.75. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 0.73%, Bharti Airtel up by 0.49%, HDFC Bank up by 0.44%, SBI up by 0.33% and Kotak Mahindra Bank up by 0.26%. On the flip side, Tata Steel down by 4.68%, Titan down by 2.72%, Power Grid down by 2.58%, Nestle down by 2.55% and Shriram Finance down by 2.39% were the top losers.

All Asian markets were trading lower; Hang Seng declined 300.65 points or 1.63% to 18,176.36, Jakarta Composite plunged 72.85 points or 1.02% to 7,067.38, Shanghai Composite weakened 22.75 points or 0.73% to 3,088.27, Straits Times fell 6.18 points or 0.19% to 3,317.02, KOSPI dropped 41.86 points or 1.59% to 2,635.44, Nikkei 225 slipped 502.74 points or 1.32% to 38,054.13 and Taiwan Weighted lost 298.02 points or 1.39% to 21,364.48.