Domestic indices add more losses in late morning deals

Domestic equity indices added more losses in late morning deals as market participants indulged in reducing their positions. Hectic selling in Mahindra & Mahindra, TCS, HCL, Tata Steel and Ultratech Cement companies’ stocks dragged the markets below their psychological 79,700 and 24,250 levels respectively. Meanwhile, the session was also weak for broader indices. BSE Mid cap index and Small cap index were trading lower in the range of 1.20-1.35%. Traders were cautious as private report said that India consumer price inflation probably edged up in June, snapping five months of declines, largely because of a jump in vegetable prices caused by the damage to crops wrought by extreme weather. On the sectoral front, all the BSE sectoral indices were trading in red led by Auto, Metal, Basic Materials, Consumer Disc and IT. 

On the global front, Asian markets were trading mostly in green after Inflation in China narrowly missed expectations, with the consumer price index posting a 0.2% rise in June, softer than the 0.4% rise expected from street and down from 0.3% in May. Back home, in the stock specific development, RVNL jumped after it received a letter of acceptance from Maharashtra Metro Rail Corporation Limited for the construction of elevated metro stations.

The BSE Sensex is currently trading at 79621.27, down by 730.37 points or 0.91% after trading in a range of 79435.76 and 80481.36. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.23%, while Small cap index down by 1.34%.

The top losing sectoral indices on the BSE were Auto down by 2.01%, Metal down by 1.92%, Basic Materials down by 1.59%, Consumer Disc down by 1.44% and IT down by 1.31%, while there were no gaining indices. 

The top gainers on the Sensex were Maruti Suzuki up by 1.11%, Asian Paints up by 0.34%, Titan up by 0.17%, Bajaj Finance up by 0.14% and Power Grid Corp up by 0.05%. On the flip side, Mahindra & Mahindra down by 6.58%, HCL down by 2.76%, Tata Steel down by 2.07%, TCS down by 1.62% and Ultratech Cement down by 1.45% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) deputy governor Swaminathan J has said that the banking sector, which is at a decadal high in terms of financial parameters, is all set to support the growth of the Indian economy. He also said the RBI has undertaken several initiatives to enhance the effectiveness of the auditing process. These include structured meeting mechanisms between supervisory teams and auditors, introducing exception reporting, streamlining processes for the appointment of auditors, and other measures designed to safeguard the independence of auditors.

RBI deputy governor stated that auditors must apply due rigour in their audit processes to mitigate any potential for divergence, under-provisioning, or non-compliance with statutory and regulatory requirements. Further, he said a critical aspect of the auditor's role is the careful evaluation of internal financial controls over financial reporting. By maintaining meticulous standards and adherence to regulatory guidelines as well as auditing standards, auditors can minimise the need for supervisors to intervene. He also emphasised the need to uphold the highest standards of transparency, diligence, and professionalism to foster trust among stakeholders and ensure the continued resilience of the banking system. 

According to the RBI's latest Financial Stability Report, the bad assets or gross non-performing assets (NPAs) of commercial banks fell to a 12-year low of 2.8 per cent in March 2024 and may go down further to 2.5 per cent by the end of the current fiscal. Scheduled Commercial Banks' (SCBs) gross non-performing assets (GNPA) ratio fell to 2.8 per cent, and the net non-performing assets (NNPA) ratio to 0.6 per cent at the end of March 2024.

The CNX Nifty is currently trading at 24216.30, down by 216.90 points or 0.89% after trading in a range of 24141.80 and 24461.05. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 1.21%, Divi's Lab up by 0.82%, Maruti Suzuki up by 0.81%, Britannia up by 0.76% and SBI Life up by 0.50%. On the flip side, Mahindra & Mahindra down by 6.65%, HCL down by 2.71%, Shriram Finance down by 2.56%, Hindalco down by 2.28% and Tata Steel down by 2.06% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite gained 29.16 points or 0.4% to 7,298.96, Straits Times rose 23.35 points or 0.68% to 3,449.44, KOSPI increased 0.62 points or 0.02% to 2,868.00, Nikkei 225 surged 245.73 points or 0.59% to 41,825.90 and Taiwan Weighted added 99.48 points or 0.42% to 23,999.56. However, Hang Seng declined 10.14 points or 0.06% to 17,513.09, Shanghai Composite weakened 11.99 points or 0.41% to 2,947.38.