Domestic indices maintain gains in late morning deals

Domestic equity indices maintained their gains in late morning deals as market participants indulged in enlarging their positions. Meanwhile, broader indices outperformed their larger peers with BSE Mid cap index and Small cap index gaining in the range of 1.50-1.70%.  Positive cues from global markets and falling crude oil prices support domestic sentiment. Sentiments remained upbeat as Labour Ministry report showed that retail inflation for industrial workers slipped to 3.67 per cent in June from 3.86 per cent in the previous month this year mainly due to lower prices of certain food items. Real estate industry related stocks were in focus on reports that the government will amend the long-term capital gains tax (LTCG) rules proposed in the Budget. Under the new LTCG regime, the tax rate is set at 12.5 per cent without the benefit of indexation. Conversely, the old regime imposes a 20 per cent tax but allows for indexation benefits. 

On the global front, Asian markets were trading higher following positive cues from the US markets overnight. Traders took a note of report that Bank of Japan Deputy Governor Uchida Shinichi said the Bank needs to maintain monetary easing with the current policy interest rate for the time being, with developments in financial and capital markets at home and abroad being extremely volatile. Back home, on the sectoral front, all the sectoral indices on the BSE were trading higher led by Oil & Gas, Energy, Metal, PSU and Capital Goods.  

The BSE Sensex is currently trading at 79218.41, up by 625.34 points or 0.80% after trading in a range of 79106.28 and 79639.20. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.67%, while Small cap index up by 1.53%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.24%, Energy up by 2.77%, Metal up by 2.68%, PSU up by 2.02% and Capital Goods up by 1.95%, while there were no losers.

The top gainers on the Sensex were Adani Ports up by 2.80%, JSW Steel up by 2.54%, Ultratech Cement up by 1.88%, Maruti Suzuki up by 1.81% and Mahindra & Mahindra up by 1.66%. On the flip side, Indusind Bank down by 1.33%, Asian Paints down by 0.49%, Titan down by 0.40%, ICICI Bank down by 0.26% and Bharti Airtel down by 0.20% were the top losers.

Meanwhile, Minister of State for Finance Pankaj Chaudhary has said that banks have written off loans worth Rs 9.90 trillion in the last five financial years. During 2023-24, banks loan write off was at Rs 1.70 trillion, as against Rs 2.08 trillion in the previous fiscal. Write-off was highest at Rs 2.34 trillion during 2019-20, which came down to Rs 2.02 trillion in the following year and to Rs 1.74 trillion in 2021-22. 

He said as per the RBI guidelines and policy approved by banks' boards, NPAs, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit and optimise capital, in accordance with the said guidelines and policies of the respective boards. Such write-off does not result in waiver of liabilities of borrowers to repay and therefore, write-off does not benefit the borrowers. The borrowers of written-off loans continue to be liable for repayment and banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available to them. 

The minister said against Rs 9.9 trillion write-off, recovery was to the tune of Rs 1.84 trillion, or just 18 per cent of total write-off during the last 5 years. As per the Reserve Bank of India (RBI) data, he said gross NPAs (GNPA) of Scheduled Commercial Banks (SCBs) was Rs 8,96,082 crore (GNPA ratio of 8.21 per cent) as on March 31, 2020, Rs 8,35,051 crore (GNPA ratio of 7.33 per cent) as on March 31, 2021, Rs 7,42,397 crore (GNPA ratio of 5.82 per cent) as on March 31, 2022. It further came down to Rs 5,71,544 crore (GNPA ratio of 3.87 per cent) as on March 31, 2023 and to Rs 4,80,687 crore (GNPA ratio of 2.75 per cent) as on March 31, 2024 (provisional data). He added that it indicates that gross NPAs in SCBs have been declining over the past five years. 

The CNX Nifty is currently trading at 24222.40, up by 229.85 points or 0.96% after trading in a range of 24184.90 and 24337.70. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were ONGC up by 6.62%, Coal India up by 4.71%, BPCL up by 2.76%, JSW Steel up by 2.61% and Adani Ports up by 2.57%. On the flip side, Indusind Bank down by 1.54%, Eicher Motors down by 0.74%, Asian Paints down by 0.42%, Bharti Airtel down by 0.32% and Titan down by 0.31% were the top losers.

All Asian markets were trading higher; Hang Seng advanced 317.68 points or 1.91% to 16,965.02, Jakarta Composite gained 88.7 points or 1.23% to 7,217.92, Shanghai Composite strengthened 18.18 points or 0.63% to 2,885.46, Straits Times rose 59.52 points or 1.86% to 3,257.96, KOSPI increased 40.93 points or 1.62% to 2,563.08, Nikkei 225 surged 271.32 points or 0.78% to 34,946.78 and Taiwan Weighted added 766.83 points or 3.61% to 21,267.85.