Domestic indices wipe out opening gains to trade lower; HDFC Bank leads gainers

Indian equity benchmarks made optimistic start on Monday as investors reacted to earnings from HDFC Bank, Kotak Mahindra Bank and Tech Mahindra Bank released over the weekend. But soon markets wiped out their gains and slipped below neutral lines to trade with cut of around 0.25% each in early deals. Traders turned concerned as data shared by the Reserve Bank of India (RBI) showed that India's foreign exchange reserves have experienced a notable decline for the second consecutive week, dipping by $10.7 billion to stand at $690 billion as of October 11. Some cautiousness also came as the NCAER-NSE Business Expectations Survey showed that economic activity continued to show dynamism in the second quarter of 2024-25, though at a moderated pace.

On the global front, Asian markets are trading mostly higher with caution, following the broadly positive cues from Wall Street on Friday, as traders trimmed their bets on US Fed interest rate cuts this year amid following the largely upbeat batch of US economic data last week. Persisting worries about geopolitical tensions weighed on the markets. Besides, China lowered its key benchmark lending rates by 25 basis points in the monthly fixing to boost economic growth.

Back home, a group of ministers (GoM), tasked by the Goods and Services Tax (GST) Council to look at taxation of insurance products - has favoured exempting health insurance products for senior citizens and reducing tax to 5%, from 18% now, on products providing health cover up to Rs 5 lakh, sans any input tax credit. In stock specific development, HDFC Bank leading the gainers on the bourses after the bank reported a 5.3% rise in profit year-on-year (Y-o-Y) to Rs 16,821 crore for the second quarter of financial year 2024-25 (Q2FY25), with NII growing 9.9% Y-o-Y to Rs 30,107.9 crore.

The BSE Sensex is currently trading at 81024.87, down by 199.88 points or 0.25% after trading in a range of 81006.94 and 81770.02. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.39%, while Small cap index was down by 0.56%.

The sole gaining sectoral index on the BSE was Realty up by 0.11%, while Oil & Gas down by 1.03%, FMCG down by 1.02%, Auto down by 0.92%, Energy down by 0.92% and TECK down by 0.83% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 2.61%, Tech Mahindra up by 2.19%, Asian Paints up by 1.18%, Axis Bank up by 0.50% and Larsen & Toubro up by 0.24%. On the flip side, Kotak Mahindra Bank down by 4.44%, Indusind Bank down by 2.26%, Bharti Airtel down by 2.08%, Mahindra & Mahindra down by 1.56% and NTPC down by 1.04% were the top losers.

Meanwhile, with the retail inflation is ruling still at high level, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that interest rate cut this stage would have been “premature” and “very very risky”, and he added that future monetary policy action would depend upon the income data and outlook. He said the September inflation was high and the next print too is expected to remain elevated before moderating. 

Refusing to give any indications about rate cuts in future, he said the central bank would take action on the basis of the incoming data and outlook. He also said the Reserve Bank does not act like a policeman, but it maintains tight vigil on the financial market and takes regulatory action whenever necessary.

Earlier this month, the RBI continued to maintain the status quo in the short-term lending interest rate (repo), citing inflationary concerns, though it changed the monetary policy stance to neutral. The next bi-monthly monetary policy will be announced on December 6.

The CNX Nifty is currently trading at 24772.25, down by 81.80 points or 0.33% after trading in a range of 24746.70 and 24978.30. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 2.43%, Tech Mahindra up by 2.29%, HDFC Life Insurance up by 1.56%, Asian Paints up by 1.19% and Wipro up by 0.88%. On the flip side, Tata Consumer Products down by 7.71%, Kotak Mahindra Bank down by 4.45%, BPCL down by 2.48%, Bharti Airtel down by 2.17% and Indusind Bank down by 1.91% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted surged 126.69 points or 0.54% to 23,613.96, Nikkei 225 rose 77.18 points or 0.2% to 39,058.93, Shanghai Composite strengthened 26.76 points or 0.81% to 3,288.32, KOSPI increased 20.96 points or 0.81% to 2,614.78 and Jakarta Composite added 17.62 points or 0.23% to 7,777.68. On the other hand, Hang Seng declined 110.25 points or 0.53% to 20,693.86 and Straits Times fell 17.52 points or 0.48% to 3,622.67.