Benchmarks recover marginal losses in late morning trade

Benchmarks recovered after initial weakness in late Morning trade mainly buying in metal, realty, auto and consumer durable sectors, on the back of persistent foreign capital inflows. However, Sentiments got dampened as the rupee weakened in early trades due to importers rushing to cover up their near term requirements ahead of the US debt payment deadline. The rupee was quoting at Rs 62.22 compared with previous close of Rs 61.94 per dollar. Investors remained concerned as the International Monetary Fund, after a day of lowering its growth forecast for India, said that the country’s fiscal deficit is expected to increase to 8.5 percent of the GDP this financial year, mainly due to the downward revision in GDP growth, depreciation of rupee and higher global oil prices.

On the global front, Asian equity benchmarks were trading in the mixed at this point of time with Japanese Nikkei trading higher by over half a percent after core machine orders in Japan increased a seasonally adjusted 5.4 percent in August compared to the previous month. The US markets got some respite on Wednesday, but the major indices made a mixed closing as the trades remained choppy.

Back home, traders were buying, Metal, Realty and Auto while selling was seen in Bankex, and Oil & Gas on the BSE. The market breadth on BSE remains positive with advances to declines in the ratio of 1067: 530. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,000 and 6,000 levels respectively. 

The BSE Sensex is currently trading at 20221.21, down by 28.05 points or 0.14% after trading in a range of 20323.77 and 20211.79. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.74% and Small cap index gained 0.58%.

The top gaining sectoral indices on the BSE were, Metal up by 1.17%, Realty up by 0.97%, Auto up by 0.87%, Consumer Durables up by 0.54% and PSU up by 0.34%, while Bankex down by 0.60% and Oil & Gas down by 0.39% were the only losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 1.93%, SSLT up by 1.87%,  Jindal Steel up by 1.67%, Mahindra & Mahindra up by 1.34% and Maruti Suzuki up by 1.32%. On the flip side, HDFC Bank was down by 1.32%, ICICI Bank  was down by 1.03%, Sun Pharma  was down by 0.85%, RIL was down by 0.80%  and  Tata Power down by 0.70% were the top losers on the Sensex

Meanwhile, Giving respite to Non-banking finance companies (NBFCs) waiting for banking licences, the Resserve Bank of India (RBI) Deputy Governor K C Chakrabarty said that NBFCs have advantage over other applicants for banking licences as they already have good customer base. Meanwhile, Chakrabarty added that a separate committee has been appointed to award licences and is considering various factors to choose appropriate applications for new banking licences.

The central bank has received 26 applications for new banking licence including NBFCs and various large corporates such as Tata Group, Reliance Capital and L&T Finance among others. Earlier, in February, the RBI issued final guidelines that would govern the new set of proposed banks. As per the guidelines, banks should have a minimum equity capital of around Rs 5 billion and not have foreign ownership of more than 49% for the first five years of operation. The rules also require that one out of every four branches opened by the new banks should be located in rural areas.

The government has planned to enhance the penetration level of Indian banking industry as it plays an important role in the economic development of the country and is the most dominant segment of the financial sector. Banks help channel savings to investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns. The Indian banking industry’s contribution to GDP moves along with growth in the Indian economy.

The CNX Nifty is currently trading at 6,005.65 down by 1.80 points or 0.03% after trading in a range of 6,031.80 and 5,997.75. There were 31 stocks advancing against 18 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Ranbaxy up by 3.02%, Asian Paint up by 2.29%, NMDC up by 2.20%, Tata Steel up by 1.81% and SSLT up by 1.79%. On the flip side, HDFC Bank down by 1.32%, ICICI Bank down by 1.23%, Sun Pharmaceuticals down by 0.95%, Reliance Industries down by 0.76% and Tata Power down by 0.70% were the major losers on the index.

Asian equity indices were trading in mix; Jakarta Composite strengthened 28.41 points or 0.64% to 4,485.85, KLSE Composite rose 5.68 points or 0.32% to 1,774.80, Nikkei 225 surged 133.06 points or 0.95% to 14,170.90, Straits Times added 10.12 points or 0.32% to 3,164.96 and On the flip side, Shanghai Composite declined 19.57 points or 0.88% to 2,192.20, Hang Seng was down by 189.46 points or 0.82% to 22,844.51and Seoul Composite down by 2.82 points or 0.14% to 1,999.94.

Taiwan Weighted remained closed for the trade today.