Indian equity benchmarks continued to trade higher in morning deals, as easing crude oil prices and a positive global technology outlook supported sentiment. Traders took support as S&P Global Ratings retained India’s sovereign rating at ‘BBB’ with a stable outlook, and said that the country is a dynamic and fast-growing economy supported by policy stability and high infrastructure investment. In August last year, the rating agency upgraded India’s long-term sovereign credit rating to ‘BBB’ from ‘BBB-’, marking the first upgrade in 18 years. However, investors remained cautious ahead of Federal Reserve Chairman Kevin Warsh’s speech at the Jackson Hole economic symposium on Friday.
Both Sensex and Nifty were trading higher helped by buying in blue-chip IT, TECK and Banking stocks. However, Capital Goods, Oil & Gas and Power stocks faced pressure. On the global front, Asian markets are trading mostly in green following the broadly positive cues from Wall Street overnight, boosted by technology stocks which mirrored their peers on the tech-heavy Nasdaq, with the gains capped by a spike in crude oil prices that renewed inflation concerns.
The BSE Sensex is currently trading at 77295.61, up by 362.02 points or 0.47% after trading in a range of 77043.34 and 77357.97. There were 23 stocks advancing against 7 stocks declining on the index.
The top gaining sectoral indices on the BSE were IT up by 3.09%, TECK up by 2.14%, Bankex up by 1.11%, Telecom up by 1.01% and Realty up by 0.53%, while Capital Goods down by 0.23%, Oil & Gas down by 0.20%, Power down by 0.19%, Utilities down by 0.15% and Energy down by 0.04% were the top losing indices on BSE.
The top gainers on the Sensex were HCL Technologies up by 3.65%, TCS up by 3.46%, Infosys up by 3.27%, Tech Mahindra up by 3.25% and Titan Company up by 0.95%. On the flip side, Ultratech Cement down by 1.37%, ICICI Bank down by 0.91%, Asian Paints down by 0.42%, Hindustan Unilever down by 0.10% and Bharat Electronics down by 0.10% were the top losers.
Meanwhile, domestic credit rating agency India Ratings has revised its FY27 estimate for bank credit growth to 15 per cent from the earlier projection of 13 per cent, but flagged an impact on profitability as lenders set aside money for transitioning to the expected credit loss system of provisioning. The agency said the upward review on the credit costs front is driven by expectations of a higher proportion of lending to corporates towards working capital requirements, especially on the back of benefits on cash reserve ratio (CRR) on the deposits raised from the diaspora.
It noted tighter bond yields will also make bank borrowings more attractive for non-banking finance companies (NBFCs). The revised projection on credit growth is lower than the current 19.3 per cent year-on-year growth as of July 31. Further, it said banks are likely to face some profitability challenges despite the higher credit growth and the proportion of dud assets being at all-time lows.
It stated banks’ credit costs are expected to increase to 0.74 per cent in FY27 from 0.65 per cent in the previous fiscal due to additional provisioning requirements under the Expected Credit Loss (ECL) framework. Ankit Jain, associate director, India Ratings, said the transition to ECL norms is likely to weigh on the banking sector through a one-time impact on the balance sheet and higher steady-state credit costs, driven by increased Stage 1 and Stage 2 provisioning requirements.
The CNX Nifty is currently trading at 24160.80, up by 69.95 points or 0.29% after trading in a range of 24106.55 and 24188.30. There were 29 stocks advancing against 21 stocks declining on the index.
The top gainers on Nifty were TCS up by 3.65%, HCL Technologies up by 3.60%, Tech Mahindra up by 3.16%, Infosys up by 2.81% and Wipro up by 2.20%. On the flip side, Ultratech Cement down by 1.34%, ICICI Bank down by 0.82%, Grasim Industries down by 0.63%, Eternal down by 0.62% and Cipla down by 0.55% were the top losers.
Asian markets are trading mostly in green; Nikkei 225 surged 341.02 points or 0.52% to 66,473.00, Taiwan Weighted added 359.81 points or 0.78% to 46,335.03, Jakarta Composite gained 27.11 points or 0.41% to 6,548.86, Hang Seng advanced 90.26 points or 0.35% to 25,656.00 and Straits Times rose 14.68 points or 0.26% to 5,698.80.
On the flip side, Shanghai Composite weakened 0.45 points or 0.01% to 3,956.12 and KOSPI dropped 97.89 points or 1.42% to 6,814.48.
