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Benchmarks magnify gains in morning deals
Jul-26-2024

Indian equity benchmarks extended gains in morning deals, led by gains in Telecom, TECK and Metal stocks. Traders took support with Reserve Bank of India Deputy Governor M Rajeshwar Rao’s statement that Indian financial system looks stronger than in the past and the country's economy is an outlier even as strong headwinds globally. Some support also came with DIPAM Secretary Tuhin Kanta Pandey's statement that the focus of the government will be to improve the performance of CPSEs with a view to maximise wealth creation and not to push disinvestment just to meet targets. He said the market capitalisation of 77 listed public sector entities, which include banks, insurance companies and Central Public Sector Enterprises (CPSEs), has jumped 4 times in the last three years to about Rs 73 lakh crore. Additional support came with private report stating that the FMCG sector is expected to register 6.1 per cent volume growth in the rural market this fiscal. This volume growth in the rural market stood at 4.4 per cent a year ago, while the urban volume growth is likely to remain flat at 4.2 per cent. 

On the global front, Asian markets are trading mostly in green, after data showed the U.S. economy grew at an estimated 2.8 percent annual rate from April through June, double the rate from the prior quarter. Signs of cooling inflation in the world's largest economy also boosted hopes for Fed rate cuts. The upside, however, may remain capped ahead of the June PCE price index data from the U.S. due later in the day that could influence the outlook for interest rates.

The BSE Sensex is currently trading at 80612.24, up by 572.44 points or 0.72% after trading in a range of 80013.60 and 80626.31. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.48%, while Small cap index was up by 0.94%.

The top gaining sectoral indices on the BSE were Telecom up by 3.25%, TECK up by 2.34%, Metal up by 2.31%, IT up by 1.77% and Healthcare up by 1.62%, while banking down by 0.13% were the top losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.70%, Infosys up by 2.72%, Tata Steel up by 2.38%, JSW Steel up by 2.36% and HCL Technologies up by 1.91%. On the flip side, Tech Mahindra down by 1.20%, HDFC Bank down by 1.00%, Nestle down by 0.42%, Tata Motors down by 0.40% and Hindustan Unilever down by 0.36% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has released draft guidelines proposing banks to assign additional liquidity buffers for accounts having internet and mobile banking (IMB) facilities to stave off any risks during times of stress. The draft guidelines follow an announcement by Governor Shaktikanta Das in the April policy review, given the high usage of technological tools in banking that can lead to moving of funds without physically queuing up at bank branches.

It said ‘While increased usage of technology has facilitated the ability to make instantaneous bank transfers and withdrawals, it has also led to a concomitant increase in risks, requiring proactive management’. It stated ‘The draft circular amending the 2014-issued guidelines on Basel-III Framework on Liquidity Standards' Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards.’ The draft suggests banks shall assign an additional 5 per cent run-off factor for retail deposits, which are enabled with IMB facilities, wherein stable retail deposits enabled with IMB shall have 10 per cent run-off factor and less stable deposits enabled with IMB shall have 15 per cent run-off factor.

It added that unsecured wholesale funding provided by non-financial small business customers shall be treated in accordance with the treatment of retail deposits. It also said if a deposit hitherto excluded from LCR computation like a non-callable fixed deposit, is contractually pledged as collateral to a bank to secure a credit facility or loan, such deposit shall be treated as callable for LCR purposes. Apart from this, it proposed that ‘level 1’ high quality liquid assets in the form of government securities shall be valued at an amount not greater than their current market value, adjusted for applicable haircuts in line with the margin requirements under the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF).

The CNX Nifty is currently trading at 24603.65, up by 197.55 points or 0.81% after trading in a range of 24410.90 and 24610.15. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.02%, Divi's Lab up by 3.45%, Cipla up by 2.59%, Infosys up by 2.59% and Shriram Finance up by 2.59%. On the flip side, Tech Mahindra down by 1.22%, HDFC Bank down by 1.02%, ONGC down by 0.98%, Nestle down by 0.63% and Tata Motors down by 0.45% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 28.94 points or 0.17% to 17,033.91, Jakarta Composite gained 36.78 points or 0.51% to 7,277.06, KOSPI increased 18.16 points or 0.67% to 2,728.81 and Nikkei 225 surged 15.84 points or 0.04% to 37,885.35.

On the flip side, Taiwan Weighted lost 768.28 points or 3.36% to 22,103.56, Shanghai Composite weakened 5.51 points or 0.19% to 2,881.23 and Straits Times fell 4.21 points or 0.12% to 3,426.24.
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