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Weak trade persists over Dalal Street in early noon
Jan-08-2025

A weak trade continued over the Dalal Street in early afternoon session, with both Sensex and Nifty falling over half a percent each, on the back of mixed cues from other Asian markets along with heavy selling at Consumer Durables and Power counters. Sentiments were negative, amid a private report stating that exporters and freight agencies raised the issue of high terminal handling charges at ports and low usage of dry ports or inland container depots, which add to the overall logistics costs.

On the global front, Asian markets were trading mixed, as Japan's consumer sentiment decreased unexpectedly at the end of the year. The survey data from the Cabinet Office showed that the seasonally adjusted consumer confidence index weakened to 36.2 in December from 36.4 in November. The latest survey was conducted on December 15 among 8,400 households.

Back home, housing finance companies stocks were in watch, as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral sector outlook for housing finance companies (HFCs), amid increased property prices and inflationary pressures which may impact the sales momentum in 2HFY25. 

The BSE Sensex is currently trading at 77534.45, down by 664.66 points or 0.85% after trading in a range of 77486.79 and 78319.45. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 1.81%, while Small cap index was down by 1.54%.

The only gaining sectoral indices on the BSE were Oil & Gas up by 0.81% and Energy up by 0.74%, while Consumer Durables down by 3.46%, Power down by 1.94%, Industrials down by 1.71%, Consumer Disc down by 1.63% and Utilities down by 1.57% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.52%, ITC up by 0.52%, Maruti Suzuki up by 0.31% and TCS up by 0.04%. On the flip side, Titan down by 3.10%, Zomato down by 2.65%, Adani Ports & SEZ down by 2.63%, SBI down by 2.27% and Tech Mahindra down by 1.97% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that Indian banks’ profitability is expected to moderate further in FY26 with an expectation of rising slippages and higher credit costs over the FY24 levels which was at decadal lows. It said a bulk of the asset quality stress will emanate from the unsecured retail exposure. It stressed that the same is ‘manageable’ and will not have any systemic ramifications.

The agency said the under Rs 50,000 retail unsecured portion accounts for around 0.4 per cent of the banking credit, while only 3.6 per cent of the advances are the ones having a lending rate of over 11 per cent. It said that credit growth has lost steam, and sharply revised down its FY25 system credit growth estimate to 13-13.5 per cent as against 15 per cent earlier, and also added that the core interest income is likely to be hit in the next fiscal.

According to the report, banks' net interest margin (NIM) will narrow by 0.10 per cent in the new fiscal due to a transmission of past hikes, higher slippages and a change in accounting policies. The gap between credit and deposit growth, which has moderated lately, is likely to narrow in FY26, the agency believes. It noted that other challenges for the sector include the introduction of new norms on project finance which may require higher provisioning, liquidity coverage ratio under which lower proportion of liabilities may be available for lending and a transition to expected credit loss framework.

The agency has maintained its rating and outlook on banks, non-bank finance companies and housing finance companies, but tweaked the outlooks on certain asset segments due to the heightened stress possibilities. On microfinance, it said the issues are cyclical in nature and pegged the assets under management (AUM) growth to come at 5 per cent in FY25 and improve to 12 per cent in FY26. 

The CNX Nifty is currently trading at 23,539.25, down by 168.65 points or 0.71% after trading in a range of 23637.80 and 23795.20. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were up by ONGC up by 2.08%, Dr. Reddy's up by 1.76%, Reliance Industries up by 1.72%, ITC up by 0.88% and BPCL up by 0.88%, while Shriram Finance down by 3.74%, Trent down by 3.40%, Apollo Hospitals down by 2.74%, Titan down by 2.73% and Adani Ports down by 2.60% were the top losers.

Asian markets were trading mixed; Hang Seng declined 196.4 points or 1.01% to 19,251.18, Jakarta Composite plunged 6.54 points or 0.09% to 7,076.74,Nikkei 225 slipped 102.24 points or 0.26% to 39,981.06 and Taiwan Weighted lost 243.94 points or 1.04% to 23,407.33, while Shanghai Composite strengthened 1.03 points or 0.03% to 3,230.67, Straits Times rose 38.57 points or 1.01% to 3,866.74 and KOSPI increased 28.95 points or 1.15% to 2,521.05.
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