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Markets witness some recovery in late afternoon session
Jan-08-2025

Indian markets came off from day’s low points in late afternoon session following some positive cues from European markets. But indices continued to trade in red. Traders took note of report that 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. On the global front, Asian markets were trading mixed as upbeat U.S. economic data released overnight led investors to scale back Fed rate cut bets. Fed Bank of Atlanta President Raphael Bostic said that officials should be cautious with policy decisions, given uneven progress on lowering inflation. European markets were trading mostly in green despite worries about inflation and the outlook for interest rates. The euro hovered near multi-year lows against the dollar as focus shifted to Friday's U.S. payrolls data that could influence the Fed's rate trajectory.

The BSE Sensex is currently trading at 78053.29, down by 145.82 points or 0.19% after trading in a range of 77486.79 and 78319.45. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.08%, while Small cap index was down by 1.10%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.86%, Energy up by 1.59%, Telecom up by 0.38%, Realty up by 0.07% and FMCG was up by 0.05%, while Consumer Durables down by 1.89%, Industrials down by 1.38%, Capital Goods down by 1.25%, Power down by 1.18% and Utilities was down by 0.92% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.09%, Asian Paints up by 1.66%, ITC up by 1.38%, Maruti Suzuki up by 1.02% and Bharti Airtel up by 0.97%. On the flip side, Adani Ports down by 1.77%, Ultratech Cement down by 1.68%, Zomato down by 1.58%, ICICI Bank down by 1.37% and NTPC down by 1.23% were the top losers.

Meanwhile, 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. 

According to the report, the industry is likely to witness incremental higher value-led growth compared to volume, as seen from the disbursals data for both large ticket and affordable housing lenders. Lenders have renewed their focus towards affordable housing and loan against property (LAP), as these segments offer superior risk adjusted margin compared to other segments. 

The report noted that the focus of affordable players remains on turnaround time and deeper penetration in the existing geographies, while large ticket players are focused on customer stickiness and cost of funds to remain competitive in relation to banks. 

It said that there is an increasing trend in the share of the LAP portfolio in the pursuit of higher margins, however asset quality monitoring will remain key. Also, there is increased focus on technology upgradation to bring about process efficiency. Hence, there may be a short-term increase in the operating expenses for few players, but it will play out on operating leverage benefit with rising scale.

The CNX Nifty is currently trading at 23,655.50, down by 52.40 points or 0.22% after trading in a range of 23,496.15 and 23,751.85. There were 22 stocks advancing against 28 stocks declining on the index. 

The top gainers on Nifty were up by ONGC up by 2.96%, Reliance Industries up by 1.97%, Asian Paint up by 1.76%, ITC up by 1.71% and Dr. Reddy's up by 1.52%, while Apollo Hospitals down by 3.34%, Trent down by 3.07%, Bajaj Auto down by 1.98%, UltraTech Cement down by 1.84% and Shriram Finance down by 1.77% were the top losers on Nifty.

Asian markets were trading mixed; Taiwan Weighted lost 243.94 points or 1.04% to 23,407.33, Hang Seng declined 167.74 points or 0.87% to 19,279.84, Nikkei 225 slipped 102.24 points or 0.26% to 39,981.06 and Jakarta Composite was down by 2.93 points or 0.04% to 7,080.35. On the flip side, Shanghai Composite strengthened 0.53 points or 0.02% to 3,230.17, KOSPI increased 28.95 points or 1.15% to 2,521.05 and Straits Times was up by 53.8 points or 1.41% to 3,881.97.

European markets were trading mostly in green; UK’s FTSE 100 increased 14.83 points or 0.18% to 8,260.11 and Germany’s DAX was up by 52.2 points or 0.26% to 20,392.77. On the flip side, France’s CAC fell 8.74 points or 0.12% to 7,480.61.
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