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12 jan (2)

Sensex, Nifty hit day’s low; banks drag.

The key equity indices hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, was down 147.14 points or 0.30% to 49,122.18. The Nifty 50 index lost 19.60 points or 0.14% at 14,465.15.

Banks shares tumbled after the Reserve Bank of India (RBI) warned that an expected doubling of bad loans and soaring financial markets in the nation’s weakened economy threaten financial stability.

In the broader market, the S&P BSE Mid-Cap index gained 0.11% while the S&P BSE Small-Cap index shed 0.07%.

The market breadth was positive. On the BSE, 1329 shares rose and 1268 shares fell. A total of 133 shares were unchanged.

President Donald Trump on Monday reportedly approved an emergency declaration for Washington that lasts through January 24, after authorities warned of security threats to President-elect Joe Biden’s inauguration next week.

Bharat Biotech reportedly inked a purchase agreement with the Government of India on January 11 to provide 55 lakh doses of COVID-19 vaccine Covaxin at Rs 295 per dose. The pharma firm will be providing its coronavirus vaccine directly to 12 states, and the process will be completed in two days by January 14. Dispatches will begin from Hyderabad starting January 12. Bharat Biotech will be providing 38.5 lakh doses of the COVID-19 vaccine in stage 1 and 16.5 doses in stage 2.

Buzzing Index:

The Nifty Bank index slipped 0.49% to 31,843. The index has lost 0.75% in two sessions.

Bandhan Bank (down 3.05%), IndusInd Bank (down 2%), Kotak Mahindra Bank (down 1.61%), ICICI Bank (down 0.84%) and RBL Bank (down 0.57%) declined.

Meanwhile, IDFC First Bank (up 2.25%), Bank Of Baroda (up 0.70%) and HDFC Bank (up 0.45%) bucked the trend.

The Reserve Bank of India (RBI) Governor Shaktikanta Das, in his foreword for the financial stability report released on Monday, said:Stretched valuations of financial assets pose risks to financial stability. Banks and financial intermediaries need to be cognizant of these risks and spillovers in an interconnected financial system.

The financial stability report has also warned that banks’ bad loans may double by September 2021. The RBI sees gross bad loans account for 13.5% of total loans by September even in a base case scenario.

The RBI expects banks’ capital ratios will erode to 14% in September from 15.6% in September 2020, the report showed. This may worsen to 12.5% in a very severe stress scenario, under which nine banks may fall short of meeting the minimum capital requirement of 9%.

Stocks in Spotlight:

GAIL (India) advanced 3.61% to Rs 140.60. The natural gas distributor said that a meeting of the board of directors of the company is scheduled on 15 January 2021, to consider buyback of the equity shares.

Sunteck Realty rose 1.24% to Rs 375.50. The real estate developer said it saw a robust growth in pre-sales for Q3 December 2020 at Rs 349 crore. The company’s pre-sales have grown by 75% quarter on quarter (QoQ) and increased 7% year on year (YoY) in Q3 December 2020. Collections grew at 79% QoQ and surged by 52% YoY to Rs 252 crore in Q3 December 2020.

IndiaMART InterMESH gained 1.19% to Rs 8086. The e-commerce company said that its board will meet on 18 January 2020 to consider raising funds via the equity route. On the same day, the board will also consider the audited financial results for the quarter and nine months ended 31 December 2020.

Investment & trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.

CapitalStars Investment Adviser: SEBI Registration Number: INA000001647.

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