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Benchmarks extend gains in morning deals
Apr-29-2024

Indian equity benchmarks extended gains in morning deals, buoyed by gains in their Asian peers. Easing geopolitical woes and strong corporate earnings have also aided sentiments on Dalal Street.  Sentiments remained up-beat as S&P Global Ratings in the Asia-Pacific 2Q 2024 Banking Update stated that Indian banks' credit growth, profitability and asset quality would remain robust in current fiscal reflecting strong economic growth, but they may be compelled to slow down their loan growth as deposits are not growing at a similar pace. Some support also came as private report estimates India's GDP growth at 6.6 per cent in the current fiscal helped by consumption expenditure, exports rebound and capital flows. It said the rapid growth of the middle-income class has led to rising purchasing power and even created demand for premium luxury products and services. On the global front, Asian markets are trading mostly in green as traders reacted to upbeat US inflation data and a drop in treasury yields, which may have helped mitigate any negative response to the inflation data.

The BSE Sensex is currently trading at 74225.37, up by 495.21 points or 0.67% after trading in a range of 73922.34 and 74244.51. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Bankex up by 1.18%, Oil & Gas up by 1.17%, Energy up by 0.89%, Utilities up by 0.61% and Metal up by 0.42%, while Realty down by 1.22%, Healthcare down by 0.28%, IT down by 0.15%, Auto down by 0.11% and TECK down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.51%, ICICI Bank up by 2.23%, Kotak Mahindra Bank up by 1.80%, Tech Mahindra up by 1.61% and Tata Steel up by 1.60%. On the flip side, HCL Technologies down by 5.68%, ITC down by 0.53%, Wipro down by 0.46%, Bajaj Finserv down by 0.25% and Mahindra & Mahindra down by 0.11% were the top losers.

Meanwhile, S&P Global Ratings in the Asia-Pacific 2Q 2024 Banking Update has said that Indian banks' credit growth, profitability and asset quality would remain robust in current fiscal reflecting strong economic growth, but they may be compelled to slow down their loan growth as deposits are not growing at a similar pace.

S&P Global Ratings Director SSEA Nikita Anand said the agency expects the sector's strong credit growth to moderate to 14 per cent in FY25, from 16 per cent in FY24, if deposit growth, especially retail deposits, remain tepid. Anand said there is a deterioration in loan-to-deposit ratio in every bank, with loan growth being 2-3 percentage points higher than deposit growth.

She stated ‘We expect banks to bring down their loan growth in FY25 and bring it in line with deposit growth. If banks do not do that, they would be paying higher to get wholesale funding, which will impact profitability.’ Generally, loan growth has been led by private sector banks which see around 17-18 per cent growth, public sector banks on the other hand see loan growth in the range of 12-14 per cent.

She said Indian banks can support loan growth of as high as 15-20 per cent over three years without need for raising capital. The loan growth is 2-3 percentage points higher than deposit growth of the banking sector.

The CNX Nifty is currently trading at 22517.65, up by 97.70 points or 0.44% after trading in a range of 22441.90 and 22532.50. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.52%, ICICI Bank up by 2.13%, Kotak Mahindra Bank up by 1.78%, BPCL up by 1.77% and Tata Steel up by 1.69%. On the flip side, Apollo Hospital Ent. down by 6.30%, HCL Technologies down by 5.80%, Bajaj Auto down by 1.83%, HDFC Life Insurance down by 1.61% and LTIMindtree down by 1.15% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted added 327.88 points or 1.63% to 20,448.39, Hang Seng advanced 226.98 points or 1.27% to 17,878.13, KOSPI increased 24.46 points or 0.92% to 2,680.79, Jakarta Composite gained 66.72 points or 0.95% to 7,102.80 and Shanghai Composite strengthened 24.65 points or 0.79% to 3,113.29. 

On the flip side, Straits Times fell 7.42 points or 0.23% to 3,272.68.
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