Indian equity benchmarks erased initial gains and were trading flat with negative bias in morning deals, amid weak cues from other Asian markets. Traders took a note of Care Ratings’ report stated that the weighted average cost for borrowing across the states and maturities has risen to a two-month high of 6.91 per cent, up 6 basis points (bps) over the past week. According to the report, the rise in the yields of state bonds follows the uptick in yields of government securities (G-Secs) in recent days. However, losses were limited as ratings agency Moody’s has upgraded outlook on the Government of India’s ratings to ‘stable’ from ‘negative’, and affirmed India’s sovereign rating. The sovereign rating by Moody’s stands at ‘Baa3’- which is the lowest investment grade, just a notch above junk status. Sectorally, sugar industry’s stocks remained in watch as All India Sugar Trade Association (AISTA) said sugar mills exported an estimated record 7.23 million tonne in the 2020-21 marketing year that ended September 30, with maximum shipments to Indonesia. On the global front, Asian markets were trading mostly in red after an overnight rebound in US and European stocks as investors shrugged off worries about a potential US government debt default, while oil paused near new multi-year highs.
The BSE Sensex is currently trading at 59741.84, down by 3.04 points or 0.01% after trading in a range of 59611.34 and 59942.00. There were 9 stocks advancing against 21 stocks declining on the index.
The broader indices were trading mixed; the BSE Mid cap index fell 0.12%, while Small cap index was up by 0.36%.
The top gaining sectoral indices on the BSE were Bankex up by 0.53%, Oil & Gas up by 0.50%, PSU up by 0.45%, Utilities up by 0.27%, Power up by 0.22% while, Metal down by 0.87%, Healthcare down by 0.59%, Consumer Durables down by 0.53%, IT down by 0.40%, TECK down by 0.37% were the losing indices on BSE.
The top gainers on the Sensex were HDFC Bank up by 1.14%, HDFC up by 0.93%, Axis Bank up by 0.86%, SBI up by 0.60% and ICICI Bank up by 0.27%. On the flip side, HCL Technologies down by 1.16%, Titan Company down by 1.13%, Tech Mahindra down by 1.05%, Tata Steel down by 0.92% and Indusind Bank down by 0.74% were the top losers.
Meanwhile, ahead of the fourth monetary policy review when the market fears RBI may begin to normalise the easy money policy by sucking out liquidity from the system, Care Ratings in its latest report has said that the weighted average cost for borrowing across the states and maturities has risen to a two-month high of 6.91 per cent, up 6 basis points (bps) over the past week.
According to the report, the rise in the yields of state bonds follows the uptick in yields of government securities (G-Secs) in recent days. It noted that G-Sec yields have moved upwards following the rise in US treasury yields coupled with the rise in crude prices, raising concerns over the outflow and funds from the domestic debt markets, while the increase in crude prices once again raises inflationary worries. It further said as many as 17 states raised Rs 22,809 crore at the weekly auctions held on October 5, the first auction of the second half of the borrowing season. It added that this was Rs 55 crore over the notified amount as Gujarat accepted an additional Rs 500 crore, while Punjab accepted only Rs 55 crore of the notified Rs 500 crore.
The report has stated that the borrowing by most states so far is 12 per cent lower than the comparable period last fiscal, as 27 states and two UTs have so far raised Rs 3.32 lakh crore as against Rs 3.76 lakh crore in the corresponding period of FY21 by 28 states and two UTs. This is also 10 per cent lower than the indicated auction amount.
The CNX Nifty is currently trading at 17817.35, down by 4.95 points or 0.03% after trading in a range of 17777.65 and 17884.60. There were 18 stocks advancing against 32 stocks declining on the index.
The top gainers on Nifty were UPL up by 3.60%, ONGC up by 2.17%, Tata Consumer Product up by 1.60%, BPCL up by 1.50% and Britannia Industries up by 1.49%. On the flip side, SBI Life Insurance down by 1.66%, Hindalco down by 1.64%, Coal India down by 1.29%, HCL Technologies down by 1.18% and Titan Co down by 1.17% were the top losers.
Asian markets were trading mostly in red; Nikkei 225 slipped 330.24 points or 1.19% to 27,491.88, Hang Seng decreased 111.16 points or 0.46% to 23,992.99, Taiwan Weighted dropped 110.94 points or 0.67% to 16,349.81 and KOSPI fell 40.16 points or 1.36% to 2,922.01.
On the flip side, Straits Times advanced 8.30 points or 0.27% to 3,076.42 and Jakarta Composite soared 126.55 points or 2.01% to 6,414.60.
