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23
February 2017
I had mentioned in Wednesday’s closing report
that Nifty, Sensex were still trending higher but short-term risks were rising.
The major indices of the Indian stock markets were range-bound on Thursday and
closed with small gains over Wednesday’s close. The trends of the major indices
in the course of Thursday’s trading are given in the table below: The Total Investment & Insurance
Solutions
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| Major Indices (The Total Investment & Insurance Solutions) |
Indian
equities markets on Thursday closed on a flat-to-positive note, with the
telecom sector stocks witnessing healthy buying following a major acquisition
announcement by telecom major Bharti Airtel. Despite a volatile trade session
on the back of derivatives expiry, the benchmark index Nifty touched its
52-week high during the intra-day trade. The key indices pared most of their
initial gains to close marginally in the green, as healthy buying was witnessed
in IT, Teck (technology, media and entertainment) and consumer durables stocks.
The BSE market breadth was tilted in favour of the bulls -- 1,315 advances and
1,283 declines. On the NSE, there were 660 advances, 978 declines and 70
unchanged. The Total Investment &
Insurance Solutions
Global
credit rating agency Moody's Investors Service on Thursday said continuing to
increase non-watch list Non-Performing Loans (NPLs) would put pressure on Axis
and ICICI banks' credit profiles. On the other hand, asset quality trends for
public sector banks were more benign, and the pace of deterioration was slowed
in the past two quarters from the levels seen in FY2016, Moody's said. In
its report 'Banks - India: Q3 Earnings Highlight Pressures from Demonetisation;
NPL trends mixed', Moody's said: "Both of Axis Bank Ltd (Baa3 positive,
baa3) and ICICI Bank Limited's (ICICI, Baa3 positive, baa3) have seen
significant additions to their NPLs from outside of their already announced
watchlist accounts. "While we have been expecting asset quality to
deteriorate for both, we had expected the deterioration to come predominantly
from their watchlist accounts. A continuation of increasing the non-watchlist
NPL trend would put negative pressure on the banks' credit profiles,"
Moody's said. According to Moody's, asset quality for private sector banks was
likely to deteriorate. Increased NPLs from outside the watchlists of Axis Bank
and ICICI Bank are pressuring their credit profiles. The earnings of Indian
banks during the third quarter of the current fiscal show that the demonetisation
of old Rs 500 and Rs 1,000 notes have slowed down economic activity and demand
for credit, the agency said. "Overall, demonetisation has significantly
impacted credit demand and deposit growth, but the effect on asset quality has
been mixed, while retail payment systems -- such as card transactions and
mobile wallets -have benefitted," Srikanth Vadlamani, Moody's Vice
President and Senior Credit Officer said. According to Moody's, economic growth
seems to be recovering from demonetisation, although gradually, which should
cushion the impact on the banks' overall asset quality. The rating agency also
said deposit growth for the banks would be around one-two per cent due to
demonetisation as the increase would moderate going forward. Retail payment systems
such as a cards and mobile wallets have seen a significant increase in
transactions, and should continue to see healthy growth. At the same time,
given the low base, cash will remain the dominant source of retail transactions
for the foreseeable future, Moody's said. Net interest margins would also come
under pressure as banks gradually adopt the marginal cost of funds lending rate
(MCLR) to price their loans. So far, less than 20% of the banks' variable-rate
loans have been repriced to MCLR as opposed to their base rate. As the MCLR is
around 85 basis points (bps) lower than base rate, Moody's expect the downward
trend in net interest margins to persist. Axis Bank shares closed at Rs527.65,
up 0.61% on the BSE. ICICI Bank shares closed at Rs284.45, down 0.52% on the
BSE.
Automobile
major Tata Motors on Thursday said it is considering to raise Rs 500 crore
through issuance of unsecured redeemable non-convertible debentures (NCDs).
According to the automobile major, the move to issue the NCDs is in accordance
with the approval of the shareholders which was obtained by a special
resolution at the 71th Annual General Meeting (AGM) held on August 9, 2016, and
the resolution of the Board of Directors passed at its meeting held on February
14, 2017. Tata Motors shares closed at Rs462.00, up 0.40% on the BSE. The Total Investment & Insurance
Solutions
The
Board of software major Infosys Ltd on Thursday approved pay revision of its
Chief Operating Officer (COO) and whole-time Director UB Pravin Rao. In a regulatory
filing to the BSE, the IT major also said that the Board had recommended the
appointment of Additional Director DN Prahlad for the approval of the
shareholders through a resolution as an Independent Director. "Prahlad was
appointed Additional Director at the Board meeting on October 14, 2016,"
said the filing. The Board also recommended adoption of new Articles of
Association of the company in conformity with the Companies Act 2013, to the
shareholders for approval. Infosys shares closed at Rs1009.05, up 1.73% on the
BSE.
While
the RBI's six-member monetary policy committee (MPC) was unanimous in its
concern about inflation when holding rates in February, four of them backed the
need to shift the central bank's policy stance to "neutral" from
"accommodative", the minutes of the MPC meeting released on Wednesday
showed. The Reserve Bank of India at its sixth and final monetary policy review
of the fiscal earlier this month kept its short term lending rate for
commercial banks unchanged at 6.25 per cent, while changing its policy stance
from "accommodative" to "neutral". "While pursuing 4
per cent CPI (consumer price index) headline inflation, it is necessary to
adopt a calibrated approach so as to minimise the collateral costs of achieving
the target as well as ensure its durability," said RBI governor Urjit
Patel as per the minutes released. "By shifting the stance of monetary
policy from accommodative to neutral, there will now be sufficient flexibility
to move the policy rate in either direction, depending on future data outcomes
and projections, to help ensure that inflation is brought closer to 4%,"
he said. Inflation and interest rates have an important bearing on the trends
of the major indices in the Indian stock markets.
The top
gainers and top losers of the major indices are given in the table below:
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Top Gainer (The Total
Investment & Insurance Solutions)
The
closing values of the major Asian indices are given in the table below:The Total Investment & Insurance
Solutions
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| Asian Indices (The Total Investment & Insurance Solutions) |
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