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  • Mid-Session - Detailed News
Indices trade near day's low; banks tumble
22-Jul-19   12:21 Hrs IST

Key equity barometers were trading near the day's low in early afternoon trade. Weakness in banks shares put pressure on bourses. At 12:21 IST, the barometer index, the S&P BSE Sensex, was down 345.09 points or 0.90% at 38,991.92. The Nifty 50 index was down 90.70 points or 0.79% at 11,328.55.

The S&P BSE Mid-Cap index was down 0.76%. The S&P BSE Small-Cap index was down 1.31%.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 609 shares rose and 1634 shares fell. A total of 112 shares were unchanged.

Metal shares mostly rose. Vedanta (up 4.13%), Hindustan Zinc (up 2.68%), Steel Authority of India (up 2.02%), Hindalco Industries (up 1.61%), Jindal Steel & Power (up 1.26%), JSW Steel (up 1.12%) and Tata Steel (up 0.13%) advance.

NMDC (down 2.13%), Hindustan Copper (down 1.66%) and National Aluminium Company (down 0.44%) declined.

Most public sector bank stocks fell. Central Bank of India (down 2.11%),Bank of Maharashtra (down 2.01%), Andhra Bank (down 1.8%), IDBI Bank (down 1.76%), Indian Bank (down 1.38%), United Bank of India (down 1.22%), Punjab National Bank (down 0.48%), Punjab & Sind Bank (down 0.41%), Corporation Bank (down 0.4%), State Bank of India (down 0.34%), Syndicate Bank (down 0.27%)and Bank of Baroda (down 0.17%) declined.

Union Bank of India (up 1.08%), Allahabad Bank (up 0.61%), UCO Bank (up 0.56%), Bank of India (up 0.44%) and Canara Bank (up 0.08%) advanced.

The Reserve Bank of India (RBI) governor held a meeting with the CEOs of the public sector banks and the chief executive of Indian Banks Association (IBA). The Governor acknowledged discernible improvements in the banking sector while underscoring that several challenges still remain to be addressed, particularly with regard to the stressed asset resolution and credit flows to needy sectors.

The Governor also pointed out that the level of transmission of monetary policy rates was less than desired. The chiefs of state-owned banks and the Governor also discussed ways to improve recovery efforts. Improving fraud risk management and deepening digital payments were some of the other key issues discussed.

The governor gave impetus to resolution of stressed assets facilitated by revised framework for resolution announced by the RBI on 7 June 2019. The governor discussed credit and deposit growth on the back of a slowing economy; flow of credit to needy sectors while following prudent lending, robust risk assessment and monitoring standards. The governor also discussed recent initiatives to address issues relating to NBFCs and the role banks can play in mitigating lingering concerns.

Most private bank shares fell. Federal Bank (down 3.29%), IndusInd Bank (down 0.65%) and City Union Bank (down 0.07%) declined. Yes Bank (up 8.23%) and ICICI Bank (up 0.44%) advanced.

RBL Bank was down 5.19%, extending Friday's 13.71% slump. The bank during market hours on Friday announced that its net profit increased 40.5% to Rs 267.05 crore on a 48.1% rise in total income to Rs 2,503.88 crore in Q1 June 2019 over Q1 June 2018. Gross NPA has increased from Rs 595.94 crore in Q1 June 2018 to Rs 789.21 crore in Q1 June 2019. Provision coverage ratio increased from 60.41% in Q1 June 2018 to 69.13% in Q1 June 2019.

Commenting on the performance Vishwavir Ahuja, MD & CEO, RBL Bank said The bank has had a good quarter of strong performance and has continued to maintain its growth momentum and improvement in operating metrics. However, given the difficult environment we do expect to face some challenges on some of our exposures in the near term. At the same time, given the strong momentum in our businesses, we do expect to maintain a healthy profitable growth over the coming quarters.

Axis Bank was up 0.32%. The bank announced on Saturday, 20 July 2019, that the board of the bank has approved raising of funds aggregating upto Rs 18,000 crore, through issue of equity shares/ depository receipts and/or any other instruments or securities representing either equity shares and/or convertible securities linked to equity shares including through qualified institutions placement (QIP)/ american depository receipts (ADRs)/ global depository receipts (GDRs) program, preferential allotment or such other permissible mode or combinations as may be considered appropriate, subject to shareholders' approval through postal ballot process, in relation to the above fund raising proposal.

HDFC Bank lost 3.6%. The bank reported 21.01% rise in net profit to Rs 5568.16 crore on 22.74% rise in total income to Rs 32361.84 crore in Q1 June 2019 over Q1 June 2018. The result was announced on Saturday, 20 July 2019.

The bank's provisions and contingencies jumped 60.41% to Rs 2,613.66 crore in Q1 June 2019 over Q1 June 2018. Gross non-performing assets (NPAs) stood at Rs 11,768.95 crore as on 30 June 2019 as against Rs 11,224.16 crore as on 31 March 2019 and Rs 9,538.62 crore as on 30 June 2018. The ratio of gross NPAs to gross advances stood at 1.40% as on 30 June 2019 as against 1.36% as on 31 March 2019 and 1.33% as on 30 June 2018. The ratio of net NPAs to net advances stood at 0.43% as on 30 June 2019 as against 0.39% as on 31 March 2019 and 0.41% as on 30 June 2018.

Net interest income (interest earned less interest expended) for the quarter ended 30 June 2019 grew by 22.9% to 13,294.3 crore from Rs 10,813.6 crore for the quarter ended 30 June 2018, driven by asset growth and a core net interest margin for the quarter of 4.3%.

HDFC Bank said that in commemoration of 25 years of the bank's operations, the board of directors of the bank has declared a special interim dividend of Rs 5 per share for the financial year 2019-2020. The announcement was made after market hours on Friday, 19 July 2019.

Kotak Mahindra Bank fell 3% ahead of its Q1 result today, 22 July 2019.

India's foreign exchange reserves declined by $1.11 billion to $428.80 billion in the week ended 12 July 2019. The foreign exchange reserves had stood at $429.91 a week ago. Within the foreign exchange reserves, the foreign currency assets eased to $399.70 billion in the week ended 12 July 2019 from $400.81 billion a week ago. The gold assets were flat at $24.30 billion from $24.30 billion a week ago. SDRs were flat at $1.45 billion in the week ended 12 July 2019. India's foreign exchange reserves increased by $15.93 billion over March 2019, while jumped $23.72 billion over a year ago level.

On derivatives front, the NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 4.67% at 13.1.

On the options front, Nifty option chain for 25 July 2019 expiry showed a maximum call open interest (OI) of 36.04 lakh contracts at the 11500 strike price. Maximum put OI of 43.55 lakh contracts was seen at 11300 strike price. Options data suggested a trading range for Nifty will be between 11,300 and 11,500.

The southwest monsoon has further advanced into remaining parts of West Rajasthan and thus has covered the entire country on 19 July 2019, noted the IMD in a latest update. The monsoon trough at mean sea level passes through Ganganagar, Hissar, Agra, Banda, Sidhi, Daltonganj, Bhubaneshwar, then southeastwards towards Northwest Bay of Bengal. However, the IMD also noted that cumulative rainfall deficit compared to long period average rains stands at 16% for 1 June to 17 July period.

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