Markets witness fall in late noon deals

After trading above neutral lines, Indian equity benchmarks witnessed a fall in late afternoon session, with both Sensex and Nifty trading in red, impacted by selling at Consumer Durables and FMCG counters despite positive cues from European markets. Sentiments got cautious, as India Ratings and Research (Ind-Ra) has been highlighting increasing borrower leverage as a key concern for the microfinance (MFI) segment. Post the COVID-19 pandemic and implementation of harmonisation guidelines including the removal of interest rate caps, the ease of funding from banks to non-banks, along with a growing need for priority sector loans led to substantial growth in disbursement by existing MFI lenders in FY24. This, coupled with the advent of technology has improved the reach of credit to the bottom of the pyramid post pandemic, also raising a concern on the adherence on accessing repayment capability of the MFI borrower.

On the global front, European markets were trading higher, even after the German economy contracted, as initially estimated, in the second quarter due to weak household consumption and investment. The final results from Destatis showed that gross domestic product fell 0.1 percent sequentially, in line with the flash estimate, following a 0.2 percent rise in the first quarter.

The BSE Sensex is currently trading at 81697.34, down by 0.77 points after trading in a range of 81600.51 and 81919.11. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.49%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Telecom up by 0.64%, TECK up by 0.62%, IT up by 0.55%, Healthcare up by 0.37% and Realty up by 0.34%, while Consumer Durables down by 1.04%, FMCG down by 0.89%, Metal down by 0.82%, Utilities down by 0.21% and Auto down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.00%, Larsen & Toubro up by 1.76%, Bajaj Finserv up by 1.43%, Infosys up by 1.18% and Bajaj Finance up by 1.09%. On the flip side, Titan down by 2.49%, JSW Steel down by 1.98%, Hindustan Unilever down by 1.66%, Tata Motors down by 1.48% and NTPC down by 1.24% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the central bank is constantly working on devising policies, systems and platforms that will make the country’s financial sector stronger, nimble and customer-centric. He also said that the Unified Payments Interface (UPI) system has the potential to evolve into a cheaper and quicker alternative to the available channels of cross-border remittances and a beginning can be made with small value personal remittances as it can be quickly implemented.

The governor said Digital Public Infrastructure (DPI) spurs market innovation by reducing transaction costs, democratising access, maintaining competition through interoperability, and attracting private capital. Referring to the country's experience, he said DPI has enabled India to achieve, in less than a decade, levels of financial inclusion that would have otherwise taken several decades or more. DPI refers to basic technology systems, created mainly in the public sector, which are openly available to users and other developers. India's DPI journey is a unique model, wherein the base technical infrastructure is built, operated and managed in the public sector, while the private sector accesses the DPI to create innovative customer facing services. The advantage of developing DPI in the public sector is that typically the private sector would be averse to capital investment to create infrastructure with uncertain returns. He added that privately created infrastructure may not also be amenable to democratised access or interoperability.

He further said UPI, a real-time payment system, has emerged as a robust, cost-effective and portable retail payment system and is attracting active interest across the globe. He said that by digitising access to the customer's financial and non-financial data that otherwise resided in disparate silos, Unified Lending Interface (ULI) is expected to cater to large unmet demand for credit across various sectors, particularly for agricultural and MSME borrowers. Based on the experience from the pilot project, he said a nationwide launch of the ULI will be done in due course.

The CNX Nifty is currently trading at 25006.60, down by 4.00 points or 0.02% after trading in a range of 24973.65 and 25073.10. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 2.47%, Shriram Finance up by 2.40%, Maruti Suzuki up by 1.95%, Larsen & Toubro up by 1.67% and HDFC Life Insurance up by 1.59%. On the flip side, Titan Co down by 2.69%, JSW Steel down by 2.07%, Hindustan Unilever down by 1.70%, Tata Motors down by 1.49% and NTPC down by 1.29% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 39.3 points or 0.47% to 8,367.08, France’s CAC rose 27.85 points or 0.37% to 7,618.22 and Germany’s DAX gained 62.34 points or 0.33% to 18,679.36.