Local equities extend losses in morning deals

Indian equity benchmarks extended losses in morning deals dragged by decline in heavyweight stocks Asian Paints, Tata Motors and Maruti Suzuki. Escalating tensions in the Middle East, coupled with the implementation of changed norms for trading in index derivatives also weighed on market sentiment. Traders also remained cautious as a labour ministry statement said retail inflation for industrial workers inched up marginally to 2.44 per cent in August against 2.15 per cent in July this year. The All-India CPI-IW (Consumer Price Index-Industrial Workers) for August 2024 decreased by 0.1 points and stood at 142.6 points. Sector-wise, NBFCs stocks remained in watch as Crisil Ratings asserted that non-banking financial companies (NBFCs) are increasingly attempting to access funding sources beyond banks, such as through non-convertible debentures (NCD), commercial papers (CP), foreign currency borrowings (FCB) and securitisation, to continue their growth march. On the global front, Asian markets are trading mostly in red, as traders remain cautious about escalating tensions in the Middle East following Iran's ballistic missile attack against Israel.

The BSE Sensex is currently trading at 83391.91, down by 874.38 points or 1.04% after trading in a range of 83002.09 and 83752.81. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.90%, while Small cap index was down by 0.87%.

The lone gaining sectoral index on the BSE was Metal up by 0.39%, while Realty down by 2.62%, Auto down by 1.60%, Capital Goods down by 1.32%, Consumer Disc down by 1.32% and Bankex down by 1.20% were the top losing indices on BSE.

The top gainers on the Sensex were JSW Steel up by 2.34%, Tata Steel up by 0.75%, Ultratech Cement up by 0.73%, SBI up by 0.40% and Sun Pharma up by 0.29%. On the flip side, Asian Paints down by 3.17%, Tata Motors down by 2.33%, Maruti Suzuki down by 2.17%, Axis Bank down by 2.16% and Larsen & Toubro down by 2.10% were the top losers.

Meanwhile, Crisil Ratings has said that non-banking financial companies (NBFCs) are increasingly attempting to access funding sources beyond banks, such as through non-convertible debentures (NCD), commercial papers (CP), foreign currency borrowings (FCB) and securitisation, to continue their growth march. As per the rating agency, this follows challenges in availability of bank loans as freely as in the past after risk weights on bank lending to higher-rated NBFCs were raised last year. 

A study of over 110 NBFCs rated by CRISIL Ratings, accounting for over 95 per cent of the sector's assets under management (AUM), indicates the share of bank loans in the sector's borrowings declined 60 basis points to 47 in the April-June quarter. Malvika Bhotika, Director, CRISIL Ratings, said, ‘While banks will remain the dominant funding source for NBFCs, the bond market will gain market share over the near to medium term.’ Bhotika stated that the bond market will become more attractive over the next few quarters given the expectation of a repo rate cut.

Over the near to medium term, funding diversification across resource types will remain imperative for NBFCs to continue their growth trajectory. Crisil Ratings said that diversification is also crucial to optimise borrowing cost, given bank funding has become dearer by 20-50 basis points over the past few quarters. That means NBFCs will have to keep tapping other funding avenues.

The CNX Nifty is currently trading at 25524.55, down by 272.35 points or 1.06% after trading in a range of 25451.60 and 25639.45. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.46%, ONGC up by 1.16%, Grasim Industries up by 0.73%, Tata Steel up by 0.68% and Ultratech Cement up by 0.51%. On the flip side, Eicher Motors down by 4.22%, BPCL down by 3.48%, Asian Paints down by 2.92%, Shriram Finance down by 2.59% and Tata Motors down by 2.43% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 700.55 points or 3.22% to 21,743.18, Jakarta Composite plunged 32.83 points or 0.43% to 7,530.43 and Straits Times fell 6.38 points or 0.18% to 3,578.29.

On the flip side, Nikkei 225 surged 775.84 points or 2.05% to 38,584.60.