Bulls continue to roar; Auto stocks riding high

Bulls continued to roar over the Dalal Street in early afternoon deals, with both Sensex and Nifty holding strong gains with traders indulging in some bargain hunting at several counters following recent steep losses. Sentiments were positive amid reports that the finance ministry tweaked norms for capital restructuring by central public sector enterprises (CPSEs) and introduced flexibilities for them to better add to their value creation strategy. Adding more optimism among traders, industry chamber CII said that the government initiatives such as Make in India and production linked incentive schemes for different sectors are helping attract foreign investors to set up bases in India. In a letter to Commerce and Industry Minister Piyush Goyal, CII Director General Chandrajit Banerjee said that the government's increased investments in infrastructure such as roads, railways and ports are making the domestic industry more competitive.

On the global front, Asian markets were trading higher, as the Thai economy grew at the fastest pace in two years in the third quarter on strong investment, exports and government spending. The data from the Office of the National Economic and Social Development Council showed that gross domestic product climbed 3.0 percent on a yearly basis after rising by revised 2.2 percent in the second quarter. 

Back home, airlines stocks were in watch, as the Indian aviation sector achieved a historic milestone on November 17, 2024, with 5,05,412 domestic passengers departing across the country in a single day. This is the first time domestic passenger numbers have surpassed the 5-lakh mark. 

The BSE Sensex is currently trading at 78356.13, up by 1017.12 points or 1.32% after trading in a range of 77525.05 and 78451.65. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped by 1.72%, while Small cap index was up by 1.80%.

The top gaining sectoral indices on the BSE were Auto up by 2.46%, Consumer Durables up by 2.37%, Realty up by 2.30%, Consumer discretionary up by 2.14% and IT up by 1.85%, while there were no losing sectoral indices on the BSE. 

The top gainers on the Sensex were Mahindra & Mahindra up by 4.12%, Tech Mahindra up by 3.25%, Titan Co up by 3.06%, Adani Ports & SEZ up by 3.02% and Tata Motors up by 2.92%. On the flip side, Bajaj Finserv down by 1.45%, SBI down by 0.52% and ICICI Bank down by 0.04% were the few losers.

Meanwhile, RBI Governor Shaktikanta Das has asked banks to proactively monitor their portfolios, identify areas of over-concentration, and take pre-emptive measures to address potential risks and challenges. He also asked bank boards to strengthen the internal governance framework to curb unethical practices, such as mis-selling of products or opening of accounts without proper KYC verification. He also said bank boards need to continuously assess external factors like regulatory changes, shifting market winds, overall macroeconomic changes and advances in technology.

The Governor further said boards should also be fully cognisant of the organisation’s internal strengths, vulnerabilities, and operational conditions so that they have a clear situational awareness. He stressed that boards must be cognizant of build-up of concentrations in their business model. Excessive reliance on specific sectors, markets, or customer segments can expose the bank to amplified risks, particularly in times of economic stress or industry shifts. Boards can play a proactive role by regularly monitoring the bank’s portfolios, identifying potential areas of over-concentration, and taking pre-emptive steps to maintain a balanced approach.

Besides, he said the boards must also remain vigilant to operational risks, particularly those arising from IT outsourcing and reliance on third-party vendors. He also said that the incentives for bank staff should be carefully structured so as not to encourage them to indulge in unethical practices. While such practices may yield short-term gains, they ultimately expose the bank to significant long-term risks, including reputational damage, supervisory scrutiny, and financial penalties. He added that the Indian banking sector is transitioning through a time which is replete with opportunities as well as risks and challenges.

The CNX Nifty is currently trading at 23751.80, up by 298.00 points or 1.27% after trading in a range of 23517.10 and 23780.65. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.20%, Trent up by 3.50%, Tech Mahindra up by 3.31%, Titan up by 3.30% and Dr. Reddy's Lab up by 2.93%. On the flip side, HDFC Life Insurance down by 2.93%, SBI Life Insurance down by 2.80%, Bajaj Finserv down by 1.38%, Shriram Finance down by 0.87% and SBI down by 0.50% were the top losers.

All Asian markets were trading higher; Hang Seng advanced 80.76 points or 0.41% to 19,657.37, Jakarta Composite gained 85.01 points or 1.19% to 7,219.29, Shanghai Composite strengthened 11.48 points or 0.35% to 3,335.33, Straits Times rose 27.62 points or 0.74% to 3,760.17, KOSPI increased 2.88 points or 0.12% to 2,471.95, Nikkei 225 surged 193.58 points or 0.5% to 38,414.43 and Taiwan Weighted added 302.26 points or 1.32% to 22,848.80.