IGI Logo

Mirroring other Asian peers, Indian equity markets continue to trade in deep red as traders were worried as US inflation soared over the past year at its highest rate in four decades, hammering America's consumers, wiping out pay raises and reinforcing the Federal Reserve's decision to begin raising borrowing rates across the economy. Selling further crept in with Former Reserve Bank of India Governor D Subbarao statement that concern today was that the low interest rates and the enormous liquidity available in the system could potentially disrupt financial stability. He added that the challenge for central banks and for the Reserve Bank of India was to juggle between maintain price stability, supporting growth and employment, preserving financial stability and all this in a globalised world.

Selling was both brutal and wide based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include IT, technology and consumer durables. Broader markets too clobbered out of shape and were trading with cut of over percentage each. The market breadth remained in favour of decliners, as there were 867 shares on the gaining side against 2342 shares on the losing side, while 96 shares remained unchanged.

The BSE Sensex is currently trading at 58048.46, down by 877.57 points or 1.49% after trading in a range of 57914.10 and 58447.15. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.31%, while Small cap index was down by 1.30%.

The top losing sectoral indices on the BSE were IT down by 2.46%, TECK down by 2.31%, Consumer Durables down by 1.99%, Realty down by 1.97% and Capital Goods down by 1.63%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 0.86% and Indusind Bank was up by 0.26%. On the flip side, Infosys down by 2.87%, Nestle down by 2.42%, Tech Mahindra down by 2.28%, Larsen & Toubro down by 2.28% and Wipro was down by 2.18% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has urged banks and NBFCs to continue the process of augmentation of capital and building up of appropriate buffers to meet future uncertainties. Unveiling the bi-monthly policy, he said RBI has been watchful of the impact of the pandemic on the banking and NBFC sectors when the effects of regulatory reliefs and resolutions fully work their way through.

Das said the Reserve Bank has accorded the highest priority to preserving financial stability by taking quick and decisive steps to ease liquidity constraints, restore market confidence and prevent contagion to other segments of the financial market. Thus, he said, despite the pandemic-induced bouts of volatility, the Indian financial system has remained resilient and is now in a better position to meet the credit demands as recovery takes hold and investment activity picks up. He also said the balance sheets of Scheduled Commercial Banks (SCBs) are relatively stronger with higher capital adequacy, reduced NPA, higher provisioning cover and improved profitability than in the previous years.

RBI Governor further said banks and other financial entities would be well advised to further strengthen their corporate governance and risk management strategies to build resilience in an increasingly dynamic and uncertain economic environment. They also need to continue the process of capital augmentation and building up of appropriate buffers. With regard to RBI, he said, the regulator has been also strengthening the regulatory and supervisory framework for both banking and non-bank financial sectors to proactively identify, assess and deal with vulnerabilities.

The CNX Nifty is currently trading at 17348.05, down by 257.80 points or 1.46% after trading in a range of 17303.00 and 17454.75. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 3.47%, Indian Oil Corp up by 1.58%, Tata Steel up by 0.91%, Indusind Bank up by 0.37% and BPCL up by 0.31%. On the flip side, Grasim Industries down by 3.59%, Infosys down by 2.94%, Britannia Inds down by 2.73%, Nestle down by 2.65% and Tech Mahindra down by 2.45% were the top losers.

All Asian markets were trading lower, Straits Times trembled 3.69 points or 0.11% to 3,424.31, Taiwan Weighted dropped 27.11 points or 0.15% to 18,310.94, KOSPI fell 24.56 points or 0.89% to 2,747.37, Jakarta Composite lost 23.04 points or 0.34% to 6,800.60, Shanghai Composite declined 16.65 points or 0.48% to 3,469.26 and Hang Seng was down by 176.24 points or 0.71% to 24,748.11.