Midweek mayhem

Nifty50: 18,042▼ 189 (-1.0%)
Sensex: 60,657 ▼ 636 (-1.0%)

Hello,

Would you fancy going for a walk, playing sports or just relaxing in an abandoned coal mine?

Mine? Sounds off, right?

But this has turned out to be a real story in Madhya Pradesh. Coal India has restored two exhausted coal mines into full-fledged eco-parks! What were once dusty and marooned pieces of land now boast landscaped water-fronts and pathways and are dotted with recreational areas, restaurants and shops.

This initiative has paid off in ecological and social dividends. It is generating revenue and jobs for the locals. It is also helping to clean up the air and is preventing soil erosion. Talk about starting over with a clean slate!

The markets, meanwhile, will be looking to wipe today’s slate clean as well and hope for a turnaround tomorrow. Why? Read on.

• Indices extend losses after opening in the red.
• 43 companies from the NIFTY50 pack decline.
• All eyes on the minutes of the U.S Fed December meet which will release Wednesday evening.

All the sectoral indices closed in red with Metal (-2.1%) and Realty (-2.0%) being the top losers.

What’s trending

⭐ HDFC Bank’s strong loan growth 

  HDFCBANK (NSE): 1,610 ▼ 29 (-1.7%)

It is a telltale sign of India’s economic revival. India’s largest private sector lender HDFC Bank has reported robust credit growth. Loans to individuals grew by 21.5% on a yearly basis, while loans to companies and institutions saw a rise of 20% in the quarter that ended December. Consequently, the bank’s total loans were up around 19.5% to ₹15,070 billion. The bank’s current and savings account deposits climbed by 12% to ₹7,630 billion as of December 31, 2022.

⭐ D’Mart slips on slow revenue growth

DMART (NSE): 3,931 ▼ 129 (-3.2%)

The D-Mart chain’s operator- Avenue Supermarts’ stock dipped today owing to its slow revenue growth in the third quarter. The company reported a standalone revenue of ₹11,304 crore in the period, which is an increase of 25% year-on-year. However, in the last quarter, the company’s revenue had grown by 36%. Notably, this growth bump in the company's revenue came in a quarter that coincided with the festive season. Meanwhile, its stores increased from 302 to 306 as of 31 December 2022.

⭐ Aviation sector takes off again

INDIGO (NSE): 1,998 ▼ 42 (-2.1%), SPICEJET (NSE): 38 ▼ 0.05 (-0.1%)

1.29 crore - that is the headcount of people who took a flight in the last month of 2022. With that, India’s air passenger traffic has surpassed pre-Covid levels. Even Civil aviation minister Jyotiraditya Scindia took to Twitter to share the milestone. This influx was mainly driven by the holiday season. So, did you fly last December?

⭐ Cabinet clears Green Hydrogen Mission 

The government has sanctioned ₹19,744 crore to implement the National Green Hydrogen Mission. A large part of the fund will be used towards the SIGHT programme which aims to produce 50 lakh tonnes of green hydrogen per annum by 2030. This move could reduce India’s dependence on fossil fuel imports. Also, companies that manufacture electrolysers that produce green hydrogen will get incentives for the next five years.

JFYI, Some major companies have already made a transition towards green hydrogen. Adani Group plans to invest $50 billion over the next ten years in the green hydrogen ecosystem, while Reliance Industries has partnered with companies to commercialise its pressurised alkaline electrolyzer technology. Green Hydrogen helps in decarbonising the shipping and transportation sectors.

In Focus

Decoding Insurance stocks’ rally

For the past two weeks, stocks of major insurance players, be it private or state-owned, have rallied. Shares of LIC, HDFC Life and SBI Life have gained between 2 to10%. Meanwhile, state-owned insurance firms such as New India Assurance and GIC India have rallied more than 25%. Why did insurance stocks have a year-end party? Let’s find out.

Reason #1: Govt’s proposed amendment to the insurance act, which could pave the way for the insurers to diversify their product offerings by distribution of other financial products.  

As per industry experts, allowing insurance companies to sell different products could majorly boost their product portfolio and improve their revenue and profitability.  

And reason #2: Earlier, In November 2022, insurance regulator IRDAI enhanced the limits for corporate agents. They are now allowed to associate with nine companies across life, health and general insurance segments. Earlier this was limited to three. 

The proposed amendments are aimed at increasing the insurance penetration in the country, improve efficiency and enable product innovation and diversification.

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Good to know

What is CASA RATIO?

CASA stands for Current Account and Savings Account. 

Three types of deposits make up the major source of funds for banks. These are current accounts, savings accounts and term deposits. The Bank pays maximum interest on term deposits and minimum or nothing on current accounts. 

The CASA Ratio is the ratio of deposits in the current account and savings account to the total deposits of the bank. A higher CASA ratio gives the banks access to cheaper funds (because most of the money comes from the current and savings accounts). It helps the bank earn higher interest margins.

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