NIFTY50: 19,444 ▲ 47 (+0.2%)
SENSEX: 65,433 ▲ 213 (+0.3%)
- Benchmark indices closes on positive note, Adani Group stocks witness sell-off
- In all, 29 of the NIFTY50 stocks closed in the green
- Eurozone composite PMI fell to 47 in August 2023, lowest since November 2020
Among the NIFTY sectoral indices, PSU Bank (+1.7%) and Financial Service (+0.9%) were the top gainers, while FMCG (-0.4%) and Oil & Gas (-0.3%) were the top losers.
| Top gainers | Today's change |
| Hindalco |
460 ▲ 10 (+2.3%) |
| Axis Bank | 977 ▲ 20 (+2.1%) |
| ICICI Bank |
967 ▲ 15 (+1.5%) |
| Top losers | Today's change |
| Adani Enterprises | 2,539 ▼ 159 (-5.8%) |
| Jio Financial | 224 ▼ 11 (-4.9%) |
| Adani Ports | 830 ▼ 24 (-2.8%) |
What’s trending
⭐ Big orders, significant gains!
It was a day of remarkable gains for at least three companies, courtesy big order wins! BEML, the railway transportation giant, clinched an order worth ₹101 crore from the Ministry of Defence (Army), leading to a nearly 5% intraday surge and a 52-week high. Linde India, too, followed a similar trajectory, hitting a fresh 52-week high after securing a substantial order from Indian Oil Corporation (IOC). Meanwhile, L&T’s shares hit a record high of ₹2,726 after securing 'large' orders in the Middle East for its power transmission and distribution business. Remember, L&T classifies orders in the range of ₹2500 to ₹5000 crore as large.
⭐ Tata Communications launches 5G Lab, shares soar
Investors in Tata Communications had something to celebrate as the company's shares went up by around 2% today. This was after the company shared exciting news about its new 5G Roaming Laboratory, which helps mobile operators test their 5G services and monitor international mobile roaming experience. As per the company, this lab is critical, considering 5G adoption is accelerating globally. The GSM Association has predicted five billion users by 2030.
⭐ Here’s why Himadri Chemical's shares surged!
Himadri Speciality Chemical's (HSCL) shares jumped by more than 4% today, reaching a 52-week high of ₹190.90. This surge was fueled by the Committee of Creditors' (CoC) approval of the insolvency resolution plan for Birla Tyres. Himadri Specialty Chemical had strategically partnered with Dalmia Bharat Refractories to actively participate in this insolvency resolution process. Birla Tyres is undergoing insolvency resolution since May 2022. Many companies, including HSCL, Dalmia Group and others had shown interest in debt resolution.
⭐ Crude Oil slides on grim manufacturing data
International crude oil prices declined today with Brent Crude Oil futures down 1.7%, trading around $82.7 per barrel. This comes amid gloomy global manufacturing data from major countries. Japan reported contraction in factory activity for the third straight month, while Eurozone business activity also declined more than expected, particularly in Germany. Lower numbers indicate a grim picture of the global economy that could lower oil demand.
In Focus
Why is NIFTY Bank underperforming?
Lately, banking stocks seem to be getting a lukewarm response from investors. Benchmark sectoral index, NIFTY BANK has broadly underperformed in comparison to NIFTY50 index this month. This comes despite most of the banks posting robust earnings during the June quarters. What are the key factors behind this? Let’s dig in
In August 2023, NIFTY BANK index lost 2.5% of its value or 1,172 points, compared to the 1.5% fall in NIFTY50. One of the primary reasons for the below average performance is a significant fall in banks that constitute NIFTY BANK index. Shares of HDFC Bank, Kotak Bank, ICICI Bank and SBI have declined in the range of 3% to 7% this month.
Profit booking pulled stocks down
But why? Experts cite profit booking post June quarter results as one of the factors for the recent fall in banking stocks. Most banking stocks gained before the Q1FY24 earnings in anticipation of robust results. Hence, as soon as the results were declared, investors rushed to book profits.
Index heavyweights tumble down
Besides this, stocks like HDFC Bank have underperformed after its merger with HDFC Ltd. HDFC Bank had rallied sharply before the merger. However, post-merger, the next few quarters are expected to be tough for the company in terms of profitability and other aspects like meeting CRR and SLR requirements. Hence the stock is trading in a tight range.
Meanwhile, Kotak Bank shares have fallen in the previous month as it saw institutional investors like Canada Pension Plan (CPP) exit. The pension fund, a prominent foreign investor in the bank, offloaded a 1.7% stake.
Liquidity dries up
Other than this, the banking system is also facing a liquidity crunch after RBI announced an incremental cash reserve ratio (ICRR) of 10% in its last policy meeting. As a result, banks have to park more funds with the central bank. This has caused an outflow of ₹1.1 lakh crore of extra funds from banks and led to a liquidity deficit. This has happened for the first time in FY24. What does this mean? Banks have less funds to give out as loans which will directly impact its interest income.
On the whole, banking stocks have remained resilient to multiple rate hikes. This is because of a steady growth in retail credit and robust earnings. How will it overcome the latest liquidity crunch challenge? Keep tracking this space and we will cover all the latest updates for you.
Powerful buying made simple!
Markets often see sharp price movements triggered by positive news or technical patterns. In such situations, you may want to double down on certain high-conviction trades. However, having limited capital could be an obstacle in leveraging such opportunities. With Margin Trading Facility (MTF) on Upstox, you can increase your trading capacity instantly. Click here to know more about MTF.
Benefits of MTF:
🔹 Get 2X leverage on equity delivery orders
🔹 Borrow up to ₹25,00,000 at a time
🔹 Hold stocks bought via MTF for up to 365 days.
Download the Upstox App Today