RBI tightens consumer lending rules to counter rising risk - Daily Market Update - Equity 17 Nov 2023 | Globe Capital Market LTD.
17-Nov-2023
RBI tightens consumer lending rules to counter rising risk – Daily Market Update – Equity 17 Nov 2023

The Reserve Bank of India has made consumer lending costlier for banks and non-bank lenders, and also asked them to limit exposure to such loans amid growing risk concerns. Consumer loans will attract a credit risk weight of 125% as compared with 100% earlier, the regulator said in a circular issued on its website on Thursday. For NBFCs, too, consumer loans will attract a risk weight of 125%.

Overview and Outlook

Global Stock Market Today

  • Barring Dow Jones, other US equity markets ended on flat to positive note.
  • European markets ended on flat to negative note.
  • Asian equity markets are trading in red.
  • GIFT Nifty is little changed, Nifty futures likely to open around 19790 levels (as on 8:30AM).

 

News highlights from across the globe

  • Stocks in Asia decline as U.S. equities were mixed and bonds climbed after data underscored a gradual deceleration in the U.S. economy, reinforcing speculation the Federal Reserve will end its hiking campaign.
  • Brent crude was trading at $78 a barrel and the yield on the 10-year US bond was trading at 4.44%.

 

Important news updates from the domestic front

  • Banks and NBFCs: The Reserve Bank of India has made consumer lending costlier for banks and non-bank lenders and also asked them to limit exposure to such loans amid growing risk concerns. Consumer loans will attract a credit risk weight of 125% as compared with 100% earlier. For NBFCs, too, consumer loans will attract a risk weight of 125%.
  • JSW Infrastructure has received a letter of award from the Karnataka Maritime Board for the development of an all-weather, deep-water, greenfield port at Keni in Karnataka on a PPP basis. The estimated cost of the project is Rs 4,119 crore, with an initial capacity of 30 MTPA.
  • InterGlobe Aviation continued to dominate Indian skies with a 62.6% market share in October, as per domestic air traffic data.
  • Delhivery Softbank-backed SVF Doorbell (Cayman) has sought to sell stakes through block deals at Rs 403.5–413.85 apiece, as per Bloomberg. It holds a 14.46% stake as of Sept. 31.
  • TVS Motor announced its entry into Europe by signing an agreement for import and distribution with Emil Frey.
  • PNB Housing Finance: The board will meet on Nov. 24 to consider the issuance of NCDs up to Rs 3,500 crore on a private placement basis in tranches over the next six months.
  • IRB Infrastructure: Moody’s affirmed the company’s Ba1 CFR and India Toll Roads’ Ba2 senior secured rating and maintained the stable outlook for both ratings. The company’s assets benefit from long-term concession agreements that allow for regular toll rate adjustments and provide several protective measures against unexpected adverse events, the agency said.
  • Brigade Enterprises signed a joint development agreement with Krishna Priya Estates and Micro Labs for a residential housing project in Bengaluru for Rs 2,100 crore. It will develop around 2 million square feet of residential housing in Yelahanka, which is spread over 14 acres.

 

Nifty Overview & Outlook

The benchmark Nifty index extended gains for the second consecutive trading sessions and settled above 19750 levels after adding 89 points to its previous closing values after a volatile trading session.

Nifty Midcap outperformed the benchmark as it was up 0.85% while Small cap index performed inline with the benchmark, up 0.58%.

All the sectoral indices, barring Nifty FMCG & PSU Bank index, tracked at NSE settled in green. Amongst them, Nifty IT index was the top performer, up over 2.5% followed by Nifty Auto, Consumer Durables, Healthcare and Realty and Pharma indices settled higher in range 0.80% to 1.13%.

Technically, Nifty index is well placed on multiple chart frames. Going ahead, we reiterate our bullish view on Nifty index and suggest traders to maintain buy on dips trading approach till it is trading above 19500 levels on a closing basis.

 

Derivatives Overview & Outlook

Yesterday, short covering was seen in Nifty futures with decrease in open interest by 1.4%. No major movement was seen on price front in Banknifty and Finnifty futures but open interest decreased by 8% and 1.3% respectively showing long unwinding.

On sectoral front, long buildup was seen in Oil & Gas, Power and Cement stocks whereas short covering was seen in Media, Realty and Textile stocks.

On options front, Nifty will start the new weekly contract with maximum positions at 19700 PE and 19900 CE.

 

Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 957 Cr in the cash segment, bought stocks futures and index futures worth Rs 4462 Cr and Rs 1574 Cr respectively. DIIs were net buyer in the cash segment to the tune of Rs 706 Cr.

 

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 19960-20060; Supports 19690-19600

Banknifty – Resistances 44600-44850; Supports 43850-43600

Finnifty – Resistances 19940-20020; Supports 19640-19530

 

BANSCRIPT – CHAMBLFERT, DELTACORP, HINDCOPPER, INDIACEM, MANAPPURAM, MCX, SAIL, ZEEL.

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