Indian stock markets slid further in the last two trading hours as selling activity intensified. Majority of the sectoral indices are trading in the red with the consumer durables and realty sectors being the biggest losers. Auto stocks were the biggest gainers.
Majority of the private sector and public sector banks are trading in red. Sharp rise in interest rates precipitated into lower demand for credit adversely impacting the loan growth of banks. As per a leading financial daily, data released by the Reserve bank of India shows that loan growth slowed down significantly in 2011. The total non-food bank credit increased by 15.4% in 2011 almost half of 27.2% growth clocked in the previous year. The slowdown has been the steepest in agriculture which saw credit offtake grow by a mere 5.6% as compared to 25.4% growth recorded in 2010. The credit growth to industry in 2011 rose by 19.8% vis-a-vis 31.6% growth in the previous year. In industry, sectors such infrastructure, metals, engineering, textile, food processing and gems & jewellery witnessed robust growth in credit intake during the year. The credit growth to the services sector increased by 14.9% as compared to growth of 29.5% clocked in 2010.
Most of the auto stocks are trading positive with Ashok Leyland and Hero MotoCorp being the biggest gainers. As per a leading financial daily, Maruti Suzuki arrested its seven-month declining sales streak by posting a 5.2% growth in offtake to 1.15 lakh units in January. While the company's domestic sales were marginally up by 0.6% YoY at 1.01 lakh units, exports surged by 54.3% YoY to 14,386 units during the month. The company's passenger car sales in the domestic market were up by 2.4% YoY to 88,377 units. It must be noted that in the nine month period, Maruti was adversely impacted by loss of production due to labour issues at its Manesar plant as well as higher interest rates and fuel prices. Maruti Suzuki stock was up by 1.7%.