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Metal and Banks drag markets lower
Fri, 25 Jun 11:30 am

After starting today's session on a negative note, Indian indices are still lingering in the red. Key Asian markets are also in the negative territory. Stocks from metals and banks space are trading in the red while stocks from the healthcare and consumer durables space are witnessing buying interest.

The BSE-Sensex is trading down by around 112 points, while the NSE-Nifty is down by about 33 points. However, mid and small cap stocks are trading flat as the BSE-Midcap and BSE-Smallcap indices are trading higher by 0.04% and 0.3% respectively. The rupee is trading at 46.49 to the US dollar.

Banking stocks are trading in the red. Major losers include HDFC Bank and ICICI Bank while Canara Bank and Yes Bank are trading flat. As per a leading business daily, SBI is planning to increase its home loan portfolio by 31% this year. The bank had managed to achieve similar growth rate in the previous fiscal due to the launch of special home loan schemes. It should be noted that HDFC managed to grow its home loan portfolio by 15-16% in the last fiscal. This is significantly lower than SBI. In the home loan segment SBI has a clientele of 1.5 m and aims to add 0.4 m this fiscal. However, there is no clarity whether the bank will offer more teaser-rate type home loan products to meet its internal target. Both HDFC and SBI enjoy a market share of 17% in the home loan segment. These, together with ICICI Bank and LIC Housing Finance dominate the domestic mortgage market with a combined market share of 55%.

Investment and Financing companies are trading in the red with Shriram Transport, HDFC, LIC Housing leading the declines. IDFC was recently classified as an infrastructure finance NBFC (IFC) by RBI. On the back of this announcement, the company declared that it will be raising US$ 750 m via a qualified institutional placement (QIP). In April, the company's board approved the raising of this amount through equity or equity linked instruments. It will be using this money to fund further growth and expansion. Since it has achieved the status of an IFC, it will be able to grow its loan book in focused areas. It will also receive concessions in terms of cheap borrowings and will not be subject to borrower limitations

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