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Markets Remain Under Pressure
Tue, 10 Nov 01:30 pm

Following a negative trend since the opening of the trading day, the Indian Indices have continued to remain under pressure in the post noon trading session. Sectoral indices are trading on a negative note with stocks from the capital goods, pharma and banking sectors bearing the maximum brunt.

The BSE-Sensex is trading lower by 263 (down 1%) and the NSE-Nifty is trading down by 97 points (down 1.2%). The S&P BSE Midcap index is trading lower by 1.2% while the BSE Small Cap index is trading down by 0.5%.Gold prices, per 10 grams, are trading at Rs 25,709 levels. Silver price, per kilogram, is trading at Rs 35,130 levels. Crude oil is trading at Rs 2,971 per barrel. The rupee is trading at 66.37 to the US$.

Banking stocks are trading on negative note with Yes Bank and Indusind Bank witnessing maximum selling pressure. As per a leading financial daily, large banks are seeing a surge in big corporate borrowings. Moreover, the bankers are expecting loan demand to shoot further by the end of the financial year in March.

Private sector banks, including HDFC Bank and Axis Bank, posted a 25% YoY growth in large corporate loans in September. SBI recorded a 21% increase while ICICI Bank's corporate lending rose 7% during the period.

This development has made the banking sector appear to be coming out of a single-digit corporate loan growth phase. It may be noted that earlier, top-rated companies raised funds directly from the market through commercial papers or corporate bonds. However, it appears that now the demand for bank loans is largely driven by a pick-up in infrastructure sector.

Lastly, bankers were also of the opinion that refinancing of loans will happen over a period of time and that will also help expand the loan growth.

Union Bank of India has reported its results for the second quarter ended September 30, 2015.

The bank has reported a 77% surge in its net profit to Rs 6,581 million during the quarter on a YoY basis. However, this was largely because the bank chose to make lower provisions against bad loans even as stressed assets rose.

Net interest income (NII) rose marginally by 0.8% YoY to Rs 21 billion during the period. Other income increased by 16% YoY at Rs 565 million.

Gross non-performing assets (NPAs) for the quarter jumped to 6% as compared to 4.7% in the quarter ended June 30, 2015. Provisions and contingencies for the quarter fell 45% from a year ago to Rs 4,325 million. Post provisioning, net NPAs were at 3% versus 2% in the June quarter.

Presently, the stock of Union Bank of India is trading down by 1.6%.

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1 Responses to "Markets Remain Under Pressure"

devaraj

Nov 10, 2015

expected one as bihar results.

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