Bombay Stock Exchange (BSE). File
| Photo Credit: Reuters

Equity benchmark indices Sensex and Nifty settled lower for the sixth straight session on Monday (October 7, 2024) due to heavy selling in bellwether stocks including HDFC Bank and Reliance Industries amid mixed trends in the global markets and outflow of foreign funds.

Falling for the sixth consecutive session, the BSE Sensex tumbled 638.45 points or 0.78% to settle at 81,050. During the day, it plummeted 962.39 points or 1.17% to 80,726.06.

The NSE Nifty slumped 218.85 points or 0.87% to end at 24,795.75.

From the 30 Sensex firms, Adani Ports & Special Economic Zones, NTPC, State Bank of India, PowerGrid, IndusInd Bank, Axis Bank, HDFC Bank, Titan and UltraTech Cement were the major laggards.

Mahindra & Mahindra, ITC, Bharti Airtel, Infosys, Bajaj Finance, Tata Consultancy Services and Tech Mahindra defied the trend.

“The Indian markets have entered a consolidation phase with high risk of underperforming to Asian peers. This phase is marked by significant corrections in the broader market due to premium valuations. There is notable global arbitrage activity, with Chinese markets attracting substantial inflows driven by its attractive valuations and stimulus measures,” Vinod Nair, Head of Research at Geojit Financial Services, said.

Global oil benchmark Brent crude surged 2.09% to $79.68 a barrel.

European markets were trading on a mixed note on Monday (October 7, 2024).

In Asian markets, Tokyo, Shanghai, Hong Kong and Seoul settled higher.

Wall Street ended with gains on Friday (October 4, 2024).

Investors are reassessing their portfolio positions and FIIs outflows are exacerbated. Amid escalating geopolitical tensions, the surging oil prices pose a further challenge to the domestic economy in the short term, Mr. Nair added.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹9,896.95 crore on Friday (October 4, 2024), while Domestic Institutional Investors (DIIs) bought equities worth ₹8,905.08 crore, according to exchange data.

On Friday (October 4, 2024), the BSE Sensex tumbled 808.65 points to settle at a three-week low of 81,688.45, while NSE Nifty slumped 235.50 points to 25,014.60.

Last week, the BSE Sensex tanked 3,883.4 points, or 4.53%, and the Nifty slumped 1,164.35 points or 4.44%.

Mumbai:

The Reserve Bank of India (RBI) has imposed penalties totalling Rs 2.91 crore on Axis Bank and HDFC Bank for certain deficiencies in statutory and regulatory compliance. In a statement on Tuesday, the RBI said a penalty of Rs 1.91 crore has been imposed on Axis Bank for contravention of certain provisions of the Banking Regulation Act, and non-compliance with certain directions on ‘Interest Rate on Deposits’, ‘Know Your Customer (KYC)’ and ‘Credit Flow to Agriculture-Collateral free agricultural loans’.

A penalty of Rs 1 crore has been imposed on HDFC Bank for non-compliance with certain directions on ‘interest rate on deposits’, ‘recovery agents engaged by banks’ and ‘customer service in banks’, it said in another release.

Regarding Axis Bank, the RBI said a supervisory evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2023 and a review of activities of its subsidiary company was carried out. A notice was issued.

After considering Axis Bank’s reply to the notice, the RBI said charges against the bank were sustained, warranting imposition of monetary penalty.

The RBI said the bank had opened certain savings deposit accounts in the name of ineligible entities.

Also, it had allotted multiple customer identification codes to certain customers instead of a Unique Customer ldentification Code (UCIC) for each customer.

The RBI further said Axis Bank had obtained collateral security for agricultural loans up to Rs 1.60 lakh in certain cases.

A wholly owned subsidiary of the bank undertook the business of technology service provider, which is not the permissible business that can be undertaken by a banking company, it added.

In the case of HDFC Bank, the RBI said a statutory inspection for supervisory evaluation of the bank was conducted with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank.

After considering the HDFC Bank’s reply to the notice, additional submissions made by it, and oral submissions made during the personal hearing, the RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty, the RBI said.

The RBI said HDFC Bank gave gifts (in the form of paying a first-year premium for the complimentary life insurance cover) costing more than Rs 250 to the depositors at the time of accepting certain deposits.

It opened certain savings deposit accounts in the name of ineligible entities and failed to ensure that customers are not contacted after 7 pm and before 7 am.

The central bank, however, added that the penalties are based on deficiencies in statutory and regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Exchange Data said that FIIs bought equities worth ₹2,208.23 crore on Tuesday (September 10, 2024). File
| Photo Credit: Reuters

Equity benchmark indices declined in early trade on Wednesday (September 11, 2024) after two days of gains amid selling in Tata Motors and weak trends in Asian markets.

The 30-share BSE Sensex fell 111.85 points to 81,809.44. The NSE Nifty dipped 39.2 points to 25,001.90.

Among the 30 Sensex firms, Tata Motors, ICICI Bank, Titan, HDFC Bank, JSW Steel, Tech Mahindra, UltraTech Cement and Axis Bank were the major laggards.

Asian Paints, Bharti Airtel, ITC and Hindustan Unilever were among the gainers.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading lower.

The U.S. markets ended mostly with gains on Tuesday (September 10, 2024).

Foreign Institutional Investors (FIIs) bought equities worth ₹2,208.23 crore on Tuesday (September 10, 2024), according to exchange data.

Global oil benchmark Brent crude climbed 0.59% to $69.60 a barrel.

The BSE benchmark climbed 361.75 points or 0.44% to settle at 81,921.29 on Tuesday (September 11, 2024). The NSE Nifty surged 104.70 points or 0.42% to 25,041.10.

UBS has turned “neutral” on the banking sector and sees a higher probability of regulatory tightening on unsecured loans.
| Photo Credit: ADNAN ABIDI

The risk of Indian banks’ unsecured retail loans turning sour is rising as lending to borrowers with overdue debt has increased, UBS said in a note.

In recent months, lenders in Asia’s third-largest economy have boosted their unsecured lending portfolios as the pandemic-induced stress on household finances has eased.

Last week, the country’s central bank said it is closely monitoring the segment for signs of nascent stress.

UBS has turned “neutral” on the banking sector and sees a higher probability of regulatory tightening on unsecured loans.

“The share of loans to borrowers with weaker risk profiles has risen along with an increase in retail borrowers’ leverage,” UBS said on Oct. 12, citing a study it conducted.

Banks’ outstanding receipts from credit cards rose to ₹2.18 trillion ($26.19 billion) as of August 25, from ₹1.68 trillion a year earlier, central bank data showed. Outstanding personal loans rose 26% in the same period.

The share of lending to borrowers with overdue loans rose to 23% in fiscal year 2022-23 from 12% in fiscal 2018-19, UBS said.

The number of borrowers with multiple retail loans rose to 9.3% in fiscal 2022-23 from 3.9% in fiscal 2017-18, it added.

UBS has raised its credit cost forecasts for Indian banks under its coverage by 5-10 basis points for the fiscal year ending March.

The brokerage has cut its rating on State Bank of India and Axis Bank to “sell” and “neutral,” respectively, from “buy,” on rising credit costs.

It has also lowered the price target for SBI to ₹530 from ₹740 and that for Axis Bank to ₹1,100 from ₹1,150.

Unsecured loans as a percentage of total loans rose to 11.1% for SBI and 10.7% for Axis Bank in June 2023, UBS said.

The brokerage prefers HDFC Bank and IndusInd Bank.