Stocks Turn Lower, RBI Releases Bank Stress Test Review

Arjun Pandit
29 Dec, 2023
Mumbai

Stocks in Mumbai faced selling pressure after rising for five days in a row amid mixed global market sentiment.

The Sensex and the Nifty indexes declined 0.4%, and investors avoided small and mid-cap stocks in Friday's trading.

The two popular indexes are still up 1.5% for the week and advanced for the eighth week in a row after positive economic growth and weakening inflation supported investor enthusiasm.

Market indexes are set to rise for the eighth week in the last nine weeks as the year 2023 closes, and the Sensex index advanced 18% and the Nifty index gained 19.3% in 2023.

Investors also reviewed the latest financial stability report released by the Reserve Bank of India. 

 

RBI Stress Test Shows Resilient Domestic Banking System

"The Indian economy and the domestic financial system remain resilient after the completion of their stress test ending in September.

"Strong macroeconomic fundamentals, healthy balance sheets of financial institutions, moderating inflation, improving external sector position, and continuing fiscal consolidation" are supporting the resilience of the domestic financial system.

The gross non-performing asset ratio continued to decline to a multi-year low of 3.2%, and the net non-performing asset ratio eased to 0.8% at the end of September.

The capital to risk-weighted assets ratio, or CRAR, and the common equity tier 1 ratio,or CET 1, of commercial banks stood at 16.8% and 13.7%, respectively.

 

India Indexes and Yields

The Sensex index decreased 302.07 points to 72,108.31, and the Nifty index eased 89.25 points to 21,690.45.

On the Mumbai stock exchange, 152 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds held firm at 7.20%, and the Indian rupee hovered near ₹83.27 against the U.S. dollar.

The gold price decreased by 0.2% to ₹63,250 per ten grams, and silver fell by 0.98% to ₹74,228 per kilo.

Crude oil decreased by 0.8% to ₹5,999 per barrel, and natural gas fell by 0.3% to ₹211.60 per thermal unit.

 

India Stock Movers

Tata Coffee Limited, Tata Consumer Products Limited, and its wholly owned subsidiary Tata Consumer Products Beverages and Food are expected to be effective January 1, 2024.

TCPL will exchange one share for every 22 shares held in TCL for the company's plantation business.

For the remaining businesses, TCPL will issue 14 shares for every 55 shares held in TCL.

After the completion of the merger, TCL shareholders will effectively receive 10 shares of TCPL in exchange for every three shares held.

Tata Coffee increased 3.7% to ₹319.70, and Tata Consumer Products advanced 3.5% to ₹1,077.45.

RBL Bank increased 2.5% to ₹274.85 after the Reserve Bank of India granted mutual funds controlled by ICICI Prudential to acquire as much as a 10% stake in the lender.

Oil companies were in focus after crude oil prices dropped as much as 3% in the international markets and on speculation that the central government is looking to lower retail prices at petrol pump stations.

Reliance Industries decreased 0.6% to ₹2,589.10, Indian Oil declined 2.3% to ₹130.10, Bharat Petroleum fell 2.4% to ₹453.75, and Hindustan Petroleum dropped 4% to ₹399.80.

Railtel Corporation jumped 5.5% to ₹309.40 after the company won a 120 crore order from the South Central Railway Company.