Barometers trade with significant losses; PSU banks in demand

The key equity barometers continued to trade with significant losses in mid-morning trade. The Nifty managed to hold above the 18,600 mark. PSU bank shares advanced for fourth day in a row.

At 11:23 IST, the barometer index, the S&P BSE Sensex, was down 291.4 points or 0.46% to 62,543.20. The Nifty 50 index lost 89.70 points or 0.48% to 18,611.35.

In the broader market, the S&P BSE Mid-Cap index slipped 0.50% while the S&P BSE Small-Cap index declined 0.26%.

The market breadth was almost even. On the BSE, 1625 shares rose, and 1654 shares fell. A total of 170 shares were unchanged.

The Reserve Bank of India (RBI) started its bi-monthly policy review with the Monetary Policy Committee (MPC) meeting yesterday. The bi-monthly policy review is expected to come out on 7 December 2022. More than the quantum of rate hikes, domestic investors would watch out for RBI's commentary as it ramps up its efforts to curb inflation and push growth.

On the political front, various exit polls on Monday predicted a big majority for the BJP in Gujarat and a dead heat in Himachal Pradesh where most pollsters gave an edge to the ruling party over the Congress. The counting of votes in both states will take place on December 8. Elections for the Himachal Pradesh assembly took place on November 12, while polling in Gujarat happened in two phases on December 1 and 5.

Buzzing Index:

The Nifty PSU Bank index rose 1.34% to 4,207.65. The index has gained 5.17% in three sessions.

Punjab & Sind Bank (up 8.8%), Bank of India (up 5.68%), Union Bank of India (up 5.07%), UCO Bank (up 2.21%) and Punjab National Bank (up 2.18%) were the top gainers.

Among the other gainers were Indian Overseas Bank (up 1.79%), Central Bank of India (up 1.74%), Bank of Baroda (up 1.63%), Bank of Maharashtra (up 1.63%) and Indian Bank (up 1.44%).

On the other hand, State Bank of India (down 0.37%) and Canara Bank (down 0.33%) edged lower.

Stocks in Spotlight:

Karur Vysya Bank rose 0.90%. The private lender on Tuesday announced an increase in marginal cost of funds-based lending rate (MCLR) by 25 basis points across different tenors, effective from 7 December 2022. The overnight MCLR increased from 8.05% to 8.30%. MCLR for one month rose from 8.20% to 8.45%. The interest rate on the three-month MCLR was raised from 8.35% to 8.60%, followed by the six-month MCLR rate increased from 8.70% to 8.95%. The one-year MCLR rate was raised from 8.80% to 9.05%. The revised rates will be effective from 7 December 2022.

IRB Infrastructure Developers rose 2.53%. The company's gross toll collection jumped 39.25% to Rs 365.95 crore in November 2022 compared with Rs 262.81 crore reported in November 2021.

Sterlite Technologies shed 0.65%. The company announced that its board has approved the appointment of Tushar Shroff, as the chief financial officer (CFO) and key managerial personnel of the company with effect from 6 December 2022.

Global Markets:

Asian stocks are trading lower on Tuesday after Wall Street sold off overnight on fears that the Fed will keep increasing interest rates. Meanwhile, Beijing city announced negative Covid tests will no longer be required to enter most public areas, malls or residential areas, while bars and so-called KTV lounges, or karaoke bars. Several cities in China relaxed Covid testing rules in recent days.

US stocks fell Monday on fears that the Federal Reserve may continue tightening until it tips the economy into a recession. Shares of Tesla slid on reports of a production cut in China.

US services industry activity unexpectedly picked up in November. The ISM said its non-manufacturing PMI increased to 56.5 last month from 54.4 in October, which was the lowest reading since May 2020.

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