Indian Indices End Mixed as Financials Drop on RBI Rules

17 Nov 2023 , 03:35 PM

Indian shares exhibited a mixed trend on Friday, driven by contrasting factors: a decline in financial stocks due to the central bank’s tightened consumer lending rules and a rally sparked by a more favorable U.S. interest rate outlook and a drop in oil prices.

At the closing, Sensex traded at Rs 65,770, marking a 0.32% decrease from the previous close, while Nifty stood at Rs 19,720, showing a 0.23% dip.

Financials-related indexes, including banks, financial services, and private banks, faced losses of about 0.75%, with public sector banks experiencing a 2% decline.

The significant drop in financials, the most influential among Nifty 50’s sub-indexes, raised concerns about the sector’s loan growth and profitability following the Reserve Bank of India’s (RBI) tightened rules for personal loans and credit cards.

Notable Nifty losers included State Bank of India, Axis Bank, and Bajaj Finance, with falls ranging from 0.5% to 2.5%.

Conversely, other major Nifty sectors advanced, fueled by optimism that the U.S. Federal Reserve will not raise rates further in this cycle and a moderation in crude oil prices to a four-month low.

The decline in oil prices benefits Indian importers, leading to a 1% rise in Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd, and Indian Oil Corp.

The re-emergence of foreign investor buying after a 15-session selling streak and the decrease in crude oil prices could contribute to positive market momentum. For the week, Nifty 50 and Sensex each gained about 1.5%, propelled by a 5.45% surge in the information technology (IT) index, poised for its best week in 16 months.

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