Monday’s declines in banking and financial equities caused Indian shares to remain muted as investors evaluated how the central bank’s stricter guidelines for personal loans would affect lenders.
As of 10:20 a.m. IST, the S&P BSE Sensex and the NSE Nifty 50 index were both unchanged at 19,731 and 65,746, respectively.
The private bank index dropped 0.4%, while the banking and financial indices declined by 0.2% apiece.
“the selling in banks will get exhausted as unsecured lending for banks for retail (clients) are very low and banks have very strong risk management.”
The Reserve Bank of India issued new capital-setting instructions to the nation’s banks last week, following several alerts over the sharp rise in certain personal loan amounts.
On Monday, the small- and mid-cap stocks did better than the benchmarks, increasing by 0.4% apiece. This month, they have gained almost 9% and 7%, respectively, while the Nifty and Sensex have gained 3%.
High net worth individuals, retail investors, and domestic mutual funds have been consistently purchasing small and mid-cap stocks, indicating a level of trust in home markets.
With a 0.5% increase, information technology stocks continued to rise. A 5% increase in the index last week was its highest week in sixteen months, driven by expectations that the US Federal Reserve will not raise interest rates.
In terms of individual equities, Talbros Automotive Components saw a 19.2% increase to a new high on Monday on the winning of orders totaling 5.80 billion rupees.
In response to its intention to build a premium home complex in the National Capital Region, shares of Oberoi Realty increased 4.3% to a new high.
For additional clues about the direction of interest rates, investors are waiting for the minutes of the U.S. Federal Reserve’s most recent meeting, which are expected this week.