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Sensex and Nifty companies negotiated in the green at a meeting of the RBI board, during which the apex bank and the government should agree on issues ranging from MSME credit to central bank reserves, although that both parties are in favor of reaching a common ground.
While the Sensex increased by 102 points to 35,559, the Nifty gained 20 points to 10,702.
At the start of trading, the Sensex opened the points record with 35647 points, up 190 points from the previous close of 35457 points. The Nifty also went up 49 points to 10,731.
Read also: NBFC's liquidity will remain a thorny issue in the RBI board meeting
One of the main problems is to address the shortage of cash that is holding back non-bank finance companies (NBFCs). The shortage could lead to the collapse of credit markets, putting the broader economy at risk. These NBFCs now require a special window of liquidity to address their mismatches. Ideally, NBFC companies should sell their assets to banks or other solid entities to generate cash. If this option is fully used, it is necessary to open a special RBI window.
NBFC's shares were trading in a mixed way during the current meeting.
PNB Housing Finance was down 0.89%, Indiabulls Housing Finance down 2.32%, Dewan Housing Finance up 2.86%, Mahindra & Mahindra Financial Services down 0.74%, Ujjivan Financial Services down 0.22% and Shriram Transport Finance down 0.85% on BSE.
The shares of Bajaj Finance are trading down 0.80%. Edelweiss Financial Services increased by 0.95%, Financial JM by 1.45% and the IIFL Holdings portfolio by 2.07%.
Shares of NBFC companies have dragged the market down since their record highs reached at the end of August.
On August 29, Sensex and Nifty reached their peak of 38,989 and 11,760 respectively.
Since then, the Sensex index has fallen by 8.71% and that of Nifty by 8.93% so far, partly because of the fall in NBFC shares, the crisis of the IT & FS having resulted in a shortage of liquidity among these companies.
Discussions are also expected between the government and the RBI regarding restrictions on public sector banks and rapid corrective action (PCA). Nearly a dozen public sector banks are subject to rapid corrective action (PCA), which means that they can not lend money to the company. 39; industry. There is no doubt that the government needs to commit more capital to clean up these banks, but RBI can also lift some of the discretionary restrictions, such as those on credit and operations. The RBI can easily allow banks with improved performance to lend to good MSMEs.
The RBI has placed 11 public sector banks and one private lender in its list of quick fixes.
While PCA bank stocks such as IDBI Bank (0.16%), UCO Bank (3.63%), Indian Central Bank (0.80%), Indian Overseas Bank (0.67%), Dena Bank ( 2.22%), Indian Overseas Bank (0.67%), Bank of Maharashtra (3.95%) United Bank of India (1.51%), Allahabad Bank (0.92%) won, losers from the PCA list are the Bank of India (0.74%), the Oriental Bank of Commerce (1.36%), Dhanlaxmi Bank (1.84%).
YES Bank (6.17%), Tata Motors (2.68%) and Vedanta were the main losers of Sensex.
ONGC, Bharti Airtel and Adani Ports were the main losers of Sensex, with a decrease of 1% each.
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