Nifty above 17,000; private bank stocks decline

The key equity indices bounced back in early afternoon trade. The Nifty reclaimed the 17,000 mark after hitting the day`s low at 16,833.20. Private bank stocks declined for the second day in a row.

At 12:25 IST, the barometer index, the S&P BSE Sensex, was up 149.24 points or 0.26% to 57,273.55. The Nifty 50 index added 42.65 points or 0.25% to 17,046.40.

In the broader market, the S&P BSE Mid-Cap index rose 0.15% while the S&P BSE Small-Cap index gained 0.43%.

The market breadth was positive. On the BSE, 2060 shares rose and 1287 shares fell. A total of 157 shares were unchanged.

Economy:

India looks set to overtake France next year and then Britain in 2023 to regain its place as the world`s sixth biggest economy.

In a report, the British consultancy CEBR said the world`s economic output will exceed 100 trillion dollar for the first time next year and it will take China a little longer than previously thought to overtake the United States as the No.1 economy. CEBR predicted China will become the world`s top economy in dollar terms in 2030, two years later than forecast in last year`s World Economic League Table report.

CEBR deputy chairman Douglas McWilliams said, the important issue for the 2020s is how the world economies cope with inflation, which has now reached 6.8 per cent in the U.S.

The report showed Germany was on track to overtake Japan in terms of economic output in 2033. Russia could become a Top 10 economy by 2036 and Indonesia looks on track for ninth place in 2034.

Derivatives:

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, jumped 5.85% to 17.09. The Nifty 30 December 2021 futures were trading at 17,041.85, at a discount of 4.55 points as compared with the spot at 17,046.40.

The Nifty option chain for 30 December 2021 expiry showed maximum Call OI of 67.8 lakh contracts at the 18,000 strike price. Maximum Put OI of 78.6 lakh contracts was seen at 17,000 strike price.

Buzzing Index:

The Nifty Private Bank index shed 0.40% to 17,662.40. The index has lost 1.39% in two sessions.

Bandhan Bank (down 3.16%), IndusInd Bank (down 2.09%), IDFC First Bank (down 0.85%) and HDFC Bank (down 0.10%) declined.

However, Kotak Mahindra Bank (up 0.78%), ICICI Bank (up 0.60%), Federal Bank (up 0.56%), Axis Bank (up 0.41%) and Yes Bank (up 0.38%) managed to outperform.

RBL Bank slumped 16.22% to Rs 144.85 following a series of developments that took place over the weekend, starting with the banking regulator RBI appointing its chief general manager, Yogesh K Dayal as an additional director of RBL Bank`s board, as reported on 24 December 2021.

Following this, two major disclosures took place on 25 December 2021, with the lender`s MD & CEO since 2010 Vishwavir Ahuja, exiting his position and the bank`s current executive director Rajeev Ahuja appointed as the interim MD & CEO with immediate effect.

While the new CEO radiated confidence in the Bank`s financial health and capitalisation, investors have grown wary of the same. They remain cautious of the private lender`s financial strength and asset quality.

Separately, the media reported that billionaire investor Rakesh Jhunhunwala and D-Mart founder RK Damani have approached RBI with the request to buy 10% stake in RBL Bank. The move by Jhunjhunwala and Damani was made prior to the RBI action against the bank, reports added.

Separate media reports suggested that the bank employee unions` umbrella body AIBEA had written a letter to Finance Minister Nirmala Sitharaman expressing concern that everything was not right at RBL Bank and it was going the Yes Bank and Lakshmi Vilas Bank way.

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