Indian equities subdued; banking, IT stocks top drag

Indian equities gave up early gains to settle lower on Thursday due to sell-offs mainly in banking stocks after the Reserve Bank directed banks to link interest rates on all new loans with external benchmarks.Losses on the indices, however, were restricted by emergence of buying in stocks of somewhat relieved auto sector after Union Transport Minister Nitin Gadkari assured the crisis-hit industry of all possible support.After rising over 174 points in early session, the 30-share Sensex failed to sustain the momentum and gave up all gains to end 80.32 points, or 0.22 per cent, lower at 36,644.42. It hit an intra-day high of 36,898.99 and low of 36,541.88.The broader Nifty, on the other hand, ended 3.25 points, or 0.03 per cent, higher at 10,847.90.Banking and IT stocks were mainly responsible for bringing the benchmark indices — Sensex and Nifty — under pressure. A significant rise in the rupee value was the reason behind the selling in shares of export-oriented IT companies.Top laggards in the Sensex pack included HDFC, ICICI Bank, TCS, HCL Tech, Kotak Bank, Asian Paints, TechM and HUL, dropping up to 2.67 per cent.On the other hand, Tata Motors, ONGC, Yes Bank, NTPC, Maruti, M&M, Vedanta, Tata Steel and Bajaj Auto rallied up to 7.81 per cent.Sectorally, BSE oil and gas, metal, auto, utilities, power, industrials, healthcare and energy indices rose up to 2.47 per cent.While BSE realty, finance and banking indices fell up to 1.77 per cent.Broader BSE midcap and smallcap indices outperformed benchmarks, rising up to 0.72 per cent.”The Reserve Bank has made it mandatory for banks to link their new floating rate for home, auto and MSME loans to an external benchmark from October 1 so that the borrowers can enjoy lower rate of interest. However, that triggered a sell-off in bank stocks, especially in private banks, which closed in the negative,” Shrikant S Chouhan, Senior Vice President (Equity Technical Research), said.Boosting market sentiments, Gadkari assured the crisis-hit auto sector of all possible support, including taking up the demand of GST reduction with Finance Minister Nirmala Sitharaman