Equity Alert
RBI measures to aid corporate credit growth, says Emkay Global
This story was originally published at 08:50 IST on 3 October 2025
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Equity Alert: RBI measures to aid corporate credit growth, says Emkay Global
MUMBAI--0825 IST--The Reserve Bank of India's measures to widen banks' scope for lending may help arrest the "slow decline in wholesale growth", Emkay Global Financial Services said in a strategy report. However, the brokerage does not feel these measure would lead to a sharp rise in corporate lending.
The brokerage expects wholesale or corporate loan growth to improve slightly to 10% in 2026-27 (Apr-Mar) from 8-9% expected growth in FY26, it said in a separate report on the banking sector. At the same time, it expects a strong recovery in retail lending, which may push the overall credit growth to 13.3% in FY27 from 11% expected in FY26.
The RBI Wednesday allowed banks to finance acquisitions, eased limits for lending by banks against shares and for initial public offer financing, and reduced the risk weights for lending to non-banking financial companies for high quality infrastructure projects. It also removed large exposure framework for banks which was introduced in 2016.
"These measures should aid a recovery in corporate lending by banks, and address some of the disintermediation challenges," Emkay Global said in its note. "Banks will need to change their mindset though, on account of risk appetite in corporate lending."
Emkay Global said public sector banks would be quicker at benefiting from these changes, while private banks make some time to adjust. The Nifty Bank had risen over 1% Wednesday after RBI announced these measures.
On retail lending, Emkay Global said such loans are likely to rise as demand improves after the cut in goods and services tax rates on several products. However, the brokerage advised to play this theme through consumer discretionary such as automobile companies.
"The credit revival is a big incremental positive for lenders, though it may not translate into stock performance. First, banks will see margin pressures due to fundamental asset-liability mismatches. Second, the growth recovery will be limited by the banks' own risk-aversion and will not resolve the fundamental growth-valuation mismatch," the brokerage said. (Anshul Choudhary)
Equity Alert: Indices may open tad up on hopes of better credit growth
MUMBAI--0758 IST--Benchmark indices are likely to open higher on hopes of better credit growth going forward after the Reserve Bank of India expanded banks' scope for lending Wednesday. Equity markets will open for trading Friday after being shut Thursday on account of Mahatma Gandhi Jayanti and Dussehra.
GIFT Nifty contracts suggest the Nifty 50 is likely to gain further amid slightly positive global cues. However, it is still expected to face resistance around 25000 points as market participants await for more clear demand trends during the festival season.
At 0725 IST, GIFT Nifty October contracts were at 24949.50 points, marginally higher than its previous close and up 0.5% from the Nifty 50's close on Wednesday. Before the Gandhi Jayanti holiday, the Nifty 50 had closed at 24836.30 points.
The index had gained nearly 1% Wednesday after the Reserve Bank of India announced a slew of measures related to banks. The RBI allowed banks to finance acquisitions, eased limits on lending by banks against shares and for initial public offer financing, and reduced the risk weights for lending to non-banking financial companies for high-quality infrastructure projects.
"These measures should aid a recovery in corporate lending by banks, and address some of the disintermediation challenges," Emkay Global Financial Services said in a note. This is likely to arrest the "slow decline in wholesale growth, it said. Emkay Global said public sector banks would be quicker at benefiting from these changes, while private banks take some time to adjust. The Nifty Bank index had gained 1% on Wednesday.
Among global cues, US markets continue to gain after Wednesday's private payrolls report fuelled rate cut hopes. The ADP National Employment Report showed private payrolls decreased by 32,000 in September, the biggest drop since March 2023, Reuters reported. This was a surprise as economists had forecast private employment increasing by 50,000 jobs.
Most Asian indices were higher in early tradae Friday, with markets in Japan, Taiwan, and Australia up 0.5-1.5%. Hong Kong's Hang Seng was down 0.6%. Indices in China and South Korea were shut. (Anshul Choudhary)
Equity Alert: Indices in the US post record highs as technology stocks gain
MUMBAI--0730 IST--Benchmark indices in the US closed at their highest levels Thursday, buoyed by gains in technology stocks after traders shrugged off concerns around the ongoing US government shutdown. Traders focussed on weaker-than-expected private sector jobs data from payroll company ADP and other private sources after key economic data from the US labour department was delayed, owing to the first government shutdown in seven years. Lacklustre jobs data from private sources shored up bets for an interest rate cut by the US Federal Reserve in its October meeting.
The technology-heavy Nasdaq Composite index rose 0.4%, the S&P 500 was marginally up and the Dow Jones Industrial Average advanced 0.2%. The three indices were up for the fifth consecutive session. Shares of technology companies such as Nvidia, Broadcom, Apple, and Advanced Micro Devices rose 0.6-3.5%. Shares of chip giant Nvidia posted a record high Thursday.
US private-sector businesses lost 32,000 jobs in September, CNN Business said in a report, citing data from ADP report Wednesday. The previously estimated 54,000 payroll gains for August were downwardly revised to a decline of 3,000, CNN Business reported. US Treasury Secretary Scott Bessent said Thursday that US economic growth could be hurt by the government shutdown. Traders are factoring in a 97% probability of an interest rate cut of 25-basis points by the US Fed this month, up from 85.5% a week ago, according to the CME Fedwatch tool.
Among others, shares of Tesla fell over 5% after the electric vehicle maker gave up gains from earlier in the session after a strong quarterly deliveries report. Analysts flagged risks to sales in upcoming quarters due to the withdrawal of the $7,500 federal tax credit, a report by Reuters said. Shares of credit bureaus Equifax and TransUnion fell 8.5% and 10.6%, respectively, after Fair Isaac Corp. launched a program that could allow mortgage lenders to gain access to credit scores without relying on the bureaus, according to a Reuters report. Fair Isaac's shares jumped nearly 18%. Shares of Occidental Petroleum fell more than 7?ter the company said it would sell its petrochemical division to Berkshire Hathaway for $9.7 billion.
Following are the closing levels of US indices Thursday:
|
Index |
Level |
Change in % |
|
S&P 500 |
6715.35 |
0.06 |
|
NASDAQ Composite |
22844.05 |
0.39 |
|
Dow Jones Industrial Average |
46519.72 |
0.17 |
(Eshitva Prakash)
End
US$1 = INR 88.69
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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