New Delhi, Jan 24 (IANS): Indian markets gave up morning gains on Wednesday after private sector banks came under selling pressure.

BSE Sensex which was up more than 400 points in the morning is now flat at 70,369.59 points.

Axis Bank is down more than 3 per cent, ICICI Bank is down more than 2 per cent, Asian Paints is down more than 2 per cent, TCS is down more than 1 per cent.

Motilal Oswal Financial Services downgraded Axis Bank to Neutral with a revised TP of Rs 1,175. The brokerage said Axis Bank reported in-line PAT at Rs 60.7b (up 4% YoY/3.5% QoQ) in 3QFY24, driven by healthy other income, which was partly offset by an increase in provisions due to AIF-related provisioning.

NIMs moderated 10bp QoQ to 4.01%. The management has suggested that funding costs will continue to inch up over the next two quarters. Loan growth was healthy at 22% YoY/3.9% QoQ, while deposit growth was robust at 5% QoQ. The C/D ratio moderated 110bp QoQ to 92.8%.

“We cut our FY25E EPS by 8% considering an increase in costs and margin pressures. Moreover, with a high CD ratio being of 93%, we estimate AXSB to deliver a 15.7% CAGR in loans over FY24-26E, slower than peers,” the report said.

The important takeaway from yesterday's (Tuesday) sharp market correction is not the 1.54% cut in Nifty but the crash in Nifty Midcap and Nifty Smallcap indices by 3.15% and 2.87% respectively, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The valuations in the broader market had become excessive and unsustainable as pointed out many times recently, he said.

The trigger for the correction came mainly from the sustained selling by FIIs who have sold equity worth Rs 27830 crores during the last 5 days, he added.

Some news and rumours also contributed to the selling in the market. There is news that SEBI is tightening the ultimate beneficiary norms for FPIs starting February 1. This might have triggered some FPI selling. Also, there is a rumour floating around that the finance minister may tweak the LTCG tax taking away the advantages investors are enjoying now, he added.

Further selling by FPIs and more corrections in the broader market are likely. Investors may wait for the market to stabilise. Safety now is in fairly priced large caps, he said.

(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)