Markets trade flat; Healthcare, Power major losers

Indian equity benchmarks traded flat in early afternoon session, as investors remained wary ahead of third quarterly earnings and upcoming Union Budget. The sentiments were in lackadaisical mood, as the rating agency Crisil attributed the continuing slowdown to the impacts of the demonetisation, GST implementation and weakness in agriculture, though it has maintained its FY19 growth estimate at 7.6 per cent on the low base. Weak Asian markets along with higher selling in Healthcare, Power and Utilities stocks, also kept the sentiments under pressure. However, the markets were taking some support with the report that the Commerce and Industry Ministry is mulling incentives for States that play a proactive role in promoting exports as it will help boost economic growth. In scrip specific development, Prestige Estates Projects was up by over half a percent on completing construction of ‘Forum Centre City Mall’ in Mysore and inaugurated the same on January 8, 2018 with 96% leasing and occupancy.

On the global front, Asian markets were trading mostly in red, as investors in the region digested earnings guidance from tech heavyweight Samsung Electronics and kept an eye on ongoing inter-Korea talks. Back home, the BSE Sensex is currently trading at 34403.90, up by 51.11 points or 0.15% after trading in a range of 34343.41 and 34487.52. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.37%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Realty up by 1.43%, Energy up by 0.98%, FMCG up by 0.34%, Consumer Durables up by 0.14% and Oil & Gas up by 0.12%, while Healthcare down by 0.47%, Power down by 0.45%, Utilities down by 0.42%, Capital Goods down by 0.41% and Telecom down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 5.70%, ITC up by 1.47%, Reliance Industries up by 1.05%, Tata Motors - DVR up by 0.94% and Tata Motors up by 0.91%. On the flip side, Adani Ports & SEZ down by 0.85%, Bajaj Auto down by 0.84%, ICICI Bank down by 0.76%, Hero MotoCorp down by 0.72% and Maruti Suzuki down by 0.68% were the top losers.

Meanwhile, even as the government is giving a strong push to the affordable housing segment, the global credit rating agency, Moody’s Investors Service and its Indian arm ICRA in a joint report have flagged anxiety about the growing delinquencies in this segment, which are expected to continue in the calendar year 2018. It pointed out that factors like intensifying competition-- resulting in some easing in lending standards and a higher share of lending to the self-employed segment are the key reasons for the build-up of stress in the segment.

The report has indicated that while asset quality remains robust in the traditional housing segment, the non-performing assets in the affordable housing segment have inched up in recent times to around 1.8% on an average as of September 2017. It noted that the average cum 90+ days past due level for affordable housing was nearly seven times the level observed for traditional housing loan pools. Besides, it highlighted that the government is targeting to ensure that there is a house for all by 2022 and has provided a lot of incentives for the affordable housing segment, including making it as a priority sector lending for banks and huge interest subvention and direct cash subsidy. However, it said that housing loans continue to be seen as the best performing retail loan asset class in the country, demonstrating low and stable delinquencies over the years, in 2018.

The rating agency further said that this is possible because of the underlying collateral, which is self-occupied residential property, absence of steep correction in property prices and moderate loan to value ratios. It noted that introduction of the goods and services tax (GST) in July 2017 and demonetization have placed stress on the small- and medium-sized enterprises (SMEs) sector. It added that the impact of demonetisation and new tax regime implementation will lead to higher delinquencies in asset-backed securities (ABS) for loans against property (LAP) to SMEs. However, it said auto ABS-backed by commercial vehicles loans will remain stable on the back of healthy domestic economic growth.

The CNX Nifty is currently trading at 10619.00, down by 4.60 points or 0.04% after trading in a range of 10607.90 and 10659.15. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Coal India up by 5.97%, ITC up by 1.22%, Reliance Industries up by 1.13%, Tata Motors up by 0.95% and Yes Bank up by 0.93%. On the flip side, Eicher Motors down by 2.12%, Hindalco down by 1.65%, Zee Entertainment down by 1.58%, HPCL down by 1.40% and HCL Tech. down by 1.15% were the top losers.

The Asian markets were trading mostly in red; Jakarta Composite decreased 17.24 points or 0.27% to 6,368.16, FTSE Bursa Malaysia KLCI was down by 3.72 points or 0.2% to 1,828.43, KOSPI Index shed 3.05 points or 0.12% to 2,510.23 and Taiwan Weighted dipped 0.86 points or 0.01% to 10,914.89. On the flip side, Shanghai Composite increased 4.84 points or 0.14% to 3,414.32, Hang Seng rose 69.93 points or 0.23% to 30,969.46 and Nikkei 225 added 135.46 points or 0.57% to 23,849.99.