Equity parameters maintain upward momentum

Indian equity markets maintained their upward momentum in the afternoon session following gains in energy, IT and oil and gas stocks. Healthy buying was observed in blue-chip stocks like ITC, Axis Bank and ONGC. Sentiments perked up with ratings agency ICRA’s statement that non-bank lenders have witnessed a good rise in loan collection efficiencies in the September quarter after the reverses in the first three months of the fiscal. Adding optimism, Corporate India is showing ‘healthy signs of recovery’ and plans to hire more people in the first three months of 2021 compared to the quarter ending December. According to report, the employment trends in the first quarter of 2021 are expected to be on the rise with a Net Employment Outlook of 5 percent. Meanwhile, Supreme Court (SC) will today continue hearing a batch of petitions seeking interest waiver during the loan moratorium period. On December 8, Solicitor General Tushar Mehta told the top court that a complete waiver of interest during the six-month loan moratorium period has a cost associated with it.

On the global front, Asian markets were trading mostly in green followed by the ongoing efforts to launch near term aid plan for the struggling US economy and as health care stocks got bolstered with the positive COVID-19 vaccine news. Back on street, the overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1695:1083; while 165 shares remained unchanged.

The BSE Sensex is currently trading at 45919.21, up by 310.70 points or 0.68% after trading in a range of 45792.01 and 45989.98. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.55%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Energy up by 1.27%, IT up by 1.02%, Oil & Gas up by 0.97%, PSU up by 0.95% and Realty was up by 0.93%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ITC up by 2.00%, Axis Bank up by 1.54%, ONGC up by 1.43%, Asian Paints up by 1.40% and Infosys was up by 1.40%. On the flip side, Tata Steel down by 0.78%, Maruti Suzuki down by 0.64%, SBI down by 0.55%, ICICI Bank down by 0.39% and Titan Company was down by 0.33% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that non-banking finance companies (NBFCs) have witnessed a good rise in loan collection efficiencies in Q2 (July- September) of FY21 after the reverses in the first three months of the fiscal. It noted that the build-up in provisions will help NBFCs against incremental uncertainties. It added that such bodies are carrying about 50 percent higher provisions at 3.1 percent of the assets under management (AUM) as against 2 percent in the year-ago period.

According to the report, most companies have reported collection efficiencies between 85-95 percent levels in September, as against 70 percent in August and 65 percent in July for non-bank finance companies. For housing finance companies (HFCs), it said the same was 81 percent in August and 78 percent in July. It pointed out that the improvement is partly due to the closure of loan moratorium to borrowers because of the COVID-19 disruptions and given the fact that collections are typically higher in the last month of the quarter than during other months. It added that the six-month moratorium benefitted the borrowers, helped further by the improved cashflows due to easing of lockdown restrictions and resumption of economic activities in Q2FY21.

The report further stated that the non-performing assets/GS3 (gross stage3) assets, as of September 2020, not adjusted for the Supreme Court order on NPA classification, registered a decline after three quarters, as the prolonged moratorium restricted forward flow into the harder buckets of loans overdue for over 90 days. The reduction was largely in the retail-NBFC segments aided by recoveries/resolutions, while HFC overdues remained stable due to the asset stickiness and continued stress in the loan against property (LAP) and corporate/construction finance exposures.

The CNX Nifty is currently trading at 13479.85, up by 86.90 points or 0.65% after trading in a range of 13449.60 and 13501.15. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.04%, Indian Oil Corporation up by 2.09%, ITC up by 1.83%, Coal India up by 1.64% and Axis Bank was up by 1.50%. On the flip side, Hindalco down by 1.77%, Tata Steel down by 0.64%, Maruti Suzuki down by 0.64%, Shree Cement down by 0.59% and Grasim Industries was down by 0.59% were the top losers.

Asian markets were trading mostly higher; KOSPI rose 54.54 points or 2.02% to 2,755.47, Hang Seng increased 217.10 points or 0.83% to 26,521.66, Straits Times advanced 19.58 points or 0.69% to 2,845.21, Nikkei 225 surged 350.86 points or 1.33% to 26,817.94 and Taiwan Weighted was up by 29.74 points or 0.21% to 14,390.14. On the other side; Shanghai Composite was down by 15.95 points or 0.47% to 3,394.23.