Local gauges trim gains in morning deals

Indian equity benchmarks trimmed some gains but continued to trade in green in morning deals, on the back of strong global cues. Sentiments remained positive with Prime Minister Narendra Modi stating that economic indicators have shown encouraging signs of recovery of the Indian economy post-pandemic. In this time of pandemic, he said, the government has accorded highest priority to saving lives of Indians and the way India has handled the crisis through concerted effort has surprised the world. Some support also came with Economic Affairs Secretary Tarun Bajaj’s statement that the government is cautiously optimistic on the economic front and will continue to take measures to push growth. However, gains remain capped as some concern came with Former chief statistician Pronab Sen’s statement that at the moment India's current macroeconomic situation is very uncertain and the country's Gross domestic product (GDP) could contract closer to 10 percent in the current fiscal (FY21). He also said that although the overall macro management of the economy by the government has not been very good but this particular slowdown is really beyond its control.

On the global front, Asian markets were trading mixed as investor sentiment received a boost after the U.S. Food and Drug Administration authorized a COVID-19 vaccine developed by Pfizer and BioNTech for emergency use. Investors also cheered news that Britain and the European Union have agreed to continue Brexit trade talks beyond Sunday's deadline. In addition, the Bank of Japan's Tankan survey showed that business sentiment improved for the second straight quarter in the fourth quarter of 2020.

The BSE Sensex is currently trading at 46205.48, up by 106.47 points or 0.23% after trading in a range of 46163.17 and 46373.34. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.50%, while Small cap index up by 0.52%.

The top gaining sectoral indices on the BSE were PSU up by 1.75%, Metal up by 1.63%, Oil & Gas up by 1.48%, Utilities up by 0.88% and Basic Materials up by 0.81%, while Auto down by 0.60% and Realty down by 0.35% were the few losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.13%, Tata Steel up by 2.11%, NTPC up by 1.81%, Larsen & Toubro up by 1.58% and ICICI Bank up by 1.45%. On the flip side, Bajaj Auto down by 0.97%, Mahindra & Mahindra down by 0.96%, Tech Mahindra down by 0.85%, Reliance Industries down by 0.68% and Hindustan Unilever down by 0.33% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the asset under management (AUM) of non-banking finance companies, including housing finance companies, is likely to see a positive growth but will be muted at 5-6 percent in the next financial year. It said the turnaround will be led by larger entities with stronger parentage. In the current fiscal, NBFCs' AUM is likely to de-grow for the first time in the last two decades.

It mentioned navigating a raft of headwinds for over two fiscals culminating in de-growth in the current fiscal assets under management (AUM) of non-banking financial companies (NBFCs) is set to grow again although at a relatively subdued 5-6 percent next fiscal. According to the agency's president Gurpreet Chhatwal, despite an estimated GDP growth of 10 percent next fiscal, overall NBFC sector growth is likely to be slower because access to funding remains a challenge due to concerns about the impact of the pandemic on asset quality.

Additionally, he said competition is expected to be more intense from banks which are flush with low-cost deposits and better placed with improved capital buffer than in the previous years. Besides, the rating agency said the challenges faced by NBFCs in gaining funding access at optimal costs will mean they cede overall market share to banks in the near term, especially in their two biggest segments home loans and new vehicle finance.

The CNX Nifty is currently trading at 13551.30, up by 37.45 points or 0.28% after trading in a range of 13531.45 and 13597.50. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.93%, Coal India up by 3.54%, Cipla up by 3.01%, Tata Steel up by 2.23% and Indian Oil Corp. up by 2.18%. On the flip side, Eicher Motors down by 1.54%, Hero MotoCorp down by 1.32%, Tech Mahindra down by 1.00%, Wipro down by 0.99% and Bajaj Auto down by 0.95% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 80.64 points or 0.3% to 26,733.16, Jakarta Composite soared 62.37 points or 1.05% to 6,000.70, Straits Times advanced 41.48 points or 1.47% to 2,863.18 and Shanghai Composite gained 13.29 points or 0.4% to 3,360.48.

On the flip side, KOSPI fell 9.34 points or 0.34% to 2,760.72, Taiwan Weighted dropped 14.57 points or 0.1% to 14,247.12 and Hang Seng decreased 159.81 points or 0.6% to 26,346.06.